Perpetuity means something that continues indefinitely. In finance, this can refer to an annuity–rather, a cash flow–that continues on forever. As stated by Finance Formulas, a perpetuity is an annuity that is paid out in periodic payments for an infinite amount of time. The value of a perpetuity can be calculated here.
In property law, perpetuity becomes important in the Rule Against Perpetuities. This is a common law rule that states that no future property interest is valid unless it vests no later than twenty-one years after the death of a person alive at the time the property interest was created. The person is called the “life in being”.
[Last updated in July of 2020 by the Wex Definitions Team]