E. Rule Against Perpetuities

Question 1

What type of property does RAP apply to?*

Answer 1

Real property (Land)

Personal property

• Tangible
• Intangible

NOT charities

Question 2

What is the RAP rule?*

Answer 2

Present/Future interest can NOT extend power of alienation beyond;
- Living beneficiaries at time of Estate creation plus 21 years (VOID)

Example

• X to give income to X’s children for life
• X to give remainder to X’s grandchildren
• X’s grandchildren may be born after X’s death + 21 years => X’s grandchildren are NOT ascertainable before 21-year limit => Remainder is NOT valid

Question 3

What is Reduction of Age Contingency rule?*

Answer 3

If future interest is NOT valid because it only allows beneficiaries to attain future interest after certain ‘age contingency’ (more than 21 years after Grantor’s death) => Age contingency may be reduced to 21 years (for Beneficiaries whose interest would otherwise NOT be valid)