Future Interests Flashcards
What is the RAP?
The Rule Against Perpetuities (RAP) invalidates any interest in property if there is any chance that the interest may vest more than 21 years after some life in being at the creation of the interest. The Rule applies to the following future interests in personal or real property:
(i) Contingent remainders - To A for life, then to the heirs of B.
(ii) Executory interests - To A, but if A marries, to B; To A for life, then to B if B delivers a eulogy at A’s funeral.
(iii) Class gifts (EVEN if vested remainders) - To A for life, then to A’s children.
(iv) Options and rights of first refusal - To A for life, then B has the right to purchase.
(v) Powers of appointment - To A to be distributed as he sees fit.
D is correct. The niece has a defeasible fee simple because of the limitation placed on the estate by the words “until my niece’s daughter marries.” If the niece’s daughter marries, the estate in the niece will end automatically and will pass to the holder of the future interest (the niece’s daughter). The future interest given to the daughter, a grantee, is an executory interest. The executory interest, in this case, does not violate the common law RAP because it will be known within the lifetime of the validating lives - the niece and the niece’s daughter - whether the condition of marriage has occurred.
A is incorrect. The gift to the niece was to the niece “and her heirs and assigns,” thereby creating a fee estate rather than a life estate. The fee simple estate was made defeasible by the addition of the words of limitation “until my niece’s daughter marries.” A remainder interest may follow a life estate; however, a remainder does not follow a fee simple estate. A future interest created in a grantee following a defeasible estate is an executory interest.
B is incorrect. The niece was given a defeasible fee simple. A limitation may be expressly attached to a fee simple estate. The express limitation attached to the grant was “until my niece’s daughter marries.” A future interest held by a grantee following a defeasible estate is an executory interest. The executory interest in this case does not violate the RAP.
C is incorrect. The niece was granted a defeasible fee simple. The express limitation was the marriage of the niece’s daughter. If the limitation occurs, the estate transfers automatically to the niece’s daughter. The future interest held by a grantee following a defeasible estate is an executory interest. Executory interests are subject to the RAP; however, the niece and the niece’s daughter are both validating lives and the condition of the marriage either will or will not occur during their lifetimes. The additional 21 years after the death of all validating lives is not needed, and the rule is not violated.
