Limitations on the Dead Hand Flashcards
RAP
An interest is void if it might vest too late
RAP is a matter of proof - if the interest is void
you can find an invalidating scenario
RAP is a matter of proof - if the interest is valid
you can find a validating life
“an interest”
Each interest in an instrument is looked at separately
“is void”
ab initio - from the start, at the moment of creation, strike the language not the entire instrument
Class gift? Bad as to all
“might”
What might happen as of when the RAP period starts to run
“vest”
RMs: BOTH
1) conditions precedent are satisfied and
2) a taker is identified
EI: vest in possession
“too late”
More than 21 years plus periods of actual gestation after deaths of all alive persons when the thing was created
Period of actual gestation in various instruments
Will: death of T
Ordinary Gift: delivery
Inter vivos transfers in trust: when irrevocable
Power of appointment: when power is exercised
Case of unborn widow
Do not assume that a person’s widow is the current wife or has even been born yet
Case of slothful executor
Do not assume that the administrative tasks will be done in a reasonable amount of time
Split contingencies doctrine
Applies when two ways of vesting are set out separately
Lucas v. Hamm
States that the malpractice might not apply to RAP because it is tough to understand
Rule against the accumulation of income
Trusts cannot accumulate income for too long, often defined by the period of RAP (some states)
RAP reform: narrow statute
Get ride of fertile octogentarian + unborn widow
RAP reform: common law
Judge can carve out exceptions (allow extrinsic evidence for proof of things)
Cy pres RAP instruments
Get rid of the bad, achieve the donors intent
Only way: insert a savings clause
Wait-And-See
an interest is void if it does vest too ate - wait for measuring lives to end and then 21 years + 10 months - after that: void
USRAP
1/2 states
Wait-and-see
An interest is OK if: (1) vests in 90 years or (2) is good under common law rule
Cy pres void interest
Prospective only
USRAP tax trap
Trust can lose grandfathering from GST if donee of special power exercises in the wrong way
Avoiding GST
1) turn trust into 90-year trust
2) make sure not to violate common law RAP when exercising the power
Abolition of RAP
Trusts/personalty only
Banks race to the bottom
Benefits of RAP
Facilitates efficient transfer
Reduces dead hand
Reduces uncertainty from contingent changes
Adds enjoyment from ownership of future interests
Avoids the first-generation monopoly
Reduces problem of accumulations
Reduces the problem of multiplication beneficiaries
Cost of RAP
Want things done as to their expectation
