Pg 44 Flashcards

1
Q

If T bequeaths $10,000 to A when she marries, and $5000 to A’s first kid. If A is unmarried without kids, how does this work? And is there an RAP violation?

A
  • The gift to A will vest during her life, if at all, so it is valid.
    – The gift to her kid will also vest during her life, if at all, so it is valid

No RAP issue here

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2
Q

If a teacher declares a trust of her first edition Dickens book for the first student in her constitutional law class that is sworn in as a judge. How does this work, and is there an RAP issue here?

A

The gift will vest or fail within the lives of the students in the class, and before the last student dies, so there is no RAP issue here.

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3
Q

If O transfers funds in trust to pay income to A for life, then principle to A’s kids that reach 21, how does this work, and is there an RAP issue here?

A

This is valid because it vests at the latest 21 years after A dies [since all of his kids have to be 21 within that 21 years]. No RAP issue here

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4
Q

If O transfers funds in trust to pay income to A (for life) at O‘s death, then on A’s death, it goes to A’s kids. At the death of the last of A’s kids, the property goes to A’s grandkids. How does this work and is there an RAP issue here ?

A

This involves successive rounds of takers:
– step one: operative point in time: O’s death
– step two: life in being: A is the only one we know that is alive at O’s death. We don’t know if he already has kids at O’s death or not, but the last of his kids will definitely be born by his death
– step three: it is possible that the grandkids’ possession won’t vest until more than 21 years after A (life in being).

Void because of RAP. Here we don’t know if anyone will be a grandkid at O’s death, so their interest cannot vest then. The grandkids might not be born until more than 21 years after A‘s death

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5
Q

If O transfers funds in trust to pay income to A at O‘s death, then on A’s death, it goes to A’s kids. At the death of the last of A’s kids, the property goes to A’s grandkids. If A is alive at O’s death and she’s 80 years old with two grown kids that are already in their 50s who have kids of their own, how does this work and is RAP violated?

A
  • step one: operative point in time: O’s death
    – step two: life in being: this involves a fertile octogenarian situation. It is unlikely that A will have more kids at 80, but it is possible that it could happen after O’s death. And since that child wasn’t a life in being at his death, A’s kids cannot count as lives in being since they could be born after O dies. So it is possible for an interest to vest more than 21 years after a life in being. That means that RAP has been violated
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6
Q

If T creates a testamentary trust that says, “when the youngest kid of my son reaches 30, the trust assets will be distributed to my son’s then living descendants.“ At T’s death, his son has two kids [ages 24 and 32]. How does this work and does it violate RAP?

A

It does violate RAP because the son could have a kid after T’s death, so the son’s living descendants interest could vest more than 21 years after all lives in being alive at T’s death, since the descendants’ interest doesn’t vest until the youngest son reaches 30. It is super unlikely, but possible for T’s son to have another kid right after T’s death and the son could die, so that more than 21 years have elapsed between the time all lives in being at T’s death ends and the time the youngest kid reaches 30.

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7
Q

If O gives land to A for life, then to A’s kids for life, then to A’s grandkids, how does this work and does it violate RAP?

A
  • O has a reversion
    – A has a life estate (this is not affected by RAP because it is vested)
    – A’s kids have a life estate (this must vest or fail on the death of A, who is a life in being, so it is OK)
    – A’s grandkids have a remainder that is vested subject to open (this interest is void because not every member of the class will be ascertained until the death of A’s kids, and some of them might not be alive at A’s death)
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8
Q

If O transfers property to an irrevocable trust for her daughter for life, then principal to her grandkids. If at the time of the transfer O has one grandchild, how does this work and is there an RAP issue?

A
  • O has no interest
    – A has a life estate (vested)
  • grandkids have a vested remainder subject to open upon the birth of more grandkids (the rule of convenience would save this interest to that specific grandchild, but all of the other grandkids’ interest would be void)
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9
Q

What is a savings clause?

A

Smart attorneys always include a savings clause in any instrument just to be safe and to avoid violation of RAP and malpractice. This is a clause that says something like “notwithstanding any other provision of this instrument, any trust that is created hereunder shall terminate, if it has not previously terminated, 21 years after the death of the survivor of the beneficiaries of the trust living on the date this instrument becomes effective.“

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10
Q

What are involved in the modern reforms for RAP?

A
These are meant to mitigate the complexity of RAP, which has been a major malpractice trap for attorneys. Today every state has reformed RAP in some way and they all now have different approaches such as:
– wait and see approach
- uniform RAP approach
– abolish RAP for trusts
– savings clauses
– Cy Pres or reformation
– statutory fixes
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11
Q

What is involved in the modern reformation for RA that is the “wait and see approach“?

A

A majority of states follow this. It only considers what actually happened in a given case. If an 80-year-old did not have more kids, then the grandkids should get the property. At the end of the common-law RAP period, any interest that is not vested then is void. The waiting period is the lives that are relevant to vesting of all of the interests +21 years.

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12
Q

What is involved in the modern reform for RAP that is called the “Uniform RAP“?

A

This is adopted in a number of states and is basically a modified “wait and see approach“ that is applied after 90 years. After 90 years have run, you look at what happened, and if there are interests that still might vest after 90 years, they are invalid

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