RAP Flashcards
RAP generally
The rule against perpetuities provides that certain kinds of future interests are void. If there is any possibility, however, remote, about the interest might vest more than 21 years after a person alive at the time of the Grant has died.
The rule against perpetuities applies only to contingent remainders, executory interests, vested remainder subject to open, options to purchase, and rights of first refusal. 
When the perpetuities period begins to run
The time the interest is created and the perpetuities. Begins to run depends on the instrument that the interest created.
For interest granted by well, it runs from the date of the testators death
For interest created by deed, it is the date of delivery
The period runs on an irrevocable trust from the day it is created, and runs on a revocable trust from the date it becomes irrevocable
“must vest”
An interest vests for purposes of the rule when it becomes: 1) possessory or 2) an indefeasibility vested remainder, or a vested remainder subject to total divestment.
If there is any possibility that it could vest beyond the period, it is void
“Lives in being”
Unless other measuring lives are specified, one connected with the vesting of the interest is used. You were looking for a person alive at the end of the convenience, whose life and or death is relevant to the prescribed conditions occurrence.
Interests exempt from the rule
Except for the remainder subject to open, the rule does not apply to vested interest. Thus, vested remainders, reversions, possibilities of reverter, and rights of entry are not subject to the rule. Moreover, there is a charity to charity exception and the exception for options to purchase held by a current tenant.
Consequences of violating the rule
Violation of the rule destroys only the offending interest
4 steps to assessing RAP problem
Step one: determine the interests
Step two: how does the future interest holder take meaning what needs to happen for the future interest holder to take?
Step three: find the measuring life
Step four: determine whether we will know for sure within 21 years of the death of a measuring life if the future interest holders can take
Executory interest with no time limit
Brightline rule, executory interest with no time limit violates the rule.
Age contingency beyond age 21 in open class
A gift to an open class conditioned on member surviving beyond age 21 will violate the rule
Some states have an acted perpetuities reform legislation that reduces such age contingencies to 21
Age contingency beyond age 21 in open class - bad as to one, bad as to all
If the interest of any class member may vest to remotely, the whole class gift fails. For the class gift to vest, the class must be closed, and all conditions precedent must be satisfied for every member. 
Fertile octogenarian
A woman is conclusively presumed to be capable of bearing children, regardless of her age or medical condition.
A few states have an acted for perpetuities reformed statutes that raise the presumption that women over a certain age cannot be children, for example, 55. Also, medical technology regarding a woman’s childbearing capacity is admissible in these states.
Unborn widow or widower
Because a person’s widow is not determined until their death, it may turn out to be someone who is not in being at the time of the disposition. Where necessary to sustain a gift, a few state statute raise a presumption that any reference to a person, spouse, widow, or widower is to be a person in being at the time of the transfer.
Administrative contingency
A gift conditioned on an administrative contingency, like admission of will to probate, violates the rule
A few state reform statutes, eliminate this problem by raising a presumption of the transferor intended that the contingencies should occur if at all within 21 years
Options and rights of first refusal
An option is a contract, supported by consideration, that creates in the optionee a right to purchase. The property on terms provided in the option. Under a right of first refusal, if a seller receives a third-party’s offered to purchase the property, the right of first refusal, gives us holder the right to purchase the property, usually on the same terms as that offer. 
Options and rights of first refusal - extension to heirs and assigns
For exam purposes, options or rights of first refusal that are not personal to the holder, meaning which are extended to the holders heirs and assigns, will violate the rule because they might be exercised later than the end of the perpetuities period.
However, the rule against perpetuities does not apply to options to purchase held by the current lessee!!
Options and rights of first refusal - modern trend
Under modern authorities, the rule against restraints on alienation is applied to options and rights of first refusal rather than the rule against perpetuities. An option or right of first refusal will thus be valid if it does not impose, an unreasonable restraint on alienation. A significant minority of courts will also construe an option or write a first refusal as lasting only for a reasonable time to avoid invalidating the interest.
Application of the rule to class gifts - gift to subclass exception
Each gift to a subclass may be treated as a separate gift under the rule
Application of the rule to class gifts - per capita gift exception
A gift of a fixed amount to each member of the class he is not treated as a class gift under the rule
Trusts - generally
I trust is a fiduciary relationship with respect to specific property where the trustee holds legal title to the property, subject to enforceable equitable rights in a beneficiary. The creator of a trust is the settlor, who must own the property at the time of trust creation and must’ve had the intent to create the trust. 
Trusts - application of RAP
The rule against perpetuity applies to the equitable future interest of the beneficiaries in a private trust, just as it does to legal future interest.
Trusts - creation of trusts
A trust can be created by Will, inter vivos transfer of the trust res, or inter vivos declaration that the settlor is holding property interest. All trust of real property must be in writing. Note that a settlor may be property to trust created during their lifetime as a pour over provision.
Trusts - charitable trusts
A charitable trust must have a charitable purpose. The rules, governing charitable, trust, differ from those applicable to private trust in three important ways: 1) a charitable trust must have indefinite beneficiaries, 2) it may be perpetual, meaning the ruled against perpetuities does not apply, 3) the doctrine of cy pres, which allows a court to select an alternative charity, when the purposes of the settler became impractical or impossible, applies. Charitable trust may be enforced by an action of the Attorney General of the state. 
Reform of RAP - wait and see or second look doctrine
Under this majority reform effort, the validity of any suspect future interest is determined on the basis of the facts as they exist at the conclusion of the measuring life. Meaning the court will wait for the measuring life to end and then look at the facts as they actually occurred.
Reform of RAP - USRAP
This codifies, the common law rule against perpetuities, and in addition provides for an alternative 90 year vesting period
Reform of RAP - cy pres doctrine
Some reform measures allow a court to reform invalid interests. If a given disposition violates the rule, a court may reform it in a way that most closely matches the grantors interest, still complying with the rule against perpetuities. 
