RAP Flashcards
RULE AGAINST PERPETUITIES
No INTEREST is good unless it must VEST, IF AT ALL, not later than 21 years after some LIFE IN BEING at the time the INTEREST WAS CREATED.
Rule operative when?
At the time the interest is created
Works as a rule of
logical proof
If there is any possibility that interest might not vest in the perpetuities period then it is
VOID and will be crossed out from the conveyance.
Even remote possibilities matter so consider…
fertile octogenarian, unborn widow, etc.
INTERESTS Subject to RAP (3)
- Contingent Remainder
- Executory Interests
- Class Gifts (including vested remainders subject to open and accompanying executory interests)
What It Means to VEST for RAP?
all takers identified and no contingency to ultimate
possession other than the termination of prior estates
RAP requires that interest must…
vest or be destroyed within perpetuities period.
Requirement is “vest in interest” within perpetuities period – may not necessarily mean…
coming into possession within same time.
When the INTEREST IS CREATED (2)
- Devise in a Will: date of testator’s death
2. Inter Vivos Transfer: date transfer becomes irrevocable
Lives in Being:
Persons alive or already dead at the time the interest is created
• NOTE: fetus in womb is considered “alive” for this purpose
Likely Cast of Characters to Consider for Lives in Being (4)
- Preceding life-tenant
- Potential takers of contingent interests
- Anyone affecting identity of takers
- Anyone affecting condition precedent events
Permissible PERPETUITIES PERIOD (2)
- Perpetuities Period: an interest is only valid if it must vest, if at all, within 21 years after the death of some life in being
- Validating Life: life in being with some connection to the vesting of the future interest that can be used to prove that vesting must happen, if at all, within 21 years after the end of that validating life
RULE AGAINST PERPETUITIES PROCESS (C.L.A.T.C.K.C.)
(1) CLASSIFY the future interests: Does RAP apply?
(2) LIST lives in being: Who are potential validating lives?
(3) ANALYZE: What is required for interest at issue to vest or be destroyed for RAP purposes?
(4) TEST: Is there any possibility that the interest at issue will not vest or be destroyed within 21 years of a life in being?
(5) CREAT a potential after-born person who may affect vesting.
(6) KILL all the lives in being.
(7) COUNT 21 years from the death of the lives in being: Is there any possibility of vesting after this date? If so, interest is VOID
O to A for life, then to A’s children.
The conveyance “to A’s children” is a…
Class gift
If at the time of O’s conveyance O to A for life, then to A’s children A had one child named Z, the state of title would be?
A has an indefeasibly vested life estate.
Z has a vested remainder subject to open in fee simple.
A’s unborn children are said to have executory interests in fee simple
The entire class of “A’s children” is subject to the RAP, including both Z’s vested remainder subject to open and the other unborn children’s executory interests. NOTE this means that Z’s vested remainder subject to open is not vested for purposes of the RAP and still must be tested through the class gift vesting rules of the RAP. This is because of the class gift vesting rule of “all or nothing” or “bad for one, bad for all” discussed below.
Class gift vesting under the RAP follows the “all-or-nothing” or the “bad for one, bad for all” rule. In order for a class gift to vest for purposes of the RAP, two things both have to occur:
- The entire class must be closed (i.e., all members identified), and
- All conditions precedent for each and every member of the class must be eliminated.
Note that these two things can happen somewhat independently. For example, a class might close, but other conditions to vesting might still remain for some or all of the members. In order to be vested for RAP, both requirements (class closing and elimination of each and every condition precedent) must be satisfied for each and every class member. If any contingency remains for any class member outside the perpetuities period, the entire gift to the entire class fails for everyone.
Merger (3)
- Same Party
- Successive vested interests
- Not created simultaneously in single instrument
Rule In Shelley’s Case (5)
- One instrument
- Freehold in transferee
- Subsequent (but not necessarily successive) vested or contingent remainder in same transferee’s heirs
- All equitable or all legal
- In land
Doctrine of Worthier Title (4)
- Inter vivos conveyance
- Remainder in executory interest
- In transferor’s heirs
- Must be in land for historic rule of law: modern rule of construction apply to personal property
Destructibility of Contingent Remainder (3)
- Preceding freehold estate
- Legal contingent remainder
- In land
What is bad for any one member of the class is
Bad for all the members of the class per “all or nothing”
2 things required for class gift to vest
- Class is closed
2. Conditions precedent cleared for every member
Class closing means
No more members can be added
Class closes 2 ways
- Naturally
2. Artificially
Natural close is when….
Becomes impossible to add members to class e.g. A dies
Artificial close is when…
when the first distribution can occur and does occur to at least one class member (note that this is called the Rule of Convenience, and it is a rule of construction so may technically be defeated by contrary intent)
One Rule of Convenience Wrinkle/Special Exception:
–Where there is no destructibility of contingent remainders rule, and –There are no class members eligible for a distribution at the time the first distribution would/could have occurred, then –The class does not close until it closes naturally (i.e., no Rule of Convenience applied).
