RAP & Rule Against Suspension

Question 1

When is an interest vested?

Answer 1

When there is no condition that has to be satisfied and the exact identity of the taker is known.

Question 2

Age contingencies in NY?

Answer 2

Reform statute automatically reduces all age contingencies to 21 years

Question 3

NY Rule Against Suspension of the Power of Alienation

Answer 3

To be valid under the suspension rule, there must be persons in being who could join together in a conveyance of the full fee simple title WITHIN lives and being plus 21 years.

Question 4

When is suspension of alienation a concern?

Answer 4

1- spendthrift income interests are in a trust (often in NY); OR

2- a life estate is created in an UNBORN person OR in an OPEN CLASS that may possibly include unborn persons (b/c unborn people cannot agree to sell/transfer property interests)

NOTE: Because of the NY statutory spendthrift rule, the suspension rule will be violated whenever a lifetime income interest is created in an unborn person or in a class that may contain unborn persons. (This means that the interest cannot be alienatedbecause the present estate holders cannot get together with the unbornperson to sell in fee simple absolute).