Rule Against Perpetuities

Question 1

CA Rule

Answer 1

A nonvested property interest is invalid unless one of the following conditions is satisfied:

(a) When the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive.

(b) The interest either vests or terminates within 90 years after its creation.

Question 2

RAP at Common Law

Answer 2

At Common Law, any interest which might not vest with the RAP period was void (and therefore failed), including “all-or-nothing” for class gifts

Question 3

Policy for RAP

Answer 3

• Keeping assets marketable
• Limiting dead hand control

Question 4

What is a “life in being”

Answer 4

Can be any person alive (depending up the definition)
- Referred to as a “measuring life” or “validating life”
- Generally fairly narrow (e.g., T’s issues then alive at the date of the trust instrument)
- Can be broad (e.g., 21 years after the death of the last survivor of the descendants of King Charles II, King of England living as of the date of this Declaration)

Question 5

HYPO: Sally creates a revocable trust on 11/01/1973. Sally dies on 07/25/1982. When does the Perpetuities Period Begin?

Answer 5

Begins to run from 07/25/1982

Question 6

HYPO: Terrance executes his Will on 08/01/1982. Terrance dies on 12/31/2009. When does the Perpetuities Period Begin?

Answer 6

The perpetuities period begins to run from 12/31/2009

Question 7

HYPO: Sally creates a revocable trust on 11/01/1973. Sally dies on 07/25/1982. The terms of Sally’s Trust create an irrevocable trust FBO Terrance, and Terrance has a Special POA. Terrance executes his Will on 08/01/1982, with a provision validly exercising the Special POA. Terrance dies on 12/31/2009. When does the Perpetuities Period Begin?

Answer 7

The perpetuities period begins to run from 07/25/1982.

Question 8

Fertile Octogenarian Doctrine

Answer 8

Conclusive presumption of fertility, regardless of age, extending distribution beyond RAP period.

Question 9

Unborn Widow Doctrine

Answer 9

Widow may not be born at death of testator/trustor, extending beyond RAP period

Question 10

Slothful Executor Doctrine

Answer 10

Administration of estate could extend beyond RAP period

Question 11

RAP Savings Clauses

Answer 11

Basically a catch-all provision that terminates the trust at the end of the RAP period.