Rule Against Perpetuities

Question 1

General Rule

Answer 1

Certain future interests are void if there is any possibility, however remote, that the interest might vest more than 21 years after a person alive at the time of the grant has died.

Question 2

When does the RAP begin to run?

Answer 2

Depends on the instrument and the interest created.

BY WILL: it runs from the date of the testator’s death

BY DEED: it is the date of delivery.

IRREVOCABLE TRUST: from the date it is created

REVOCABLE TRUST: from the date it becomes irrevocable

Question 3

When does the interest “vest”?

Answer 3

An interest vests when it becomes: (1) possessory, or (2) an indefeasibly vested remainder or a vested remainder subject to total divestment.

Question 4

Whose “life in being” do we use?

Answer 4

Unless other measuring lives are specified, one connected with the vesting of the interest is used.

i.e., a person alive at the date of the conveyance whose life and/or death is relevant to the prescribed condition’s occurrence.

Question 5

4 Step Approach for RAP Problems

Answer 5

1. Determine the Future Interest
2. What needs to happen for the future interest holder to take
3. Find measuring life
4. When will we know if future interest holder can take? Within 21 years of the death of a measuring life?

Question 6

Which interests are subject to RAP?

Answer 6

RAP applies only to:
- Contingent remainders
- Executory interests
- Vested remainders subject to open
- Options to purchase, and
- Rights of first refusal.

RAP does not apply to:
- The grantor’s interests: Reversions, possibilities of reverter, rights of entry