Rule Against Perpetuities

Question 1

What is the Rule against Perpetuties?

Answer 1

Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.

Question 2

What is the four step technique for assessing potential RAP problems?

Answer 2

1. Determine which future interests have been created by the conveyance.

The RAP potentially applies only to contingent remainders, executory interests, and certain vested remainders subject to open. The RAP does NOT apply to any future interest in the grantor, indefeasibly vested remainders, or to vested remainder subject to complete defeasance.

2. Identify the conditions precedent to the vesting of the suspect future interest. What has to happen before a future interest holder can take?
3. Find a measuring life. Look for a person alive at the date of the conveyance and ask whether that person’s life or death is relevant to the condition’s occurence.
4. Then ask: will we know, WITH CERTAINTY, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take? if so, the conveyance is good. if not, the future interest is void.

Question 3

How do open class gifts violate common law RAP?

Answer 3

A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP.

“Bad as to one, bad as to all.”: To be valid, it must be shown that the condition precedent to every class member’s taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class, the entire class gift is void.

Question 4

How do shifting executory interests violate the common law RAP?

Answer 4

Many shfiting executory interests violate the RAP, because an executory interest with no limit on the time within which it must vest violates the RAP.

Question 5

What is the charity-to-charity exception to common law RAP?

Answer 5

A gift from one charity to another does not violate the RAP, even if it is an invalid shifting executory interest in any other instance.

Question 6

How has the RAP been reformed in recent times?

Answer 6

1. The “wait and see” or “second look” doctrine: Under this majority reform effort, the validity of any suspect future interest is determine don the basis of the facts as they now exist at the end of our measuring life. This eliminates the “What if” or “anything is possible” line of inquiry.
2. The Uniform Statutory Rule Against Perpetuity: Codifies the common law RAP and, in addition, provides for alternative 90 year vesting period.

Both the “wait and see” and USRAP reform embrace:

a. the “cy pres” doctrine (or “as near as possible”), which states that if a given disposition violates the rule, a court may reform it in a way that most closely matches the grantor’s intent, while still complying with RAP.
b. the reduction of any offensive age contingency to 21 years.

**New York **applies the common law RAP, and has rejected “wait and see” and “cy pres”, except for charitable trusts and powers of appointment.