Rule against perpetuities Flashcards
Three vulnerable Future Interests
1) Contingent remainders
2) Vested remainders subject to open
3) Executory interests
Example: Concept of Rule against perpetuities.
O to A, but if the Land ever ceases to be used as a farm, then to B.
- B may not ever take possession.
- B’s contingent Interest may cloud title, and prevent the profitable use of the land.
- Concerned about unlimited contingent interests.
Compromise = 21 year Rule
Owner’s Right to Control the Land for 21 years after our Deaths.
After 21 years, property must be vested and closed, or failed.
Stops being contingent when:
- Vests and Closes, or
- Fails
Rule Against Perpetuities
A Future Interest is Void the moment it’s created if:
1) It is in a grantee (a remainder or an executory interest):
2) it is either contingent (given to an unascertained taker or subject to a condition precedent or both) or subject to open; and
3) It might still exist and still be contingent or subject to open longer than 21 years after the death of the last person alive at the time of conveyance.
Permitted Time Period
Rule Defines the Time period as 21 Years after the death of the last life in being.
Life in Being
Last person alive at the time of Conveyance.
O to A for life, then to A’s Children (A has no Children at time)
Vulnerable Interest = Contingent remainder to A’s Children
What is the longest possible time ti might take before there will be an ascertained holder, or the contingency fails.
Answer: Any Children will be conceived before he dies.
What is the possible life span permitted?
21 years after death of last person alive at conveyance.
Passes Test because contingency will either vest or fail within 21 years of death of A.
O to A for life, then to A’s Children
Two Children B and C.
- Vested Remainder subject to Open
What is the longest possible time before the vested remainder will close?
Answer: Death of A.
Compare to Rule of +21 Years:
- 21 years after death of A.
PASSES TEST.
Validating Life
Someone whose life proves that the interest will either fail or vest and close within the permitted time period.
e.g. A。
O to A for life, then to A’s Children who reach 30.
B and C are 32 and 33, respectively
B and C = Vested Remainder Subject to Open
(A can have more kids.)
Longest possible time it might take before the vested remainder will close?
Answer: 30 years after the death of A.
Compare with permitted time period: 21 years after death of A and EVERYONE ALIVE AT THE CONVEYANCE
= Longer than 21 years.
No Validating life = TEST FAILS.
