Rule against perpetuities Flashcards
Rule against perpetuities
no interest in property is valid unless it vests, if at all, not later than 21 years after some life in being at the creation of the interest
Basically, can’t have someone come along over 21 years after a life in being dies whose interest vested giving them a valid claim
RAP starts to run when
a. if granted by will, from the date of OR’s death
b. deeds—date of delivery.
c. Irrevocable trust—date created
d. revocable trust—day it becomes irrevocable.
Consequence of violating RAP
offensive interest stricken.
4 step technique for assesing potential RAP problem
a. Step 1: Determine which future interest has been created by the conveyance.
i. Ex: To A for life then to A’s children. Those unborn kids have contingent remainder.
1. So this is RAP territory.
b. Step 2: identify the conditions precedent to the vesting of the suspect future interest. what has to happen before a future interest holder is able to take
i. Ex.: A must die leaving a child
c. Step 3: find all possible measuring lives. Look for the people alive at the date of conveyance whose life/ death are relevant to the condition’s occurrence.
i. In past example, A is the measuring life.
d. Step 4: Will we know for sure within 21 years of the death of the measuring life if the future interest holder can take? If so the conveyance is good. If we don’t know for sure whether the future interes will vest within 21 years of the death of any measuring life, the future interest is void.
i. Ex: We will know at the instant of A’s death if A has a child or not. the uncertainty wont endure into perpetuity.
Ex of RAP 4 step process
ii. EX.: To A for life, then to the first of her children to reach the age of 30. A is 70, her only child B is 29.
1. 4 steps
a. Classify future interest: contingent remainder. so RAP territory.
b. What are conditions precedent to the vesting of the future interest?
i. A must die and have a child to reach 30.
c. Find a relevant measuring life: A’s life is relevant. B’s is not, because the grant is not B-specific. His life is not dispositive.
d. Will we know with certainty, within 21 years of A’s death if a future interest holder can take? Is there a chance that A would not have a child to reach 30 until more than 21 after A’s death? YES!! Why? Because smallest possibility destroys validity.
i. For ex, B who is 29 could die tomorrow.. Thereafter A could have another child, no matter that A is 70 (presume fertility no matter age). A could die in labor or A can live. We don’t know for sure today, whether the condition precedent—the child turning 30—will be satisfied within 21 years of A’s death.
ii. Therefore: we are left with
1. A has life estate
2. O has reversion.
first RAP bright line rule- a gift to an open class conditioned on the members surviving to an age beyond 21
a. A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the RAP
i. “Bad as to one, bad as to all.” To be valid, 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.
1. Ex. To A for life, then to A’s children that life to 30. A has 2 kids, B and C, B is 35 and C is 40
a. Because A is alive, the class is open.
b. Open class, conditioned on members surviving to age beyond 21. This means A could have a kid, die tomorrow, and then bc A is the measuring life, someone could assert a claim more than 21 years after the death of a vesting life.
e. We are left with life estate in A and reversion in OR
Reform of the RAP – wait and see or second look doctrine
i. Majority reform effort. Validity of a suspect future interest is determined on the basis of the facts as they now exist, at the end of the measuring life.
ii. This eliminates the “what if” or “anything is possible” line of inquiry. Look at the facts as they actually happen.
iii. If the interest ACTUALLY vests and fails within the perpetuities period it is OK. if not it is void.
Reform of the RAP– USRAP
i. codifies common law RAP and in addition provides for alternative 90 year vesting period. if you want a brighter line rule.
Both reforms of RAP embrace
i. The “cy pres” doctrine: meaning as near as possible.
1. if a given disposition violates the rule, the court may reform it in a way that most closely matches OR’s intent while complying with RAP
ii. The reduction of any offensive age contingency is reduced to 21 years.
fourth RAP bright line rule- Options and rights of first refusal
i. Options—generally, an option to purchase that can be exercised later than the end of the perpetuities period is void. (life in being + 21 yrs).
1. Exception: RAP doesn’t apply to option to purchase by the CURRENT lessee.
ii. Right of first refusal—RAP applies. Cannot last for more than life in being + 21 years.
ex. “B conveys Blackacre to F and his heirs; but if F and his heirs ever try to sell the property, G and his heirs have a right of first refusal”
void because G’s right of first refusal might operate well after the RAP period
Exemptions to RAP
never applies to:
reversions
possibility of reverter
rule of two charities: RAP does not apply to dispositions between charities
ex. if “to Charity 1 but if ever x, then to Charity 2”, RAP not violated
tenant options: options to purchase held by a current tenant are exempt from RAP
second RAP bright line rule -many shifting executor interests
b. Many shifting executor interests violate the RAP. A shifting executor interet with no time limit violates RAP
i. Ex: To A and his heirs, so long as the land is used for farm purposes, and if he land ceases to be so used, to B and his heirs.
1. Classify the future interest: shifting executor interest
2. conditions that trigger b’s entitlement: land ceases to be used for farming
3. Find a measurable life. A is the measuring life. She has power to abide by condition
4. Will we no for sure within 21 years of the death of our measuring life, if a future interest holder can take
a. No, A might abide, but the condition may be breached 100s of years after it was passed.
5. We are left with: To A and his heirs so long as the land is used for farm purposes
a. A now has: FS determinable
b. O now has: possibility of reverter
c. RAP problem? NO! RAP doesn’t apply to future interests in OR
ii. Compare the preceding example to: To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs.
1. Same result as in preceding example except that now, once “to b and his heirs” is stricken. The conveyance is not sound grammatically.
2. Thus entire conditional clause is stricken.
3. A now has a FS absolute
4. O has nothing!
Third RAP bright line rule- charity-to-charity exception
iii. The charity-to-charity exception . gift from one charity to another does not violate the RAP
1. ex: to the American red cross, so long as premises are used for Red cross purposes, if they cease to be used, then to the YMCA.
a. ordinarily YMCA has invalid shifting executory interest
b. bc of exception, the gift is good.
c. Am red cross has fee simple subject to the YMCA’s valid shifting executory interest
