Rule Against Perpetuities (RAP)

Question 1

What is RAP?

Answer 1

“No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest”

Question 2

What is the purpose of RAP?

Answer 2

to curtail the “dead hand” control of wealth and to facilitate the marketability of property. Courts reasoned that after 21 years, current owners of the Possessory Estate should be free to use the property as they wish/ best interest for society.

Question 3

What does RAP NOT apply to?

Answer 3

FSA, Fee Tail, Life Estate, FSD, FSSCS, FSSEI, or Term of Years

Question 4

What does RAP NOT apply to, Future Interest wise?

Answer 4

Vested Remainders, Vested Remainder subject to Divestment, Reversion, Possibility of Reverter, Right of Entry/ Power of Termination

Question 5

What RAP does apply to…

Answer 5

Contingent Remainders, Exec Interests, Vest. Rem Subject to Open

Question 6

When does a RAP violation exist?

Answer 6

If you can conceive ANY possibility that an interest might vest too late (after the lives in being + 21 years),

Question 7

What is the Rule in Shelley’s case?

Answer 7

Nearly obsolete in the US, converts an attempted conveyance of a remainder to A’s heirs into a vested remainder in FSA in “A”

Question 8

What is the Doctrine of Worthier Title?

Answer 8

Nearly obsolete in the US, where a conveyance is converted into a Future Interest retained by the grantor

Question 9

What are the 4 steps to Analyzing a RAP problem?

Answer 9

Step 1: Identify the Future Interest…
Step 2: Is the FI held by either a grantee a Cont. Rem, Exec. Int, or Vest Rem Sub to Open? if yes…
Step 3 Ask “What event triggers the vesting of that Cont. Future Interest?” isolate that event
Step 4 Ask “Is there a measuring life (person mentioned) which will provide a guarantee that the FI will either vest or not vest within that person’s life plus 21 years?

Question 10

What is the Gestation Rule?

Answer 10

“Who’s alive for RAP”? A fetus is considered alive from the time the child is conceived if the child is later born alive

Question 11

What is the Fertile Octogenarian?

Answer 11

Property law always assumes that any living person is capable of having more kids

Question 12

What is the Rule of Conveyance?

Answer 12

When a conveyance is made to a class, the class closes when the prior estate ends and the identified class members are entitled to possession. If a future class member is born after, he does not get a share

Question 13

What is the Charitable Exception?

Answer 13

If a FI is held by a charity organization, conveyance is exempt from RAP

Question 14

What are the two “wait and see” approaches to Reform RAP

Answer 14

1. Wait and see for 90 years

2. Wait and see for the CL period (lives in being + 21 years)

Question 15

What is the Uniform Statutory Rule Against Perpetuities? (USRAP)

Answer 15

the interest is valid if at least one othe following is true: it complies with the CL of RAP and it actually vests with 90 years after the conveyance

Question 16

What is Cy Press?

Answer 16

Statutory Presumptions to resolve particular problems, where some courts rewrite the language of the conveyance so that the FI no longer violates RAP while trying to preserve the grantor’s intent

Question 17

What are the Rules Furthering Marketability?

Answer 17

the create, kill, and count approach to RAP

Question 18

What does Create, Kill, and Count mean?

Answer 18

Create: someone whom the interest could vest
Kill: everyone who was alive at the time the property interests was created
Count: 21 years