The Rule Against Perpetuities ("RAP")

Question 1

What is the rule against perpetuities? When does the RAP apply? When doesn’t the RAP apply?

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.

RAP Applies To:

• Contingent remainders
• Executory Interests
• Right of first refusal
• Certain vested remainders subject to open.

RAP Does NOT Apply To:

• Future interests in O, the grantor (a reversion)
• Indefeasible vested remainders
• Vested remainders subject to complete defeasance

Question 2

What is the four-step technique for assessing potention RAP problems?

Answer 2

1. Classify the future interest
2. What are the conditions precedent to the vesting of the future interest?
3. Find a measuring life.
4. Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if a future interest holder can take?

Question 3

What are the two bright line rules of common law RAP?

Answer 3

1. 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 valide, 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.
2. Many shifting executory interests violate the RAP. An executory interest with no limit on the time within which it must vest violates the RAP.

Question 4

What is the charity-to-charity exception for the RAP?

Answer 4

A gift from one charity to another will not violate the RAP.

Question 5

What is the doctrine of cy pres?

Answer 5

Means “as near as possible.” If a given disposition violates the rule, a court may reform it in a way that most closely matches grantors intent while still complying with the RAP.

Question 6

What is the “wait and see” or “second look” doctrine?

Answer 6

Under the majority refom effort of the RAP, the validity of any suspect future interest is determined on the basis of the facts as they now exist, at the end of the measuring life. This elimites the “what if” or “anything is possible” line of inquiry.