Rule Against Perpetuities

1
Rule Against Perpetuities

• Precious Toddlers, Fertile Octogenarians, and
  Other Odd Balls

2
What Policies Does RAP Serve?

• Is RAP just like courts applying Shelleys case,
  blindly following a rule whose purpose is gone?

3
The Rule

• No interest is valid unless it must vest, if at
  all, within lives in being plus 21 years.
• Or
• A nonvested interest is valid if it is absolutely
  certain to vest, or fail to vest, not later than
  21 years after the death of some life in being at
  the creation of the interest.

• Applies to
• Contingent remainders
• Vested subject to open
• Executory interests
• Following life estates
• Following FSEL
• Certain modern interests (776)
• Why 21 years?
• Possibilities are enough what happens doesnt
  matter!

4
How Avoid?

• Statutes
• Various approaches that may not be thoroughly
  helpful to grantees.
• Wait See
• Reformation
• USRAP

• Savings Clause
• Contract, will, etc.
• Whats good language?
• What might work?

5
How to Analyze

• Analyze the future interest.
• Determine when period begins to run
• - For grant, at effect of grant for will, when
  grantor dies.
• Identify people who are identifiable from the
  grant instrument
• Identify what causes the interest to vest.
• - Kruezer special rule for class gifts.
• Is there any possibility vesting will occur more
  than 21 years after period begins?

6
Problems

• At a time when Bob has no children, this grant
  To Bob for life, then to Bobs children for
  life, then to his grandchildren in fee simple.
• What are the interests?
• Do any violate RAP?

• What if at the time of grant, Bob has one child?
  
• What if at the time of grant, he has 1 child and
  1 grand child?

7
Another Problem

• To Bob for life, then to Bobs widow for life,
  then to Bobs children then living and their
  heirs. At the time of the grant, Bob, Bobs
  wife, and Bobs son are all alive.
• What interests?
• Any violate RAP?

8
And Still Another

• To Bob so long as he farms the land.
• What are the interests?
• Do any violate RAP?

• To Bob, but if he stops farming the land,
  grantor ha the right to reenter and take back the
  property.
• What interests?
• Any violate RAP?

9
And Another One

• To Susie for life, remainder in FSA to Susies
  children who attain age 21. At time of grant,
  Susie has 1 child who is 10 years old.
• What interests?
• Valid under RAP?

• What if Susie had no children?

10
And still more

• To Bob for 21 years, then to Susie.

• To Bob for 35 years, then to Susie.