Real Property 3: Rule Against Perpetuities

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.

Contingent remainders

Executory interests

Certain vested remainders subject to open

Future interests in the GRANTOR

Indefeasibly vested remainders

Vested remainders subject to complete defeasance (subject to condition subsequent)

1. Classify the FUTURE INTEREST.

2. Identify the CONDITIONS PRECEDENT to the vesting of the suspect future interest.

3. Find a MEASURING LIFE. Look for a person alive at the date of the conveyance and ask whether that person's life or death is relevant to the condition's occurence.

4. Ask, "will we know with CERTAINTY, within 21 years of the death of the measuring life, if our future interest holder(s) can or cannot take? If there is any possibility that the condtion precedent could (or not) occur MORE THAN 21 years after the death of the mesauring life, the future interest is VOID.

1. A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP. Also, "bad as to one, bad as to all."

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.

A gift from one charity to another does NOT violate the RAP.

1. The "wait and see" or "second look" doctrine

2. The Uniform Statutory Rule Against Perpetuities (USRAP)

3. Cy pres doctrine (embraced by both the "wait and see" doctrine and the USRAP)

4. The reduction of any offensive age contingency to 21 years (embraced by both the "wait and see" doctrine and the USRAP)

5. NY Reforms

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. Whis eliminates the "what if" or "anything is possible" line of inquiry.

It is rejected by NY.

The Uniform Statutory Rule Against Perpetuities codifies the common law RAP and additionally provides for an ALTERNATIVE 90 year vesting period.

If a given disposition violates the rule, a court may reform it in a way that ost closely matches grantor's intent while complying with the RAP.

It is embraced by the "wait and see" doctrine and the USRAP.

It is rejected by NY, except for charitable trusts and powers of appoitnment.

It automatically reduces it to 21 years.

It presumes that a person is fertile NO MATTER his or her age.

It presumes that a woman over the age of 55 cannot have a child.

Also, the possibility that the person may have a child by adoption is disregarded.

The rule against suspension of the absolute power of alienation applies the common law RAP to restrictions on the power to sell or transfer.

Thus, an interest is void if it suspends the power to sell or transfer for a period longer than lives in being plus 21 years.