Property law is renowned for its intricate legal concepts, making it a challenging subject in law school. However, among all these concepts, none instills more fear and complexity in law students than the rule against perpetuities, commonly known as the “RAP.”
Breaking Down the Rule Text
The actual rule is succinctly stated as follows:
“No interest is valid unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest.”
While this sentence appears straightforward, it is laden with nuanced meanings that often make comprehending the rule difficult for both law students and lawyers.
Understanding the Text: The Rule’s Elements
The term “interest” refers to property interests such as fee simple or life estates. However, the RAP does not apply to these simple interests as they typically vest immediately. Instead, the RAP applies to a specific type of interest known as future interests. Notable examples of future interests subject to the RAP include contingent remainders and executory interests. Other less common future interests include “interests subject to open,” “rights of first refusal,” “options to purchase,” and “powers of appointment.”
Must Vest, If at All
It helps to think of “vesting” as a game of catch. The property interest is the “ball,” which “vests” when it reaches the hands of an identifiable person. According to the RAP, this ball must reach someone beyond any doubt within the prescribed time limit (life plus 21 years). If there is even a remote possibility of the interest not vesting within this limit, the property transfer violates the RAP.
No Later Than 21 Years After Some Life in Being
The timeframe of 21 years is easy to grasp. However, “life in being” requires further explanation, specifically when considering “at the creation of the interest.” Put simply, “life in being” refers to the individuals who are alive and ascertainable when the interest is created. Imagining the “game of catch” analogy, the person throwing the ball (the grantor) must have an objectively identifiable final recipient at the time of the interest’s creation. The longest the ball can remain uncaught is the duration of the “life in being” (also known as the “measuring life”) plus 21 years after the measuring life ends.
Putting the Pieces Together
To determine if the RAP applies, we first establish if the interest in question is a future interest. If so, we examine whether it falls under the category of a contingent remainder or executory interest. The RAP’s application is contingent on the creation of the interest, which can occur during the grantor’s lifetime or through a devise (e.g., via a will). We then identify the relevant “life in being” at the time of the interest’s creation to start the clock. This can be a single person or a class of individuals, provided the class is “closed” and no additional members can be added.
The RAP in Action: Examples
Consider these examples for a better understanding:
A conveys Blackacre to B and her heirs, as long as tobacco is never grown on the property. However, if tobacco is ever grown on the property, it passes to C and his heirs. C’s interest violates the RAP. While it is possible for tobacco to be grown on Blackacre within six months of the interest’s creation, the RAP disregards mere possibilities. It focuses on whether the interest will certainly vest within the specified time limit. Since it is uncertain if the interest will vest within 21 years after some life in being, C’s interest is not valid under the RAP.
A devises Blackacre to B for life, and then to the last of A’s grandchildren to reach the age of 22. Whether A’s grandchildren’s interest violates the RAP depends on two factors: whether any of A’s children outlive A and the age of A’s youngest grandchild at the time of A’s death. If any of A’s children survive A, the interest held by A’s grandchildren violates the RAP. Although the class “A’s children” is closed, “A’s grandchildren” remains open since A’s children are alive and capable of having children. As open classes cannot be used as measuring lives, the only closed class – A’s children – serves as the measuring lives. If A’s children continue to have children until their death, more than 21 years may pass before the interest vests. Hence, A’s grandchildren’s interest violates the RAP.
These examples provide a glimpse into the complexities of the RAP. While it may seem like an antiquated rule, many states still enforce it. By mastering the RAP, you can save time and minimize mistakes in property law.
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