Rule Against Perpetuities Practice Problems

Navigating the Labyrinth: Rule Against Perpetuities Practice Problems

The Rule Against Perpetuities (RAP), a common law doctrine designed to prevent property from being tied up in dead hands indefinitely, presents a significant challenge for students of property law. Its complex phrasing and intricate application often lead to confusion. This article delves into the intricacies of the RAP, providing a comprehensive understanding through detailed explanations, illustrative examples, and the meticulous breakdown of practice problems. Understanding the RAP is crucial for anyone involved in estate planning, real estate transactions, or trust administration.

Understanding the Rule Against Perpetuities

At its core, the RAP aims to prevent the creation of interests in property that might vest (become certain) too far into the future. The classic formulation of the rule states that: "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." This seemingly simple sentence harbors considerable complexity. Let's break down the key components:

• Vesting: An interest vests when it becomes certain who will receive the property and when they will receive it. Until that point, the interest is considered contingent.

• Life in Being: This refers to a person alive at the time the interest is created (e.g., when a will is written or a trust is established). The lives of these individuals are used as measuring lives to determine whether the interest will vest within the perpetuity period.

• 21 Years: This is added to the measuring life to account for potential gestation periods and minority.

The RAP's purpose is to prevent interests from remaining unvested indefinitely. If an interest might possibly vest beyond the "perpetuity period" (21 years after the death of the last measuring life), the interest is void. This ensures that property eventually passes to its rightful owners without unnecessary delays caused by uncertain future events.

Common Scenarios and Practice Problems

Let's dissect several scenarios to illustrate how the RAP applies in practice. Remember, the key is identifying the measuring lives and determining whether the interest must vest within the perpetuity period. If there's even a remote possibility of vesting outside this period, the interest is void.

Problem 1: The Simple Trust

"O conveys Blackacre 'to A for life, then to A's first child to reach age 25.'" Does the RAP invalidate this conveyance?

Solution: The measuring life here is A. A's first child to reach 25 must reach that age within A's lifetime (plus 21 years). This is because even if A has a child after being quite old, that child reaching the age of 25 will be within the lifetime of A plus 21 years. Therefore, the interest must vest within the perpetuity period. The RAP does not invalidate this conveyance.

Problem 2: The Uncertain Beneficiary

"O conveys Blackacre 'to A for life, then to A's grandchildren who reach age 30.'" Does the RAP invalidate this conveyance?

Solution: This is more complex. The measuring life is A. However, A could have a child who has a child long after A's death. That grandchild might reach age 30 long after A's death, extending beyond the 21-year window after the death of the measuring life. The possibility of the interest vesting outside the perpetuity period is not impossible. Therefore, the RAP does invalidate this conveyance.

Problem 3: The Charitable Remainder Trust

"O creates a trust to pay income to B for life, then to distribute the principal to the University of California, Berkeley." Does the RAP invalidate this conveyance?

Solution: Charitable interests are generally exempt from the RAP. The University of California, Berkeley is a perpetual entity and can receive the interest long after the death of the measuring life, B. However, the interest vests immediately upon B's death, satisfying the RAP's requirements. The RAP does not invalidate this conveyance.

Problem 4: The Contingent Remainder

"O conveys Blackacre 'to A for life, then to A's eldest son who graduates from law school.'" Does the RAP invalidate this conveyance?

Solution: This is more challenging. The measuring life is A. However, A's eldest son might not graduate from law school for an extended period after A's death. A hypothetical scenario with A having a child when very old that graduates later in life would exceed the allowed time. The interest might vest outside the perpetuity period. Therefore, the RAP may invalidate this conveyance depending on the jurisdiction's interpretation, as some may allow for reasonable expectation of vesting, while others would apply the strictest interpretation.

Problem 5: The Wait-and-See Doctrine

"O leaves property 'to my grandchildren who graduate from college'." How does the "wait-and-see" doctrine affect the application of the RAP?

Solution: The traditional RAP would likely invalidate this because there's a possibility that a grandchild could graduate college well beyond 21 years after the death of the measuring life (O). However, the "wait-and-see" doctrine, adopted by some jurisdictions, allows courts to wait to see if the interest actually vests within a reasonable time. If the interest vests within the common-law period, it's valid; otherwise, it's void.

Problem 6: The Uniform Statutory Rule Against Perpetuities (USRAP)

Many jurisdictions have adopted the USRAP to reform the common law RAP. How does this affect the application of the RAP?

Solution: The USRAP introduces a "wait-and-see" approach with a 90-year vesting period. This means that courts will wait to see if an interest vests within 90 years from the creation of the interest. If it does not, then the interest is void. The 90-year period offers more certainty and flexibility compared to the traditional RAP. It removes the need for complex analysis of measuring lives in many cases, simplifying the application of the rule.

The Importance of Precise Language in Drafting

The examples highlight the critical importance of precise legal drafting. Ambiguous language can easily lead to interests being invalidated under the RAP. Careful consideration of the specific language used in wills, trusts, and other instruments is essential to ensure the testator's or grantor's intentions are fulfilled. This often requires the expertise of experienced estate planning attorneys.

Beyond the Basics: Advanced Concepts

The RAP’s complexities extend beyond the basic scenarios. Advanced concepts such as:

• Class Gifts: Rules for when interests vest in a group of beneficiaries (a class).
• Fertile Octogenarian: The hypothetical possibility of a woman having a child at an advanced age affects the application of the RAP.
• Unborn Widow: The possibility of a widow being born after the testator's death, resulting in an interest possibly vesting outside the perpetuity period.

These are further intricacies that demand a deeper understanding and expertise to navigate effectively.

The Gradual Decline of the RAP

Over time, the RAP has faced increasing criticism due to its complexity and unintended consequences. Many jurisdictions have either abolished it entirely or significantly reformed it through legislation like the USRAP. Even with reforms, the core principles of preventing indefinite postponement of vesting remain relevant in property law.

Frequently Asked Questions (FAQs)

Q: What happens if an interest violates the RAP?

A: If an interest violates the RAP, it is void. The property subject to that interest will typically revert back to the grantor or their heirs, or pass according to other provisions in the governing document.

Q: Why is the RAP still relevant if many jurisdictions have reformed or abolished it?

A: While many jurisdictions have altered or eliminated the RAP, understanding its principles remains essential for interpreting existing instruments and for understanding the rationale behind modern property law reforms.

Q: Is the RAP applied the same way in all jurisdictions?

A: No. The application of the RAP varies by jurisdiction due to differing interpretations of the common law rule and the adoption of varying reforms.

Q: Can I avoid the RAP by using specific language in my will or trust?

A: Yes, careful and precise legal language drafted by a qualified attorney can help to avoid potential RAP issues.

Conclusion

The Rule Against Perpetuities, though complex, is a cornerstone of property law. By understanding its core principles, applying them to practice problems, and appreciating the nuances of its application, one can navigate the potential pitfalls of indefinite vesting and ensure the smooth transfer of property interests. While reform and abolition efforts have changed the landscape, the underlying purpose of preventing perpetual tying up of property remains a significant consideration in estate planning and property law generally. Thorough knowledge of the RAP, and its modern equivalents, remains crucial for lawyers, trust administrators, and anyone involved in managing property interests. The practice problems explored here offer a strong foundation for developing this crucial legal understanding. Further study and consultation with legal professionals are recommended for comprehensive mastery of this complex legal doctrine.