Rule Against Perpetuities

Rule

No interest in a transferee is valid unless it must vest, if at all, not later than 21 years after some life in being (in existence) at the creation of the interest.

Elements

To apply the Rule Against Perpetuities:

1. Identify the interest: RAP applies only to contingent remainders and executory interests in transferees (not grantor’s reversionary interests)
2. Identify a validating life: a person alive at the creation of the interest who will resolve the contingency within their lifetime (plus 21 years)
3. Ask whether the interest must vest or fail within that period: if there is any possible scenario — however unlikely — where the interest does not vest or fail within 21 years of the validating life’s death, the interest is void
4. Apply any saving construction: the offending interest is stricken; the rest of the conveyance may stand
5. Check for statutory reform: many states have enacted USRAP (90-year wait-and-see) or abolished RAP for certain interests

Mechanics

1. Identify contingent interests in transferees only — RAP applies only to contingent remainders and executory interests (not vested interests, not reversions/possibilities of reverter/rights of re-entry in the grantor)
2. Identify the validating life — a person alive at creation of the interest within whose lifetime (plus 21 years) the interest must certainly vest or fail
   • If the class is open (e.g., “A’s children” while A is alive), members of that class cannot serve as validating lives
   • If the class is closed (e.g., “A’s children” after A is dead), the class members can serve as validating lives
3. Ask: Is it certain that within 21 years of the validating life’s death the interest will either vest or fail?
   • If yes: the interest is valid
   • If no: the interest is invalid and is stricken

Common Traps

• Unborn widow: “to B’s widow if then living” — B’s widow is not yet identified; cannot use B as validating life because B’s widow may be someone not yet born
• Fertile octogenarian: courts treat anyone, regardless of age, as capable of having children
• Open class gifts: “to A’s children who reach 30” while A is alive — A can have another child, and that child might not reach 30 within 21 years of A’s death
• Administrative contingency: condition tied to a government act (e.g., “when probate closes”) may not occur within the period

Wait-and-See / Reform

Some jurisdictions apply a “wait-and-see” approach, holding the interest in abeyance to see if it actually vests within the period. The Uniform Statutory Rule Against Perpetuities (USRAP) permits a 90-year wait-and-see period as an alternative.

What RAP Does NOT Apply To

• Future interests in the grantor (reversion, possibility of reverter, right of re-entry)
• Charitable gifts from one charity to another
• Vested remainders (identity known, no condition precedent)

Policy

• Prevents “dead hand control” that ties up property for generations
• Promotes alienability and productive use of land
• Reduces transaction costs from property encumbered by unknown contingent interests

Key Cases

• No specific landmark cases in the notes, but RAP is illustrated through many exam-style hypotheticals throughout the course

Covered In

• Property