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The Rule Against Perpetuities -- Demystified! - TestGuru

The RAP: Any interest must vest, if at all,not later than 21 years after a life in beingat the creation of the interest. This short bit of legal prose has terrified law students(and saddled unsuspecting attorneys with malpracticeliability) for generations. It needn t cause you any(further) distress, however, as you ve come to the rightplace! If you ll work your way through this document andits associated set of exercises, you ll emerge with a fairlyrobust understanding of the rule certainly robustenough to crush the RAPon a 1st-year property final orthe Multistate Bar Exam. So let s get to parsing the Any interest This doesn t actually mean anyinterest. So what does itmean?

The RAP: “Any interest must vest, if at all, not later than 21 years after a life in being at the creation of the interest.” This short bit of legal prose has terrified law students

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Transcription of The Rule Against Perpetuities -- Demystified! - TestGuru

1 The RAP: Any interest must vest, if at all,not later than 21 years after a life in beingat the creation of the interest. This short bit of legal prose has terrified law students(and saddled unsuspecting attorneys with malpracticeliability) for generations. It needn t cause you any(further) distress, however, as you ve come to the rightplace! If you ll work your way through this document andits associated set of exercises, you ll emerge with a fairlyrobust understanding of the rule certainly robustenough to crush the RAPon a 1st-year property final orthe Multistate Bar Exam. So let s get to parsing the Any interest This doesn t actually mean anyinterest. So what does itmean?

2 Many authorities will tell you that it refers to contingent interests. This is arguably correct, so long asyou re careful to define the term contingent in such away as to make it correct. Such a definition of contingent in addition to smacking of circularity will hurt yourbrain in other ways: , how can a vestedremaindersubject to open (which everybody agrees is subject to theRAP) be a contingent interest? , the best way to understand the words anyinterest is to pretend that they read certain interests, and then just memorizewhich interests are the certain ones. I m not generally an advocate of memorizing stuff;I d prefer to understand it. Here, though, it s impossibleto understand the rationale for why the RAP applies toone interest and not to another, unless you re a scholar ofthe intricacies of seisin and other medieval arcana (andeven then all bets may be off ).

3 I do believe that a partialunderstanding, however, can guide you into certain safeharbors and thus simplify your memorization task andalso help you avoid making really stupid that for purposes of a final exam in real property orthe bar exam, you d be a fool to try and memorize all thegory details. There are just too many subtle (and notnecessarily rational) exceptions, etc. Rather, my advice isto memorize the most important and most frequentlytested interests (see my enumeration, below). Granted, ifyou re taking or, God forbid, teaching a seminardedicated to the historical evolution of the RAP, then thisadvice obviously doesn t apply to you. And it s not evenclear why you re reading this.

4 Although you do sound likethe kind of person I d like to have a beer with, whichprobably reveals the magnitude of my s cultivate that partial The way tothink about those certain interests is that they all raisea question: Will A survive B? Will alcohol ever be sold onthe property? Will A have more children and thus diluteB s share? Etc. The RAP is merely an expression that thelaw won t tolerate questions that might go unansweredfor too long a time. ( But, you say, the law tolerates allmanner of questions that might go unanswered for toolong a time , the question implicit in a fee simpledeterminable. Touch !)At the end of the day, you re gonna have to do somememorizing.

5 Our partial understanding at least helps uswith the memorization. money-in-the-bank, bread-and-butter, groundball-to-short-over-to-first-for-th e-out interests to which the RAPapplies are: contingent remainders executory interestsOther interests that the RAP applies to include: interests subject to open powers of appointment options to purchase (other than tenant s option during lease term) rights of first refusal (so I ve heard)Page 1 of 3 2007 Rich Klarman ( ). All rights Rule Against Perpetuities Demystified! BY RICH KLARMANRich Klarman is a private tutor based in Ann Arbor, Michigan. Since 1992, he has helped hundreds of students conquerthe LSAT, law school coursework/exams, and the bar exam.

6 To learn more, visit {sans explanations!} If you want a freakin exhaustive list, there are manyentire books on the subject. I d suggest not worryingabout it. that the following interests are NOT subject to theRAP: present interests vested remainders (other than vested subject to open!) any interest retained by the grantor (reversions, possibility of reverter, right of entry) must vest, if at all, This means that we must get a final answerto ourquestion. The question mark floating around must bereplaced with a period. The RAP doesn t give a damnwhat the answer is , it vested and it hasn tvested, and it ain t never gonna vest are equally goodanswers, in the sense that they re both final answers.

7 Incontrast, it hasn't vested yet is not a good answer,because it doesn t lay the question to rest tomorrowthe answer might be that it is completely irrelevant that we mightget ourquestion answered in time. If it s at all possible that wewon t get our question answered in time, then it fails theRAP. In other words, we perform the RAPanalysis abinitio;we do not wait and see what ultimately happens.(Note, however, that many American jurisdictions haveadopted a wait-and-see approach. But the topic we reexamining in this document is the common law RAP.) not later than 21 years after a life in beingat the creation of the interest. This is the common law s super-freaky way of saying: innot too long of a time.

8 If the RAP read not later than 90years after the creation of the interest, it wouldn t be asgnarly. In fact, many jurisdictions now do somethingalong these lines they abandon super-freaky timereckoning, opting instead for something , the Multistate Bar Exam remains neck-deep in thesuper-freak. So let s take a closer look:not later than 21 years afterThis means no more than 21years after the death(of the measuring life). Note thatexactly 21 years after that death would be just in time , it wouldn t be later than and would therefore bekosher by the skin on its that gestation periods do not count toward this 21-year window. Gestation periods are regarded assomehow being non-time, or life in beingThis means a living, ascertained person(any freakin living person you can point your finger at indeed, any closed class of living persons you can pointyour finger at).

9 Note that, here as well, gestation periods are ignored: soa zygote (indeed, even a soon-to-be-fertilized egg) inexistence now that is subsequently born alive is deemedto have been alive now. This follows from the legal fictionthat dead people can t have additional children (which, atleast in the case of men, is indeed a fiction).(Many students seem to harbor the mistaken belief thatthis person this life in being guy must be namedin the grant or must be a life tenant or something. Wrong,wrong, wrong! Any freakin living person on the planetqualifies for consideration. (Didn t I just say that in thepreceding paragraph?) In many cases, we wind up using adude mentioned in the grant, not because of someformalistic requirement that the measuring life must be adude mentioned in the grant, but rather because he s theonly guy who works , he s the only guy in theuniverse who will save the interest.)

10 But there are manytrivial cases (what I refer to as the 21-years-from-right-now situations) where anybody walking down the streetwill work.)But when exactly do you have to perform this fingerpointing ritual, this ascertaining ? And when exactlydoes this living person have to be alive? The answer toboth of these questions is the same: it the creation of the interestThis means at the momentin time when the interest was created, since that isprecisely the moment when the question to vest ornot to vest? that is the question first arose. Forinterests created by devise, it s the instant of thetestator s death. For interests created by conveyance, it sthe instant of the conveyance (presumably, delivery ofthe deed).


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