RAP- Executory Interest Notes PDF

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Property Law I; Rules Against Perpetuities Chapter Notes - focus on executory interests...

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Property I Lecture Notes FOCUS: RULES AGAINST PERPETUITIES

MEANING OF “VEST” A vested interest is not subject to RAP; a contingent interest is Exception – Class Gift A gift to a class is not vested in any member of the class until the interests of all members have vested. Aka, a class gift is not vested under RAP until all class members are identified and all conditions precedent have been satisfied for every member of the class If the gift to one member of the class might vest too remotely, the whole class gift is void ALL OR NOTHING RULE Ex. T! A for life, then to A’s children for their lives, then to A’s grandchildren in fee simple Look at Pg. 150 Rationale A class gift is not vested under the Rule until all the class members are known and have vested interests because only at that point is the interest marketable Although a class gift may be vested in one member subject to open up and let in others, which may satisfy other rules restricting contingent remainders such a class gift does not satisfy the policy of RAP against making property unmarketable until too long

Executory Interest An executory interest following a determinable fee or divesting a fee simple vests only when the condition happens and it becomes a possessory estate

REMOTE POSSIBILITIES An interest is void under RAP if by any possibilities-however remote – the interest might vest beyond the perpetuities period If a situation can be imagined in which the interest might not vest or fail within the relevant lives in being plus 21 years, the interest is void The Fertile Octogenarian The law conclusively presumes that a person can have children so long as the person is alive The Unborn Widow A person’s surviving spouse might turn out to be a person not now alive A man’s present wife may die or be divorced, and the man may in the future marry a woman not now alive. The Slothful Executor A bequest to vest “when my estate is settled” or “when my executor is appointed” violates the rule because the named event may not happen within lives in being plus 21 years

APPLICATION TO DEFEASIBLE FEES RAP does not apply to possibilities of reverter and rights of entry, which are regarded as vested interests, but it does apply to executory interests Fee Simple Determinable A possibility of reverter is exempt from the Rule. An executory interest is subject to it Ex. O! School Board so long as used for school purposes, and if the land shall cease to be used for school purposes, to A and his heirs A’s executory interest, if valid, would be transmissible to A’s heirs, and their heirs, and so on through time. It might

not become possessory for centuries, and certainly it will not necessarily become possessory within A’s life plus 21 years. A’s executory interest is void The language leaves the school board with a FSD, because this is so, it will automatically end in the event it stops being used for school purposes and O has a possibility of reverter...