LAW 515-001 – Property I

Rule Against Perpetuities


No interest is good unless it must vest and close, if at all, not later than twenty-one years after some life in being at the creation of the interest.

Does not apply to future interests in the grantor.

If the rule applies, strike out the offending future interest immediately at the time of conveyance.

Book's definition

A future interest is void the moment it is created if:

  1. It is given to a grantee (a remainder or an executory interest);
  2. It is either contingent (given to an unascertained taker or subject to a condition precedent or both) or subject to open [or executory]; and
  3. It might still be contingent or subject to open longer than 21 years after the death of the last person alive at the time of the conveyance.
Charitable Exemption

If both the possessory estate and vulnerable future interests are conveyed to charities, then the Rule Against Perpetuities does not apply.

Reforms:

Wait & See

The Wait & See reform does not test for possibilities at the time of conveyance.

It will test after one of two times:

  1. Wait & see for the common law period (lives in being plus 21 years)
  2. Wait & see for 90 years
Uniform Statutory Rule Against Perpetuities

Interest is valid if at least one of the following is true:

  • It complies with the original Rule against Perpetuities
  • It is certain to either vest and close or fail within 90 years
  • It actually vests and closes or fails within 90 years (a "wait and see" approach)
Saving Clause

Saving Clause in conveyance creates a time limit on when future interests must vest; not surprisingly, that time limit is 21 years after the death of some life in being at the time of the conveyance.

i.e., add "within 21 years of the death of B" to conditions.