ProfDale Property Video 12 - The Rule Against Perpetuities

How to analyze future interests for compliance with the Rule Against Perpetuities.

[@danielcutting2796]

Very clear, thank you. New subscriber

[@lapolinario93]

amazing, helped so much before my final. thank you.

[@sfbluestar]

Agree this is the best video among the 10+ videos I saw.

[@ellincowie1573]

In example to A for life, then to A's grandchildren. Can the Grandchildren who are alive at time of conveyance convey their contingent remainder by inter vivos transfer? What about if they should predecease A, can their their contingent remainder pass by intestacy or by will (if they are old enough)?

[@fredmertzful]

The common law only allowed contingent remainders to pass by intestate succession, not by will or deed. However, this restriction has now been done away with in nearly all US states. It is now reasonable to assume that one can convey a contingent remainder by deed, will, or intestate succession. But bear in mind that if the jurisdiction still follows the common law RAP, and if there are no grandchildren born to A at the time of the original conveyance, the RAP will make the contingent remainder void. Hence, there won't be anything to convey or anybody to convey it.

[@ellincowie1573]

@@fredmertzful I thought the class closed at A's death, rather than at time of conveyance. Otherwise, it wouldn't make sense to make a devise to one's grandchildren if there are none living at the time of the conveyance. Also, in the example "to A for life, then to A's grandchildren, including those born after A dies," if A has living children at time of conveyance, why are they not counted as "lives in being" such that any child born to them would be within the RAP period?

[@eswyatt]

So first, there were entails (common law). These could be barred or docked (common recovery, fine, etc). Then executory interests brought back the specter of the entail (because the courts would allow the alienated property to be removed from the hapless buyer by a shifting use if a direct -issue-heir sued ?). RAP to the rescue, no endless entails. But then "family settlements" made the entail a vexing problem once again. I know I screwed up at least once here haha. But am I correct in thinking that any vexing entail in popular culture (Downton Abbey, Price & Prejudice) must be an executory entail, and must involve a family settlement (because otherwise it could be docked or would violate RAP). I can't understand settlements for the life of me.

[@profdalespropertyvideos185]

John - I'm not a legal historian, but here's my understanding. During the early modern period the landed aristocracy in England were focused on retaining their land within the family indefinitely for successive generations. However, by developing the "fine" and "common recovery" the common law courts enabled holders of entailed property to alienate it in fee simple. Lawyers for the landed aristocracy tried a variety of methods to attempt to frustrate this principle of free alienation, but they eventually all came to naught. After Mary Portington's case in 1614 it was clear that aristocrats had no tools left to make their land inalienable for successive generations by using the fee tail; unbarrable entails had become impossible. Lawyers for the gentry also tried creating successive generations of contingent remainders, but this practice began to meet its doom with the Duke of Norfolk's Case in 1682, which introduced the Rule Against Perpetuities. The aristocracy then shifted to a different objective. Their lawyers developed the "strict settlement," which was designed to allocate the parents' wealth fairly to their children and grandchildren. This was typically done by transmitting the legal title to the land to one child (usually the oldest son, following the custom of primogeniture), but imposing on the land a trust or set of trusts that obligated the legal title holder to pay cash stipends to the other children (and possibly grandchildren). Often these payments could be made only by mortgaging the land to create a source of cash. Thus the result was a "family settlement" that distributed the wealth (although not the legal land title) fairly to all. In this context (beginning shortly before the start of the Eighteenth Century), the wealthy parents realized that they could not prevent the ultimate alienation of the land outside the family; that was no longer their goal. Essentially, they were limited to forcing the retention of the land in the family for no more than two generations. But they could dictate how their wealth was to be distributed for that limited period.

[@eswyatt]

@@profdalespropertyvideos185 Thank you so much. That sheds some light on settlements. What I know I know from what sense I can make of J.H. Baker and Moynihan, though the latter says nothing about family settlements.

[@sfbluestar]

"Land Trust" aims to keep keep land undeveloped forever. While a noble mission, does that violate RAP?

[@sfbluestar]

Does RAP only apply to land? Can it apply to money?

[@fredmertzful]

The RAP does indeed apply to personal property, including money. But of course, it applies only to future interests, such as contingent remainders and executory interests. Land trusts usually involve only present interests, so once again, the RAP won’t apply.

[@fredmertzful]

That last line should read "Trusts of money usually involve only present interests, so the RAP won't apply."