Rule Against Perpetuities
What is the Rule Against Perpetuities?
No future interest in a transferee is valid unless it must vest, if at all, no later than twenty-one years after the death of some life in being at the creation of the interest.
Source: Duke of Norfolk's Case, 3 Ch. Cas. 1, 22 Eng. Rep. 931 (1682)
Definition
The Rule Against Perpetuities (RAP) is one of the most important and notoriously difficult doctrines in property law. Its purpose is to prevent the tying up of property for unreasonably long periods by invalidating future interests that might remain contingent beyond the perpetuities period. The classic formulation, derived from John Chipman Gray, states: 'No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.'
The RAP applies to contingent remainders, executory interests, vested remainders subject to open (class gifts), and options and rights of first refusal held by third parties. It does not apply to future interests retained by the grantor, including reversions, possibilities of reverter, and rights of entry. Under the traditional common-law rule, validity is determined at the time the interest is created, and the analysis requires identifying a validating life -- a person alive at the creation of the interest by whom vesting can be measured. If there is any possible scenario, however unlikely, under which the interest might vest beyond the perpetuities period, the interest is void ab initio.
Many jurisdictions have reformed the RAP. The Uniform Statutory Rule Against Perpetuities (USRAP) adds a 'wait and see' period of ninety years as an alternative. Some states have adopted cy pres reformation, which allows courts to reform interests to comply with the RAP rather than striking them entirely. A few states have abolished the RAP altogether for interests in trust.
Key Elements
- 1Identify the future interest and confirm the RAP applies (contingent remainder, executory interest, class gift, etc.)
- 2Determine the time of creation (date of conveyance for deeds; date of death for wills)
- 3Identify potential validating lives -- persons alive at the creation whose lives or deaths affect vesting
- 4Test whether there is ANY possible scenario in which the interest might vest more than 21 years after all lives in being have died
- 5If the interest might vest too remotely under any scenario, it is void ab initio under the common-law rule
Landmark Cases
Duke of Norfolk's Case
3 Ch. Cas. 1, 22 Eng. Rep. 931 (1682)
The foundational case establishing the Rule Against Perpetuities, recognizing the need to limit the duration of contingent future interests to prevent indefinite restraints on alienability.
Jee v. Audley
1 Cox 324, 29 Eng. Rep. 1186 (1787)
Introduced the 'fertile octogenarian' and 'unborn widow' scenarios, demonstrating the absurd but logically possible scenarios used to test RAP validity under the common-law approach.
Symphony Space, Inc. v. Pergola Properties, Inc.
88 N.Y.2d 466 (1996)
Applied the RAP to commercial options, holding that an option to purchase real property violated the Rule and was therefore void.
Lucas v. Hamm
56 Cal. 2d 583 (1961)
Held that an attorney's failure to comply with the RAP did not constitute malpractice because the Rule is so complex that even competent attorneys may err in its application.
Exam Tips
- Always start by classifying the interest -- if it is a grantor's interest (reversion, possibility of reverter, right of entry), the RAP does not apply.
- Use the 'what if' test: consider all possible scenarios, including absurd ones (fertile octogenarian, unborn widow, magic gravel pit), to test whether vesting might be delayed too long.
- For class gifts, apply the 'all or nothing' rule: if the interest of any potential class member might vest too remotely, the entire class gift fails.
- Check whether the jurisdiction follows the common-law RAP, USRAP (wait-and-see for 90 years), or cy pres reformation.
Common Mistakes to Avoid
- Applying the RAP to grantor's retained interests (possibility of reverter, right of entry, reversion) -- the RAP never applies to these.
- Failing to consider absurd but theoretically possible scenarios under the common-law 'what might happen' test, such as the fertile octogenarian or the slothful executor.
- Confusing 'vesting' with 'possession' -- the RAP requires that interests VEST within the period, not that they become possessory.
Memory Aid
RAP = Lives in Being + 21 years. 'Must vest, if at all.' Think: 'Can I find a validating life? If not, it is void.'