Property
Class Notes
More practice problems on
the rules furthering marketability
5.
“‘Orville to Arvid for life, then to his
widow, and then to his children who survive her.’ Assume that Arvid
is 89 and is married to Bella, his wife of 65 years [that’s a long time!], and
that they have three children”: First off, purportedly, Arvid
has a life estate, his widow has a contingent remainder for life (because it is
unascertained just who his widow will be or whether he’ll have one, like if he
gets divorced) and then a contingent remainder in fee simple absolute to his
children who survive whatever widow he leaves behind (they may or may not be
ascertained). Here we have the “unborn
widow” problem at common law. Let’s say
Bella and all the children die, but Arvid remarries,
say to Cruella, who wasn’t born at the time of the
gift. Arvid
works as the validating life for the gift to Cruella. Arvid and Cruella (miraculously) have a kid, Donatello. Then Arvid dies
(and thus both his widow and his children are ascertained at his death). It may be more than 21 years before we know
whether Donatello will survive Cruella. Therefore, strangely enough, the gift to Cruella (or Bella or any other potential widow) will be
okay, but the gift to Arvid’s children fails and thus
Orville keeps a reversion in fee simple absolute. Note that the children in being at the time
of the gift don’t work as validating lives for anybody, either. There is no life in being that will make this
gift valid. Note that this gift would
succeed if all the recipients of the gift were named. Actually, all you would need to do is name the widow. So, in the end, Arvid
has a life estate, the children have a contingent remainder in fee simple
absolute, and Orville has a reversion.
6.
“Orville to Amanda for life, then to Amanda’s children who survive
her”: Purportedly, Amanda gets a life estate, and Amanda’s children get a
contingent remainder in fee simple absolute (because they not only might not be
unascertained, but also they need to survive her) and Orville will have a reversion. Now this gift seems okay, because if we use
Amanda as the life in being, we will know exact which children have survived
her at the time of her death. I think
both gifts are okay.
7.
“Orville to Abby for life, then to her children who reach the age of 30”:
Abby purportedly has a life estate, Abby’s children have a contingent remainder
in fee simple absolute, and Orville has a reversion in fee simple absolute. Here we have a problem with the gift to the
children. Abby could have a kid after
the date of the gift, then she could croak. Then it would be, by definition, more than 21
years before we would know whether that child was going to reach the age of
30. However, if the rule of
destructibility is still in effect, the gift would be okay because we would
know at the time of Abby’s death whether the remaindermen
are ready to take. The remainder will either vest in Abby’s children if they are 30 already, or else it will be destroyed and go back to Orville
by reversion. So Abby has a life estate,
Abby’s children have a contingent remainder in fee simple absolute, and Orville
has a reversion in fee simple absolute.
8.
“Orville to Andre for life, then to Andre’s heirs”: Here’s a classic Rule in Shelley’s Case
problem. Purportedly, Andre gets a life
estate, and Andre’s heirs get a contingent remainder in fee simple absolute
(because they are unascertained at the date of the gift). Orville also has a reversion in fee simple
absolute, though it may be somewhat of a fiction. However, under the Rule, if it is still
applicable, Andre will simply get a fee simple absolute. We have (1) one instrument, (2) a freehold
estate in the ancestor, (3) a purported contingent remainder in the ancestor’s “heirs”,
and (4) the two estates are of the same “quality” (both legal). There is no Rule Against
Perpetuities problem, though, because Andre’s heirs would be ascertained at
Andre’s death, even in the absence of the Rule in Shelley’s Case.
9.
“Orville to Alan for life, then to Orville’s heirs”: Here’s the
Doctrine of Worthier Title problem [only
when this is an inter vivos gift]. Purportedly, there is a life estate in Alan,
followed by a contingent remainder in fee simple absolute to Orville’s heirs,
and a reversion in Orville (again, mostly fictional, but must be there because
he gave away a vested estate of a lesser quantum than what he had). But under the Doctrine of Worthier Title, the
remainder to Orville’s heirs becomes simply a reversion in Orville. So the gift would be the same as if you
simply said: “Orville to Alan for life.”
The contingent remainder in the heirs is wiped out!
10. “Orville to Alain for life,
then to Orville and his heirs”: This kind of seems like a fancy way of saying “Orville
to Alain for life”, giving Alain a life estate with a reversion in fee simple
absolute that is implicitly suggested by the gift. I don’t think this runs into the Doctrine of
Worthier Title problem. Instead, I think
we just read it as “To Alain for life.”
How is this different from the previous problem? It says “to Orville and his heirs” and not
just “to Orville’s heirs”.
11. “‘Orville to Alana and her
heirs so long as the land is used for charitable
purposes.’ Subsequent to this
conveyance, Orville conveys his property ‘to Binford and his heirs’”: Initially,
and purportedly, Alana has a fee simple determinable and Orville has the possibility
of reverter. Then Orville sells what he
has to Binford. It is quite uncertain
whether the possibility of reverter can be sold or not (in other words, whether
it’s alienable). If it can’t be, then things they as they are
and no rules are violated. If it is
sold, “the name stays the same” and Binford has the possibility of reverter. Is the possibility of reverter valid? Sure, because it’s vested right from the
start and forever. The thing is, if
these two conveyances were made in the same gift, then Alana would have had a fee
simple determinable, also known as a fee simple subject to an executory
limitation, and Binford would have had an executory interest. However, that executory interest would have been
killed by the Rule Against Perpetuities, because that interest
could stay contingent way, way, way into the future and far beyond the deaths
of both Alana and Binford. You never
know how long the land will be used for charitable purposes! It could be hundreds of years!
Pretty
much all Rule Against Perpetuities problems seem to
arise from gifts where the recipients aren’t named.
It
was considered dangerous to have alienable possibilities of reverter! If you could sell the possibility of reverter,
then you could pretty much get around the Rule Against
Perpetuities.
The
Rule Against Perpetuities doesn’t operate on reversionary
interests! This includes reversions, possibilities
of reverter, and rights of entry.
There
is a special exception for successive charitable uses. If you do, they are exempt from the Rule Against Perpetuities.
“Contingent or executory interests to charities fall within the rule
unless it is a charity on a charity.”
There
is some recommended reading. For
example: 51 Harv. L. Rev. 638: Perpetuities in a
Nutshell! There are also 74
Judicial reform
There’s
lot of stuff that goes under this heading, but is it really reform? Braunstein would just abolish future interests. One reason that they don’t get abolished is
that every generation of law students has gone through the process of learning
them and that future law students better do it too because it’s kind of like
hazing.
Only
Anglo-American law recognizes these future interests! Continental Europe doesn’t recognize
them.
The
modern view has been to move in the other direction, keeping these future
interests valid for longer periods
than these rules would allow. The rule of destructibility, the Rule in Shelley’s Case, and the Doctrine
of Worthier Title have been abolished in most places.
The
reform of the Rule Against Perpetuities hasn’t done a
whole heck of a lot. You still need to
know the Rule to work with the reform.
For example, the Uniform Statutory Rule Against
Perpetuities allows future interests to be valid if they would either vest or
terminate within 90 years after its creation.
Then
you have “wait and see”. First you apply
the common law Rule. Then, if an interest
might violate the Rule Against Perpetuities, then you must identify why it violates the Rule, and finally
identify the events that you’re waiting for.
Then you wait around to see what really happens. After you sit and wait, if the Rule Against Perpetuities is violated, you try to reform the interest to best carry out
the grantor’s intent.
The
point is that with all these rules, we’re extending
contingent interests, reforming the Rule Against
Perpetuities by making it less potent, but we’re doing nothing to make the Rule Against Perpetuities simpler.