Thursday, June 2, 2011

The Rule Against Perpetuities: 3 Steps to Defeat the RAP on the BAR

If a Rule against Perpetuities (RAP) question comes up on the MBE, you can use a quick 3 step process to quickly reach the right answer.  

Step 1: Write Down the Future Interest (FI) resulting from conveyance + determine “Condition Precedent”

Step 2: Circle the “Measuring Man” (MM);

Step 3: Ask yourself: within 21 years of the death of MM, will we know who takes?

Here is an example: 

For Tom’s 75th birthday, his wealthier friend Jerry wants to do something special for him.  Tom has one 27 year old son.  Both are in relatively good health.

Jerry conveys to Tom for life, then to the first of Tom’s children to reach age 33.

Step 1: You should recognize this as a Contingent Remainder.  The future interest involved is contingent – meaning it may occur – but only if Tom dies AND if he has no child who is 33 at that time.    

Step 2: Tom Is the “Measuring Man.”  Tom’s life determines whether the “contingency” takes place, so to speak.

Step 3: Tom could die tomorrow; his son could die tomorrow; his son could die tomorrow and the next day Tom could get a woman pregnant.  Think of all of the possibilities.

The Answer: Tom would have his life estate, and Jerry would have a reversion.  

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