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19 Cards in this Set

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What did RAP come into existance to deal with?
RAP came into existence to deal with indestructible EIs.
What is RAP?
Rule of Perpetuities
Special aspects of: RAP
The Rule: There is a rule against tying up your property too long. In other words, there’s RAP. || All society asks is that the interest being tested vests or fails to vest w/in a reasonable period of time. • RAP = A test of Vesting. • Rule against uncertainty • Rule against remoteness in vesting. • Rule against vesting that vests too far out in time. • If it must vest, then it must do so in a reasonable amount of time. Otherwise, it’s destroyed! • The rule hates contingencies. It hates uncertainty that lasts too long. • RAP is satisfied if you can show any kind of guarantee that the interest will vest or fail to vest w/in the period of the rule. - Any hypothetical vesting outside the period of the rule means the interest is destroyed. - Sometimes the doctrine of destructibility will provide that certainty
Define: RAP
No interest is good unless it must vest, or fail to vest, not later than 21 years after some life, or lives, in being or in gestation at the creation of the interest.
Only what 3 Fis are tested by RAP?
1. VRSTO 2. C/R 3. EI
Steps to Applying RAP
• CLASSIFY all the interests w/o thinking about RAP. - Are any of them VRSTO, C/R, or EI? Yes → Test w/ RAP; Only the potentially offensive interests have to be tested. No → then you don’t have to apply RAP. • TEST the contingent interest AT THE TIME OF CREATION as a potential perpetuity. • The interest being tested must become a vested estate – vested either in interest or vested in possession – w/in a reasonable period of time.
Rules of RAP [7]
• Person can live to any age. • Person can die at any age. • Person can marry at any age. • Woman can give birth at any age. • Child conceived is a life in being. • Events that usually take a short time can take forever (except pregnancies). • Interests must be good at the time of creation.
What does VESTING mean? [RAP]
• Vested means it must have changed from a bad FI to a good FI, e.g. VRSTO to IVR. • Contingent interests must vest or fail to vest w/in a reasonable period.
What is a REASONABLE PERIOD for VESTING?
• Reasonable Period? - A period of years of a life or lives in being plus 21 years, includes lives in wombs.
What happens when the RAP interest was created INTESTATE at the Time of Creation?
• If the interest is created intestate, i.e. interest is created by will, the time of creation is when the testator dies.
What happens when the RAP interest was created INTER VIVOS at the Time of Creation?
• If the interest is created inter vivos, the time of creation is when the creator was alive.
Define: PROPONENT [RAP]
Proponent – one claiming that the interest is good, seeks to prove that the interest will vest or fail to vest W/IN the period of the rule. If she succeeds, then the interest is good.
Define: OPPONENT [RAP]
Opponent – one who seeks to show that the interest might vest or fail to vest outside the reasonable period.
Only which lives matter for VESTING in RAP?
Only lives that matter are those which are connected to the vesting - those lives in the instrument or in the world of the instrument.
How do LIVES IN BEING affect the RAP?
• The common law rule requires a guarantee. - If there is the slightest chance the interest won’t vest or fail to vest w/in the period of the rule, then it is destroyed. - The proponent, person claiming the interest is good, the kid in the car, can offer any life as tentative proof that the interest is good. || A’s life saves the C/R, when A dies, this C/R will vest. - The opponent can kill the offered life. || Let’s kill A right now and see if that causes the C/R to vest or fail to vest. - To save the interest, must be able to show that A’s death saves the interest by causing the interest to vest or fail to vest.
Handy Hints for Classification of Interests
• Warnings that you’re looking an interests that must be tested → CRs and EIs - Interests in unborn persons - Contingencies before an interest in a known person will vest - Persons required to survive to a future date in order to take || • Warning signs the interest you’re testing may be bad . . . - Gifts to members of a class at an age beyond 21 - A gift to settlor’s grandchildren in an inter vivos transfer - Gifts to someone else’s grandchildren in a will, when that someone else is living
Why do we use Measuring Lives in RAP?
Measuring Lives ||||| • We’re seeking to prove the interest is no good by showing that there’s no measuring life or measuring lives to save the interest. • A life (or lives) saves the interest if the death of the person causes the interest to vest or fail to vest w/in the period of the rule. • Killing everyone in the world is a way of demonstrating that there is no life or lives in being that will cause the interest to vest or fail to vest w/in the period of the rule. • Interests that don’t vest or fail to vest w/in the period of the rule must be destroyed.
Measuring Lives ≠ ? = ?
Measuring Lives ≠ Animal Lives = Human Lives
What does an OPEN and a CLOSED set of lives do for an INTEREST?
A Closed Class of Lives May or May Not Save an Interest, But a Open Class of Lives Can Never Saves an Interest