Chapter 4a: Perpetuities GO THROUGH THESE STEPS IF POSSIBLE PERPETUITY PROBLEM (1) Who’s getting what? (2) Are there any conditions or limitations? Is it vested? Future interest: It’s a current present interest to future possession of property. There’s two kinds: Vested future interest: presently-held rights to future possession (such as remainders and reversions). They are property. A future vested interest is (a) created in a living, ascertainable person and not subject to any condition precedent the natural termination (b) except of the prior (life) estate. the interests and the possession vest in the future. Contingent future interest: Subject to legal conditions, they may be property Condition precedent (interest is a remainders): Orville if s/he turns “To 30 years of age”. Becomes vested in Orville when contingency occurs. Condition subsequent (creates rights of entry): Orscilla, (or but if “To she ceases to use the property for to” or condition that”) “subject “on educational purposes (which is a condition subsequent for Orcilla), then creates a right of entry for Bloggs” When condition subsequent occurs, the interest does not vest automatically in Bloggs; it must claim be claimed. Determinable interests (creates rights of reverter): Orville (or while “To long as”, you are married to Orscilla, when you are not, to “so “during”) Snooks” (3) Is the reminder valid? All the requirements below must be stated in the exam, even if briefly, when assessing the validity of a trust. religion.) Is it certain? (example Is there a restraint on alienation? See Rights legislation on prohibited discriminations Does it violate public policy? such as race, gender sexual orientation etc. or conditions that dictate celibacy) Does it violate the rule against perpetuities? Common-law formulation: one must be able to say (a) with absolute certainty at the outset of the trust that under its terms the vesting of equitable interests if they are to occur will do so (b) within lives in being at the time of the creation of
Chapter 4a: Perpetuities GO THROUGH THESE STEPS IF POSSIBLE PERPETUITY PROBLEM (1) Who’s getting what? (2) Are there any conditions or limitations? Is it vested? Future interest: It’s a current present interest to future possession of property. There’s two kinds: Vested future interest: presently-held rights to future possession (such as remainders and reversions). They are property. A future vested interest is (a) created in a living, ascertainable person and (b) not subject to any condition precedent except the natural termination of the prior (life) estate. Contingent future interest: the interests and the possession vest in the future. Subject to legal conditions, they may be property Condition precedent (interest is a remainders): “To Orville if s/he turns 30 years of age”. Becomes vested in Orville when contingency occurs. Condition subsequent (creates rights of entry): “To Orscilla, but if (or “subject to” or “on condition that”) she ceases to use the property for educational purposes (which is a condition subsequent for Orcilla), then creates a right of entry for Bloggs” When condition subsequent occurs, the interest does not vest automatically in Bloggs; it must claim be claimed. Determinable interests (creates rights of reverter): “To Orville while (or “so long as”, “during”) you are married to Orscilla, when you are not, to Snooks” (3) Is the reminder valid? All the requirements below must be stated in the exam, even if briefly, when assessing the validity of a trust. Is it certain? (example religion.) Is there a restraint on alienation? Does it violate public policy? See Rights legislation on prohibited discriminations such as race, gender sexual orientation etc. or conditions that dictate celibacy) Does it violate the rule against perpetuities? Common-law formulation: one must be able to say (a) with absolute certainty at the outset of the trust that under its terms the vesting of equitable interests if they are to occur will do so (b) within lives in being at the time of the creation of
Pavlich_Law_250_-_Trusts_Fall_2012_Silvana_Lovera.docx