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Tuesday, August 14, 2007

Mary Bilder on Teaching Rule Against Perpetuities

In the spirit of propertyprof's effort to help with the teaching of property, I asked Mary Sarah Bilder (who is a non-blogger and is also, by the way, author of this terrific book), if she would quickly write up her outline for her one-hour class on the rule against perpetuities.  She uses Dukeminier.

I think it is useful to teach RAP as a way to explain that Anglo-American law has attempted to put some limits on dynastic wealth and to emphasize how words matter in legal drafting. Here is one way to teach the RAP in 60 minutes at a first-year property level. My apologies and thanks to the many secondary sources from which this approach has been drawn (including, in particular, the wonderfully useful Mark Reutlinger, Wills, Trusts, and Estates.)  This approach may not have every member of the class able to work out every RAP problem, but they will get the idea and get the type of basic problems that they might actually by mistake draft into a document. (It also will mean that people are a bit cautious before they blithely agree to write wills for friends and family in later life.)

The class has 5 parts

1. Big Picture
2. The Rule
3. How to Apply it
4. Patterns
5. Reform

1. Big Picture: Explain the Duke of Norfolk's Case: You can tie up your property through the lifetime of people you know and the minority of the next generation. Briefly discuss pros/cons.

2. Give Rule (Gray version): go over interests created, future interests to which the rule applies (you need to have explained these well in a prior class and have done an equally good job with the concept of vesting), what to do if an interest violates rule.

3. How to Apply it: Explain that it is a rule against remoteness of vesting; that the hard part to understand is the part about "or fail"; explain that what one is looking for are interests that might vest after the period (give a couple examples -- I often use the idea of a one-episode reality show -- some will make it; some won't but you'll know by the end vs. the soap opera); explain that one does this by searching for the validating life (or alternatively a nonvalidating life); explain that it will always be a likely suspect--someone who affects the contingency (b/c everyone else can die); explain that a good trick is to always try and kill off everyone alive at the time of the conveyance; explain to always beware vested remainders (b/c RAP doesn't apply to them and so they are valid!).

    I have my students do the following steps:

    1. Classify all interests

    2.  Which ones are subject to RAP?

    3.  ASK: When will the cont. rem., etc. vest? (-what event is necessary for it to vest?)

    4.  Is there a validating life--look for some connection between the necessary event and the person + 21 years OR prove it could vest after

    5.  If no validating life, then interest is bad--cross it out and relabel the interests

4. Patterns -- basically all the RAP problems that I think a first-year student needs to understand fall into one of three patterns:  (You should have a couple examples for each pattern and work over it in class.)

    1. The problem of remote vesting (these are the executory limitations problems with state charity-to-charity exceptions)

    2. Taker of the interest is the VL for herself -- these are the patterns where the taker is VL, group of takers are VL, people who affect the contingency are the VL, savings clauses

    3. Afterborn people problems -- these all involve the trick of the problem using a class word (child, spouse, widow, grandchild) and that person might be an afterborn: child at 25 and grandchild in will vs. deed are good problems.

5.  Reform: Explain state reforms (which all make a lot more sense if you have some grasp of the Rule) and then end with some discussion on the dynastic trust situation because lawyers can learn complicated ways in which to keep dynastic wealth together over generations but apparently can't learn the RAP

Al Brophy
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