2 NO INTEREST IS GOOD UNLESS IT MUST VEST, IF AT ALL, NOT LATER THAN 21 YEARS AFTER SOME LIFE IN BEING AT THE CREATION OF THE INTEREST-John Chipman Gray
3 If, at the creation of a nonvested interest, there is some life in being within 21 years of whose death the nonvested interest must absolutely vest or fail, the nonvested interest is good (valid).If there is no such individual, the interest is bad (invalid) Sheldon F. Kurtz
34 T wills property to A for life, then to B if anyone returns from Rome Scenario 1: At the time of T’s death, someone had already returned from RomeScenario 2: At T’s death, no one has yet returned from Rome. However, two weeks later C returns from Rome
35 Problems PagesTo A for life, then to B for life if any person goes to SaturnTo A for life, then to A’s first child to pass the barWhat does the phrase “first child” mean?OptionsFirst child born to A and then only if he/she passes the barFirst child of A whenever born who passes the bar
41 Fertile OctogenarianT devises property to Trustee to pay income to A for life, then to A’s children for their lives, then to A’s grandchildren who are then livingScenario 1: At T’s death, A is living. A is age 80.Scenario 2: At T’s death, A is incapable of having children.Scenario 3: At T’s death, A’s children but not A are living
44 Precocious ToddlerT by will to A for life, remainder to such of A’s grandchildren who survive T or are born within 5 years of T’s death if they later reach the age of 25.Survived by child A but no children or grandchildren of ASurvived by child A and 2 grandchildren and 3 children of ASurvived by 2 grandchildren of A but not by A or any children of A
45 The Unborn Widow See, Dickerson v. Union National Bank of Little Rock
46 T devises property in trust to pay the income to Son for life, then to Son’s widow for her life, then to S’s then surviving issue. At T’s death:Son and his wife, Jane survive T.Is gift to issue good or bad under the rule?Could T’s will have been interpreted in such a way that it does not violate the Rule?If T’s will violates the rule, how might it have been drafted initially to be valid?
50 Gift to vest (by express words in instrument) on one of two events One event could occur beyond permissible period (first event)One event can only occur within permissible period (2nd event)Gift VALID if second event is the one that ACTUALLY occursGift VOID if first event is the one that ACTUALLY occurs
51 T devises property in trust to pay income to daughter A for life, then to A’s widower for his life, then, upon the death of the widower, OR upon the death of A, if no spouse of A survives A, to A’s surviving issue
52 The All of Nothing Rule (Limited to -Class Gifts)
53 If a gift is bad as to one member of a class, it is bad as to all, including those members of the class whose interest would timely vest or fail.
54 For a class gift to be valid under the Rule within the permissible period: the class must closeand all conditions precedent must have to occur for EACH AND EVERY member of the class
55 T wills property to A for life, then to such of A’s children as attain age 25. At T’s death #1: A has three children, all of whom are age 25.#2: A has three children, one of whom is age 25#3: A has three children, all of whom are under age 25
56 T wills property to A for life, then to A’s grandchildren At T’s death, A has:A has no grandchildrenA has one living grandchild
57 O deeds property to O’s daughter, A, for life, remainder to O’s grandchildren. At the time of the conveyance, O has:No living grandchildOne living grandchild
58 O deeds property to O for life, then to O’s grandchildren O deeds property to O for life, then to O’s grandchildren. At the time of the conveyance:O has three living grandchildren and two living children.O has no living grandchildren and two living children.O has no living grandchildren or children.
59 Ward v. Van der Loeff What are the facts of this case? Is the gift in the will valid?Is the gift in the codicil valid?
62 THE SUBCLASS EXCEPTION American Security & Trust Co. v. Cramer T wills property to A for life, then to B for life, then to B’s surviving children for life, then upon the death of each child of B, the percentage share of the principal from which the child was receiving income shall be distributed to his/her surviving issue. At T’s death A, B and two children of B--C and D are living. Five years later, B has two more children--E and FIs the gift to A valid?Is the gift to B valid?Is the gift to B’s children valid?Is the gift to issue of B’s children valid?
64 When period begins to run: General inter vivos powerGeneral testamentary powersSpecial (non-general) powers
65 Is power validly created: Is it possible for power to be exercised by a person who was not a life in being and beyond the perpetuity period
66 Is power validly exercised: Second look doctrineRewrite appointment back into instrument creating powerConsider facts relating to survivorship at time of exercise.
67 T’s will: T wills property to A for life, remainder to such of A’s issue as A appoints by will, if no appointment to A’s grandchildren who attain age 21.Appointment by A: “to child (grandchild of T) B for life, then to B’s surviving issue”Rewrite of T’s will: T wills property to “A for life, remainder to B for life, remainder to B’s surviving issue.”B was alive at T’s deathB was born after T died
68 O conveys property to A for life, s/p/a/ issue as A appoints by will, ida to A’s children for life (grandchildren of O), then to A’s grandchildren (great-grandchildren of O). A dies and does not exercise the power.At A’s death:Grandchild B is living. B was also alive when O created the trustGrandchild B is living but was born after the date O created the trustGrandchildren B, C and D are living:All were alive at the time of the conveyanceAll were born after the time of the conveyanceB and C were alive at the time of the conveyance; D was born after the conveyance
69 Savings ClausesNotwithstanding the foregoing any trust created hereunder shall terminate, if it has not terminated sooner, no later than:21 years after the death of the survivors of all of my issue living at the (time of my death) (date the trust created)21 years after the death of the survivors of all of my grandparents’ issue living at the (time of my death) (date the trust created)21 years after the death of the survivors of all of the descendants of Queen Victoria (or Joseph P. Kennedy) living at the (time of my death) (date the trust created)
70 Wait-and-SeeA gift is valid under the rule if it actually vests or fails to vest no later than 21 years after the death of the survivor of lives in being living at the creation of the nonvested interest.
71 T wills property to A for life, then to A’s children who reach age 25. T wills property to the first child of A who graduates law schoolO wills property to O’s first grandchild who graduates from law school
72 T wills property to the X Church so long as the premises are used for church purposes and if not so used, then to B.120 years after X Church ceases using the premises for church purposes B’s estate claims the property.Should B’s estate prevail if B is then livingShould B’s estate prevail if it can show that Z is living (or died within the preceding 21 year period but Z was alive at the time of T’s death
74 T wills property to A for life, then to A’s children who attain age 25. At A’s death, A’s youngest child is age 18At A’s death, A’s youngest child is age 3At A’s death, A’s youngest child is age 1At A’s death, A has no child under age 25
76 States common law ruleAdopts wait-and-see (Statutory List of Livescreatorpersons selected by creatorliving beneficiaries of present and future interestsliving grandparents of such beneficiariesliving issue of such grandparentsliving grandparents and their issue who are objects of special powerdonee of special and general powersCy pres
77 Charitable Trusts Trust for benefit of recognized existing charity Trust for a charitable purpose which include:Relief of povertyAdvancement of educationAdvancement of religionPromotion of healthGovernmental or municipal servicesOther purposes the accomplishment of which is beneficial to the communityCan last in perpetuityThe Cy Pres Doctrine