Class 13: Perpetuities, then Co-ownership

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Class 13 Perpetuities, then Co-ownership

• Property Law
• Fall 2006
• Professor Petherbridge

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Overview

• The Rule Against Perpetuities
• Co-ownership and Concurrent Interests

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RAP Reform

• Cy Pres (reformation)
• Wait and see
• Uniform Statutory Rule Against Perpetuities
  (USRAP)
• Use most favorable of
• RAP
• Wait and see if actual vesting occurs within some
  defined period of time

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Rule Against Perpetuities

• No interest is good unless it must vest, if at
  all, not later than twenty-one years after some
  life in being at the creation of the interest.

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Rule Against Perpetuities

• No interest is good unless it must vest, if at
  all, not later than twenty-one years after some
  life in being at the creation of the interest.

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No interest is good . . .

• Rule Against Perpetuities Applies to . . .
• Contingent Remainders
• Vested Remainders subject to open (to partial
  divestment i.e., class gifts)
• Executory Interests

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Rule Against Perpetuities

• No interest is good unless it must vest, if at
  all, not later than twenty-one years after some
  life in being at the creation of the interest.

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. . . must vest, if at all . . .

• Generally, to vest usually means to become
  possessory. An exception may lie when there are
  two consecutive contingent remainders.
• Contingent Remainders must vest or fail to vest
• Executory interests must become possessory
• Vested remainders subject to open must close (the
  class) or completely vest.

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Rule Against Perpetuities

• No interest is good unless it must vest, if at
  all, not later than twenty-one years after some
  life in being at the creation of the interest.

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. . . not later than twenty-one years after some
life in being at the creation of the interest.

• The future interest must VEST or FAIL TO VEST
  (usu. must become possessory), within a period
  calculated by adding twenty-one years to the end
  of the lives of the people alive (lives in
  being) at the creation of the interest.
• If the interest does not necessarily VEST or FAIL
  TO VEST within this period, the interest is VOID.
  
• Where the interest is VOID, it is eliminated from
  the conveyance.

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O conveys to Homer for life, then to Homers
first child to reach the age of 21 and his/her
heirs. Homer has three children, Bart 13, Lisa
11, and Maggie 2.

• State the Title
• H has a life estate Hs first child to reach the
  age of 21 has a contingent remainder in fee
  simple absolute O has a reversion.
• RAP?
• Apply to contingent remainder. Interest is
  VALID.
• Create, Kill, Count
• Create Homerson, an afterborn child who could
  take the interest.
• Kill, Homer, Bart, Lisa, and Maggie
• Count 21 years. Is it possible that Homersons
  interest could vest after 21 years?
• No.
• Homer is the validating life Homers death
  causes the vesting of the interest.

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Robert conveys to Colin for life, then to
Colins children for their lives, then to the
children of Lazarus then living. Lazarus has a
son aged 20 and a daughter aged 10.

• State the Title
• C has a life estate Cs children have a
  contingent remainder in life estate the children
  of Lazarus then living have a contingent
  remainder in fee simple absolute.
• RAP?
• First remainder, VALID
• Second remainder, VOID
• Create, Kill, Count
• X a child of C and Y a child of L
• Kill everyone
• Count 21 years. Is it possible that Ys interest
  could vest after 21 years?
• Yes. X could die after 21 years from when we
  killed everyone, in which case Ys interest would
  vest too late.

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Tammy testatrix devises to Alfred for life, then
to Alfreds grandchildren.

• State the Title
• Alfred has a life estate Alfreds grandchildren
  have a contingent remainder in fee simple
  absolute Ts estate has a reversion.
• RAP?
• VOID.
• Create, Kill, Count.
• X a child of A Y a child of X (an afterborn
  grandchild)
• Kill everyone
• Count 21 years. Is it possible that Ys interest
  could vest after 21 years?
• Yes. X could die after 21 years from when we
  killed everyone, in which case Ys class would be
  open until too late (i.e., X could have more
  grandchildren after 21 years).

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Co-ownership

• In this section, we will concern ourselves with
  three forms of concurrent interests
• The Tenancy in Common
• The Joint Tenancy
• The Tenancy by the Entirety

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Prob 1, page 278. O conveys Blackacre to A, B,
and C as joint tenants. Subsequently, A conveys
his interest to D. Then B dies intestate,
leaving H as an heir.

• What is the state of the title?
• After As conveyance, D is a tenant in common
  with B and C, who remain joint tenants.
• D has an undivided 1/3 interest as a tenant in
  common with B and C
• B and C are joint tenants of an undivided 2/3
  interest as joint tenants
• After Bs death?
• D has an undivided 1/3 interest as a tenant in
  common with C, and C owns an undivided 2/3
  interest as a tenant in common with D.
• What if B instead died leaving a will devising
  his interest to H?
• Will conveys no interest. In law, Bs interest
  dies (disappears) with B. Only the survivors
  interest (here C) remains.

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Tenancy in Common

• General Features
• Separate but undivided shares in the property
• Each owner has a distinct share
• Each owner has a right to possess the whole
  property
• The interest is transferable, devisable,
  inheritable
• E.g., O conveys Blackacre to A and B and their
  heirs.
• A and B are tenants in common in fee simple
  absolute.
• If A sells his share to C, then C and B are
  tenants in common.
• If B then dies intestate, leaving an heir, H. C
  and H are tenants in common.

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Joint Tenancy

• General features
• Primary feature is the right of survivorship
• Each owner owns a distinct share, but also owns
  an undivided whole
• Each owner has the right to possess the whole
  property
• The interest is transferable, (with consequences,
  but not devisable or inheritable)
• E.g., O conveys Blackacre to A and B and their
  heirs as joint tenants, not tenants in common.
• A and B are joint tenants in fee simple absolute.
  
• If B dies intestate, leaving an heir, H. A alone
  owns a fee simple absolute
• Alternatively, if B sells his share to C, then C
  and A become tenants in common.

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Tenancy by the Entirety

• General Features
• Like a Joint Tenancy, but between a H and W.
• Unlike a Joint Tenancy, cannot be severed except
  by divorce or agreement between H and W.
• Cannot be conveyed by either H or W except
  together by H and W.
• Neither can seek partition.

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Prob 2, page 278. T devises Blackacre to A and
B as joint tenants for their joint lives,
remainder to the survivor.

• State the Title?
• A and B have joint life estates the survivor has
  a contingent remainder in fee simple.
• Are A and B joint tenants or tenants in common?
• Tenants in common there is no right of
  survivorship the estate ends with the death of
  either A or B.
• In a joint tenancy, A or B could destroy the
  right of survivorship unilaterally, by conveying
  their interest to a third party. Here that
  cannot be done.

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Prob. 3, page 278. A and B are planning to be
married. Two weeks before the ceremony, they buy
a house taking title in A and B as tenants by
the entirety. Several years after the marriage,
A leaves, conveying his interest to his brother
C. C brings an action to partition. What
result?

• Did the conveyance create a tenancy by the
  entirety?
• No. Too early.
• Is the interest a joint tenancy or tenancy in
  common?
• Probably a JT, the use of tenants by entirety
  shows the intent to create a right of
  survivorship
• However, C will still be able to get partition.

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O conveys to A, B, and C as joint tenants with a
right of survivorship, and not as tenants in
common, but decrees that As share of the whole
is ½ while B and C each have ¼ shares. Is a
joint tenancy created?

• At common law, no. No unity of interest.
• Rule for this class Nowadays, a majority of
  jurisdictions will allow this at the creation of
  the interest. Everyone has the right of
  survivorship, but in the event of partition, the
  property is divided up according to the shares.

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END
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