Friday, November 13, 2009

Real Property: Future Interests

Question:

Can you please explain the following problem for me, relating to future interests. I have the answer but don't understand it.

'Captain Bligh owns Pitcairn in fee simple absolute. He conveys it 'to Fletcher Christian and his heirs, as long as the property is used as a resort; then, if Alexander Smith is still alive, to Alexander Smith and his heirs.' After the conveyance, what is Alexander Smith's interest in Pitcairn?

Answer: An executory interest, even though it becomes possessory at the natural termination of the prior estate (Fletcher Christian's fee simple determinable), which is the hallmark of a remainder interest. Why? Because a remainder cannot follow a fee simple interest. Thus, if Christian's interest had been a life estate determinable, Smith would have a remainder because a remainder can follow a life estate determinable.

My question to you - I thought that Smith's interest would have been void via RAP, because it seemed like Smith's interest may vest or fail further in the future than a life in being plus 21. What in the facts indicates that Smith's interest had to vest or fail in his lifetime?

Response:

In questions involving the Rule Against Perpetuities, it's important to first determine the measuring lives. The measuring lives consist of any lives in being at the creation of the interest. According to the rule, no interest in property is valid unless it must vest, if at all, within 21 years after some life in being at the creation of the interest.

In this fact pattern, Alexander Smith himself is a measuring life because he is alive at the time that the interest in land is created. The pattern specifies that he has to be alive in order for his interest to vest, so that interest will vest, if at all, within 21 years of a life in being at the creation of the interest (i.e., the interest will vest, if at all, within 21 years of his own life, because he has to be alive for the interest to vest.)