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Machine Elf
04-09-2012, 09:41 AM
I watched The Descendants (http://en.wikipedia.org/wiki/The_Descendants) this weekend. Great movie, enjoyed it, but I was a bit puzzled by one aspect.

A key plot point revolves around the rule against perpetuities: (http://en.wikipedia.org/wiki/Rule_against_perpetuities) Clooney's character and his many cousins are heirs to a large patch of land in Hawaii that has been passed down through the family for something like 100 years. Because of the RAP, they will be required to sell the land sometime in the next seven years.

After studying the Wikipedia page on the RAP, my head is spinning. Can someone with a legal background explain what circumstances might require the land in this situation to actually be sold? Why would Clooney's character and his many cousins not legally be allowed to maintain ownership of the land?

friedo
04-09-2012, 09:45 AM
It's not exactly that the land has to be sold, but that the trust which owns the land has to be dissolved after a given amount of time. The only sensible way to do that would be to sell the land and divide the money amongst the heirs.

naita
04-09-2012, 09:53 AM
I watched The Descendants (http://en.wikipedia.org/wiki/The_Descendants) this weekend. Great movie, enjoyed it, but I was a bit puzzled by one aspect.

A key plot point revolves around the rule against perpetuities: (http://en.wikipedia.org/wiki/Rule_against_perpetuities) Clooney's character and his many cousins are heirs to a large patch of land in Hawaii that has been passed down through the family for something like 100 years. Because of the RAP, they will be required to sell the land sometime in the next seven years.

That's not what the wikipedia-description of the film says.

The trust will expire in seven years because of the rule against perpetuities, so the King family has decided to sell the land to Kaua'i native Don Holitzer for development.

Seems to me the rule against perpetuities here is just what frees the land up for sale after it has been locked in trust for the family.

md2000
04-09-2012, 10:02 AM
IANAL but - I remember reading about will once, and the rule basically said something like "there has to be a fixed and guaranteed time/event when this trust ends" a time that can be guaranteed when the trust started.

So you can't have a rule like "when there are no more male heirs of the line" or "when no direct descendants want to live in the hosue" because that could happen a hundred generations from now. You can't have a rule like "when John's oldest grandchild dies" because if John has no grandchildren, or he could have grandchildren that come along after the trust was set up, etc. - there's no guarantee that an event can or will actually happen.

The only way to really test what is a fixed time, is to state your scenario ("When Suzy finishes college", or "when James gets married", or "When Fred turns 25" ) and see if this is guaranteed to happen within a fixed amount of time.

You can have a rule like "when the last of the current children dies", because all these children exist at the beginning of the trust, so the only timing issue is waiting for all of them to die; that has to happen in a fixed time.

Along with that, some jurisdictions required that such situations, have a maximum of 100 years or some other fixed alternative time-line. More than 100 years is considered "forever" since anyone with any memory of the situation will likely be dead. So a trust cannot run more than 100 years because it cannot run "forever". I assume this is the clause that kicks in for the movie, "...or 99 years, whichever happens first."

brazil84
04-09-2012, 10:03 AM
After studying the Wikipedia page on the RAP, my head is spinning. Can someone with a legal background explain what circumstances might require the land in this situation to actually be sold? Why would Clooney's character and his many cousins not legally be allowed to maintain ownership of the land?

Agree with naita - the RvP doesn't require anything to be sold. The point of the RvP is to prevent too much "dead hand control," i.e. to stop people from preventing land from being sold.

md2000
04-09-2012, 10:20 AM
Perhaps the situation is that the will stipulated "the land to be sold and proceeds distributed (evenly?) among surviving descendants"? Unless it goes to one person, there is usually a legal principle that can force sale and distribution of proceeds if one of the owners chooses, too. Plus, if there is inheritance tax, usually the sale is necessary to cover that cost?

Really Not All That Bright
04-09-2012, 10:30 AM
Law student here- and one who is just about to finish property law. For the record, most states have abolished the traditional RAP. In order to understand it fully, you have to understand how future interests work, and there's really no reason you should.

However, the rule does not force the sale of land, ever. What it does is prevent a present owner from preventing the sale of land for what amounts to 21 years beyond the death of people who are alive at the same time as him and stand to inherit an interest in the land. It's a bit more complicated than that, but most of the time that's how it works out. If a conveyance is invalidated by the rule, you can't make it valid by selling within 21 years; the conveyance has to meet the rule at the time it comes into effect or it's invalid, period.

I suspect what's going on in The Descendants has nothing to do with the rule against perpetuities. It has to do with an essentially unrelated feature of property law: eminent domain. Most privately held land in Hawaii is owned by a very few private landowners, so the state legislature has been working since about 1960 to force the sale of portions of it using their eminent domain powers. Some of the background is discussed in Hawaii Housing Authority v. Midkiff (http://supreme.justia.com/cases/federal/us/467/229/case.html), a SCOTUS decision upholding the constitutionality of certain provisions of the Act.

ETA: Never mind. The trust itself was structured to comply with the RAP. (http://blogs.wsj.com/speakeasy/2011/11/26/the-descendants-aims-to-lay-down-the-law-in-hawaii/) They still aren't "forced to sell", though.

EETA: ninja'd by md2000.

Derleth
04-09-2012, 10:45 AM
A corollary to the Rule Against Perpetuities (which Firefox wants to spell-check to 'Perplexities') is that if any 80-year-old bears a child, every practicing attorney is free to shoot spitwads at her.

md2000
04-09-2012, 11:37 AM
A corollary to the Rule Against Perpetuities (which Firefox wants to spell-check to 'Perplexities') is that if any 80-year-old bears a child, every practicing attorney is free to shoot spitwads at her.

But if you are Larry King, you can pay someone to swat them away... So guys, at least, can always mess up these sorts of rules.

Of course, with frozen sperm and frozen eggs, and hormones and IVF of postmenopausal women, presumably there is a remarkable windfall waiting for lawyers soon...

I assume that a child "conceived" or whatever well after the will has been executed and the estate paid out, is simply out of luck? (I wonder how that works for British titles?) I assume it's not much different from a person who discovers their paternity well after the estate is settled; I assume this is pretty much settled law?

Regardless, for the OP situation of perpetuities, I gather the person(s) must be at least a bun in the oven and on the way for them to count as the class that extinguishes the trust.

Really Not All That Bright
04-09-2012, 11:49 AM
I assume that a child "conceived" or whatever well after the will has been executed and the estate paid out, is simply out of luck? (I wonder how that works for British titles?) I assume it's not much different from a person who discovers their paternity well after the estate is settled; I assume this is pretty much settled law?
The RAP only applies to real property, but yes, "classes" specified in a conveyance generally close once the relevant transfer takes effect.

If you will your house to your grandchildren, only those born at the time of your death inherit.

On the other hand, if you will it to your child and his heirs, the class remains open until your child dies (and of course it is unlikely though not impossible that he will have any additional kids after he dies).

md2000
04-09-2012, 12:17 PM
One of the examples in the link says "a long as Fred does not sell liquor on this property" rather that "nobody sells liquor on this property" as a condition.The picky part of me thinks - "Oh, Fred can just subcontract the sale of liquor, as long as he does not own the store."

I assume this was an off-hand example and a real such rule would have much more precise wording? Or would the court actually take the spirit of the prohibition to heart?

jbaker
04-09-2012, 12:23 PM
I really don't like it when movies casually use a legal rule like the rule against perpetuities, but don't explain how it comes into play. I believe Body Heat did the same thing. In both cases, a couple of sentences could have clarified why it was an issue.

The rule against perpetuities is a famously complicated rule of property law. Many states have now changed its application, but the trust referred to in The Descendants would have been structured to comply with its original form. Essentially, the rule against perpetuities requires that, in order to be valid, an interest must vest within lives in being plus 21 years. A noncharitable trust is not a vested interest, so the rule sets a time limit on the duration that property can be held in trust: lives in being plus 21 years.

So, for example, the settlor could have established the trust in her will and provided that the property was to be held in trust for her descendants for such period of time as the trustees may determine, but in any case not longer than 21 years after the death of her child who is last to die of her children. Presumably the trust did have some such term, even though we don't know the details.

Note that, if the settlor established the trust while she were still alive, rather than in her will, then the term just stated would not have worked, because she could have had a child after establishing the trust. The law assumes this to be the case, even if she were in her eighties (a "fertile octogenarian") when the trust was established. Nice points such as this are why the rule is justly renowned for its unexpected complexities. The trust would have needed some other measurement, such as "21 years after the last to die of the currently living descendants of Queen Victoria."

Really Not All That Bright
04-09-2012, 12:27 PM
One of the examples in the link says "a long as Fred does not sell liquor on this property" rather that "nobody sells liquor on this property" as a condition.The picky part of me thinks - "Oh, Fred can just subcontract the sale of liquor, as long as he does not own the store."

I assume this was an off-hand example and a real such rule would have much more precise wording? Or would the court actually take the spirit of the prohibition to heart?
It's an example from Bar Exam Hypothetical World. In real life, it would be much better drafted (most of the time).

barbitu8
04-09-2012, 03:54 PM
The common law rule against perpetuities is that no interest in property is good unless it must vest, if at all, not later than 21 years, plus period of gestation, after some life or lives in being at time of creation of interest.

The gestation period is approximately 9 months. Sperms or ovae in vivo are not "lives in being" and it is the "period of gestation" not the actual gestation, but such cells would not be in gestation anyway.

Machine Elf
04-09-2012, 04:01 PM
Essentially, the rule against perpetuities requires that, in order to be valid, an interest must vest within lives in being plus 21 years.

I'm not a lawyer, so help me out:

-what is an "interest" in this context?
-what does "vest" mean in this context?

barbitu8
04-09-2012, 04:19 PM
Interest means any interest in the property, such as fee simple, life estate, lease, etc. Vest means that this interest is no longer contingent upon anything happening. The interest has come to fruition.

The Second Stone
04-09-2012, 06:14 PM
I really don't like it when movies casually use a legal rule like the rule against perpetuities, but don't explain how it comes into play. I believe Body Heat did the same thing. In both cases, a couple of sentences could have clarified why it was an issue.

The rule against perpetuities is a famously complicated rule of property law. Many states have now changed its application, but the trust referred to in The Descendants would have been structured to comply with its original form. Essentially, the rule against perpetuities requires that, in order to be valid, an interest must vest within lives in being plus 21 years. A noncharitable trust is not a vested interest, so the rule sets a time limit on the duration that property can be held in trust: lives in being plus 21 years.

So, for example, the settlor could have established the trust in her will and provided that the property was to be held in trust for her descendants for such period of time as the trustees may determine, but in any case not longer than 21 years after the death of her child who is last to die of her children. Presumably the trust did have some such term, even though we don't know the details.

Note that, if the settlor established the trust while she were still alive, rather than in her will, then the term just stated would not have worked, because she could have had a child after establishing the trust. The law assumes this to be the case, even if she were in her eighties (a "fertile octogenarian") when the trust was established. Nice points such as this are why the rule is justly renowned for its unexpected complexities. The trust would have needed some other measurement, such as "21 years after the last to die of the currently living descendants of Queen Victoria."

This is my understanding of the rule and the best in the thread so far. I think what needs to be added is that if there is a possibility that the trust will not vest within 21 years of specific lives now being lived, the rule is violated.

Also, at depositions, I have seen a counsel object to an overly long and complex question with "objection, violates the rule against perpetuities." This is hilarious if it isn't a pattern of disruption. Ah, legal humor. I also remember once that an opposing counsel's objection was punctuated with an earthquake, to which he added at the end: "and God objects too!"

jtgain
04-09-2012, 06:14 PM
A corollary to the Rule Against Perpetuities (which Firefox wants to spell-check to 'Perplexities') is that if any 80-year-old bears a child, every practicing attorney is free to shoot spitwads at her.

What if that 80 year old's child becomes a precocious toddler who marries an unborn widow named Shelley?

jtgain
04-09-2012, 06:31 PM
-what does "vest" mean in this context?

"Vest" means when it becomes certain who will have that interest in the property.

Say I grant a piece of land to "all my children who reach age 15." When does that "vest"? I currently have one child, age 8. Does it vest to her in 7 years? Nope.

Property law determines that as long as I am alive (even if I'm 105 years old with my testicles removed), I can have another child. My one daughter can't "cheat" a hypothetical future child out of that interest by taking when she turns 15. And for the child to inherit he/she has to live to age 15. So that property won't "vest" (or everyone knows who has what interest) until I die, plus 15 years after that.

Plus it is possible that none of my children live to be 15: that is the "if at all" part after the word vest.

jbaker
04-09-2012, 06:43 PM
What if that 80 year old's child becomes a precocious toddler who marries an unborn widow named Shelley?

Ah, legal humor. For the 99.44% of the audience who are not lawyers: jtgain is referring to the second most infamous rule of property law, the Rule in Shelley's Case. If you're still curious, see the description in Wikipedia, which will confuse you to your heart's content.

Bricker
04-09-2012, 08:36 PM
This is my understanding of the rule and the best in the thread so far. I think what needs to be added is that if there is a possibility that the trust will not vest within 21 years of specific lives now being lived, the rule is violated.

Also, at depositions, I have seen a counsel object to an overly long and complex question with "objection, violates the rule against perpetuities." This is hilarious if it isn't a pattern of disruption. Ah, legal humor. I also remember once that an opposing counsel's objection was punctuated with an earthquake, to which he added at the end: "and God objects too!"

Heh.

My first boss at the PD's office told us about a time when he was up against a female prosecutor who, in the middle of arguing a motion, gave a muffled shriek and leapt away from her table. The judge asked her what was wrong and she pointed at the table, explaining there was a bug crawling on her notepad.

My boss immediately rose and said, "Move to quash, Your Honor."

Bricker
04-09-2012, 08:37 PM
What if that 80 year old's child becomes a precocious toddler who marries an unborn widow named Shelley?

And lives at Blackacre?

Zakalwe
04-09-2012, 09:27 PM
This is my understanding of the rule and the best in the thread so far. I think what needs to be added is that if there is a possibility that the trust will not vest within 21 years of specific lives now being lived, the rule is violated. So you couldn't make a trust that expire "21 years after the Disney Coporation loses copyright to the characters in the movie "Tangled"? Even though both Disney and Tangled both now exist and copyright is (theoretically) limited? If so, how does the current state of copyright law not violate the RAP?

The Second Stone
04-09-2012, 10:12 PM
So you couldn't make a trust that expire "21 years after the Disney Coporation loses copyright to the characters in the movie "Tangled"? Even though both Disney and Tangled both now exist and copyright is (theoretically) limited? If so, how does the current state of copyright law not violate the RAP?

It is a common law rule, and there is no federal common law, see Erie Railroad (I think, it was a quarter century ago). So federal laws don't have a RAP. Second, and more importantly, corporations are not people. Corporations are the fascist bedrock of this goosestepping strip searching for a speeding tickets love it or leave it ACLU free nation!! Laws apply even less to corporations than they do governments.

To sum up: RAP does not have an affect (or is it effect) on federal copyright laws. Which, by the way, are currently written at the behest of Disney, as you have so adroitly pointed out.

barbitu8
04-10-2012, 04:19 AM
To sum up: RAP does not have an affect (or is it effect) on federal copyright laws. Which, by the way, are currently written at the behest of Disney, as you have so adroitly pointed out.It is "effect." "Effect" is a noun, which too many people replace with "impact." "Affect" is the verb, unless you are referring to a psychological condition.

Ken001
04-10-2012, 05:59 AM
The common law rule against perpetuities is that no interest in property is good unless it must vest, if at all, not later than 21 years, plus period of gestation, after some life or lives in being at time of creation of interest.

The gestation period is approximately 9 months. Sperms or ovae in vivo are not "lives in being" and it is the "period of gestation" not the actual gestation, but such cells would not be in gestation anyway.

Quite right.

"En ventre sa mere" is the critical rule and you can't be en ventre while in a test-tube. :D

Ken001
04-10-2012, 07:59 AM
Ah, legal humor. For the 99.44% of the audience who are not lawyers: jtgain is referring to the second most infamous rule of property law, the Rule in Shelley's Case. If you're still curious, see the description in Wikipedia, which will confuse you to your heart's content.

Ah thankyou I'd forgotten all that. Far in the misty past.

Sadly the Wiki article made complete sense, even worse I found it interesting. ;) Its the rationale for placing an estate in the hands of trustees to hold for the life of the widow/er then in remainder to the heirs - as opposed to creating a life estate for the widow in her own hands. Actually we can do that here but its rare.

Cliffy
04-10-2012, 11:44 AM
If so, how does the current state of copyright law not violate the RAP?

The one has nothing to do with the other. But as a rule, the legislature can always change the common law, including the RAP -- common law is the body of rules that obtains when the legislature hasn't spoken.

--Cliffy

jbaker
04-10-2012, 12:31 PM
Ah thankyou I'd forgotten all that. Far in the misty past.

Sadly the Wiki article made complete sense, even worse I found it interesting. ;) Its the rationale for placing an estate in the hands of trustees to hold for the life of the widow/er then in remainder to the heirs - as opposed to creating a life estate for the widow in her own hands. Actually we can do that here but its rare.

Personally, I found the discussion in Wikipedia a little difficult to follow (and I feel sure that a non-lawyer would have even more trouble). I prefer the description in Black's:

"Rule in Shelley's Case. (18c) Property. The rule that if in a single grant a freehold estate is given to a person and a remainder is given to the person's heirs, the remainder belongs to the named person and not the heirs, so that the person is held to have a fee simple absolute. The rule, which dates from the 14th century but draws its name from the famous 16th-century case, has been abolished in most states. Wolfe v. Shelley, 76 Eng. Rep. 206 (K.B. 1581).
[T]he rule in Shelley's Case, the Don Quixote of the law, which, like the last knight errant of chivalry, has long survived every cause that gave it birth and now wanders aimlessly through the reports, still vigorous, but equally useless and dangerous. Stamper v. Stamper, 28 S.E. 20, 22 (N.C. 1897)."

jbaker
04-10-2012, 12:34 PM
Incidentally, I checked to see if the discussion of the rule against perpetuities is clearer in the novel The Descendants, upon which the movie is based. The novel does not mention the rule, and the facts are a bit different: the property is controlled by its owners, and the narrator simply has a larger share than the other owners.

jtgain
04-11-2012, 06:34 AM
Personally, I found the discussion in Wikipedia a little difficult to follow (and I feel sure that a non-lawyer would have even more trouble). I prefer the description in Black's:

"Rule in Shelley's Case. (18c) Property. The rule that if in a single grant a freehold estate is given to a person and a remainder is given to the person's heirs, the remainder belongs to the named person and not the heirs, so that the person is held to have a fee simple absolute. The rule, which dates from the 14th century but draws its name from the famous 16th-century case, has been abolished in most states. Wolfe v. Shelley, 76 Eng. Rep. 206 (K.B. 1581).
[T]he rule in Shelley's Case, the Don Quixote of the law, which, like the last knight errant of chivalry, has long survived every cause that gave it birth and now wanders aimlessly through the reports, still vigorous, but equally useless and dangerous. Stamper v. Stamper, 28 S.E. 20, 22 (N.C. 1897)."


I took Property last year and this is how it was explained to me:

Say you have a nice homestead that you want to keep in the family, but you have a worthless, ne'er do well son. You want his kids to have the property when they grow older, but you are afraid that your son will sell the property and fritter the proceeds away on stuffed animal claw machines.

One thing you could do is give your son a life estate and leave the remainder to his heirs, that way with a life estate, he can't sell the fee simple in the property. Ah, but the Rule in Shelley's Case holds that since he has a life estate and a remainder in his heirs, that is in effect, the whole fee simple, so he has everything and can sell.

I think all states have abolished the rule which was originally decided to prevent people from getting around estate taxes by doing the above, but it can screw with a title search for transfers before the rule was abolished. See also Doctrine of Worthier Title.

Wheelz
04-11-2012, 07:00 AM
I really don't like it when movies casually use a legal rule like the rule against perpetuities, but don't explain how it comes into play. I believe Body Heat did the same thing. In both cases, a couple of sentences could have clarified why it was an issue.I had no problem with how it was handled in the movie. This thread is quite interesting, but the film would have come to a screeching halt while they stopped to explain all the legalese.

What we needed to know: Clooney and his relatives need to make a decision regarding what to do with their land, and he's been put in charge. Most want to sell, some don't. And on with the story. It worked for me.

jbaker
04-11-2012, 09:16 AM
I had no problem with how it was handled in the movie. This thread is quite interesting, but the film would have come to a screeching halt while they stopped to explain all the legalese.

What we needed to know: Clooney and his relatives need to make a decision regarding what to do with their land, and he's been put in charge. Most want to sell, some don't. And on with the story. It worked for me.

Oh, I don't think we needed a detailed legal discussion. Really, we didn't even need the reference to the rule against perpetuities that we got. What I would have liked would have been something like this: "Trusts aren't allowed to last forever, so the princess's will said that the trust would have to be dissolved within 21 years after all of her children were dead. Great-uncle Joe died 14 years ago, which leaves us with another 7 years to go at most."

ouryL
04-13-2012, 02:54 AM
The author modeled this story after the Campbell Estate Trust in Hawaii. Established in 1900, the trust expired in 2000 and the majority(176) of heirs(save for 3) decided to form the "James Campbell Company".