I watched 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: 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?
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.
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.”
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.
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?
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, a SCOTUS decision upholding the constitutionality of certain provisions of the Act.
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.
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).
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?
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.”
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.
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.
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!”
“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.
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.