News article about Iger, Disney CEO, pulling a fast one by relying on a law that somehow depends on Charles III’s last descendent dying, but I can’t figure it out and the sites I go are too buggy for me to decipher any of it. Link? Explanation? Does Anyone understand what’s going on?
This one might help:
I think this is the heart of it here:
This section of the contract comes directly from the Royal Lives Clause. This is a contract clause which provides that a certain right must be exercised within the lifetime—plus 21 years —of the last living descendant of a British Monarch who happens to be alive during the time that the contract is made.
I’m wondering if there’s a problem that there is currently no such title as “King of England.” Charles is King of the United Kingdom of Great Britain and Northern Ireland. (Also King of Canada, Australia, New Zealand, etc.)
I don’t think there’s a problem. I live in England, which is part of the UK, so Charles is my King.
Would it be suitable to say an American living in (say) Nevada still has Biden* as his current President?
*or Trump 
It’s all coming from the Rule Against Perpetuities. The Rule Against Perpetuities was originally common law but it is now statutory law in Florida.
The Rule Against Perpetuities can be a real mind screw in some scenarios. It is, or at least was, a favorite topic among people that write bar exam questions.
Can you explain that a little more for those of us who don’t speak legalese?
I suspect your first sentence tells a lot to those that understand legalese but it means nothing to me and I don’t think I’m the only one.
Existing thread
I think with the laser focus on this latest bit, a new thread is fine. I’m planning to leave this open and separate.
The line about Charles is mostly just a legalistic, “Fuck you!”, and is a distraction.
What they really did was exploit the “lame duck” weakness that exists in a lot of US political offices. There’s a period between a person in office finding out that they’re going to be out of office, and actually being out of office. However, during that time, they still have the legal authority to carry out actions of the office.
This has been used before for a “lame duck” official to screw with their incoming successors, and for some reason, DeSantis just assumed that this wouldn’t happen in this case.
So the previous board basically gave away the store before the new managers could take over. The new board came in to find the shelves empty, the door unlocked, the safe has a new (random) combination, the staff were all fired and granted unemployment coverage, and the office chairs had their wheels removed and sold for scrap.
If I understand it right (and I am neither a lawyer nor a brit), it really doesn’t have much of anything to do with the king of England.
Common Law says you cannot have a contract that goes on forever. It’s just not valid to say “this agreement will go on for all time”. But sometimes you WANT the agreement to go on forever, or at least for the forseeable future.
Hence, you say that the contract is valid until the last living descendant of an old king is dead. Kings and their families don’t tend to die randomly, and they care about succession and so keep track of descendants.
In other words, it’s a loophole. We don’t say “forever”, we say “until 21 years after the last descendant of a guy who already has lots of descendants that are unlikely to die out is dead”.
From Cornell Law School Legal Information Institute:
“A common law property rule that states that no interest in land 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. Because the meaning of this rule is virtually impossible to decipher, many states have modified it, and some have abolished it altogether.”
It’s purpose is to prevent really long term restrictions on the transfer of property.
So, this only applies to descendants of Charles who are currently alive?
Note that the Reedy Creek Improvement District covenant referenced in the OP actually states “…this declaration shall continue in effect until twenty one (21) years after the death of the last survivor of the descendants of King Charles III, King of England, living as of the date of this Declaration.” (emphasis added) so as to comply with the Florida statutory Rule Against Perpetuities.
The rule against perpetuities is a rule developed by the courts to prevent people from establishing trusts that accumulate wealth more or less for ever, without any ever actually benefiting from it.
Basically, if you set up a trust which will distribute benefits to people at some time in the future, all the benefits must be distributed within a period starting when the trust is established, and ending not later than 21 years after the death of some person or persons who are living when the trust is established. (The 21 years is added on so that if someone dies, but leaves an infant child, you can put off giving a benefit to that child until the child has become an adult.) Once all the trust property has been distributed in benefits the trust no longer exists, so this is basically a rule about how long a trust can last. (It doesn’t apply to charitable trusts and certain other trusts, which can indeed last for ever.)
Right. The original idea, presumably, was that the group of people for whose lives the trust would endure would also be the group of people who might receive benefits from the trust. But the rule doesn’t actually require this. You can set up a trust which will last for the lives of any group of people you care to define. They need have no other connection with the trust.
But the group must be clearly defined; you must be able to say with certainty whether any individual is or is not in the group. And, for practical reasons, it must be easy to identify the members of the group, and to know when each of them dies (so you know who the last survivor is, and when they die). So you need a group of well-known people, whose lives are publicly documented.
And, if you want the trust to last for as long as is possible, the group has to be large enough, and include enough relatively young people, that the chance all the members of the group being dead in 20 or 30 or 40 years is not high.
Hence, the “royal lives clause”. The members of the British royal family and their dates of birth and death are easy to find out. Say that your benefits must vest within the lives of (say) the descendants now living of King George VI plus 21 years; you can be reasonably confident that that group will contain at least one person who will live for another 80 years or so, so your trust can continue for about a hundred years.
It’s pretty arcane stuff, but the royal lives clause is just a device for ensuring that a private trust can operate for many decades. It has absolutely nothing to do with what property is put into the trust, or who might get benefits under the trust, or what kind of benefits they might get, or who is in control of these decisions while the trust operates. So the notion that the royal lives clause is somehow central to the effectiveness of whatever trust Disney has put in place here is wrong. It’s an arcane but very dull clause which features as standard in a very large number of private trusts.
Thank you, great explanation.
Stupid question, what if the UK and more importantly England gets rid of the monarchy?
The people whose lives you peg the trust to don’t have to be royal; it’s just that royals tend to have big families wifh established pedigree and enough wealth that they’re somewhat less likely to die early of misfortune than an average person.
If the UK got rid of the monarchy the same way France did, though, that’s a different story!
Thanks again. I think the Brit Royals are safe from that at least.
My question: can the incoming group rectify DeSantis’ oversight and simply re-instate the powers of the previous board? What’s preventing them from doing that? How binding is this clause?
And, thank you to @UDS1 for the excellent post!
Charles’s full royal style is:
I’m sure Florida will try to make an argument that “King of England” isn’t a title and isn’t reflected in his style. Interestingly, England is neither a “realm” nor directly a member of the Commonwealth. But Charles represents the “King” portion of “United Kingdom”, so England falls under his dominion. Meaning that although he’s not “THE King of England” he’s definitely “King of England.”
I’m glad I’m not a lawyer, and I’m specifically glad I’m not lawyering this case.
The Master touched on a similar issue here: Why are leases made for 99-year terms?
Generally, once you give authority to somebody else, you can’t unilaterally take it back unless the grant included a specific provision for doing so.