The rule against perpetuities destroys any contingent remainder that, based on analysis as of the time of the grant or devise, could possibly stop being contingent outside the perpetuity period.
1. "could possibly stop": any chance, no matter how unlikely, that the contingent remainder will stop being contingent outside of the perpetuity period.
2. "perpetuity period": a life in being plus 21 years. A life in being is a person alive at the time of the grant or devise. Life begins at conception for purposes of this rule. Remember that, in devising scenarios, the population of the world, with the exception of our interesting lives, could die when the asteroid hits.
3. Time for application: The rule is applied as of the time of the grant.
That is all you need to know about the definition of the rule against perpetuities; the rest is all up to your imagination. You must ask yourself: is there any possible series of events that could happen that would result in the remainder ceasing to be contingent outside of the perpetuity period? If the answer is yes, the remainder is destroyed by the rule.
Keep in mind that the analysis is done as of the time of the grant or devise., It makes no difference if the remainder in retrospect, stopped being contingent inside the perpetuity period. The important point is whether the remainder could have stopped being contingent outside the perpetuity period, based on facts available at the time of the grant or devise plus what might have happened after that time. .
For the purposes of the rule against perpetuities it is useful to divide contingent remainders into three categories:
· contingent remainders at common law.
· contingent remainders in equity, and
· contingent remainders created by application of the Statute of Uses.
When doing a perpetuity analysis on a common law remainder one must keep in mind the effect that the common law remainder rules will have on the contingent remainder. Consider the following grant. A had no children and no grandchildren at the time of the grant.
---> Grant To A for life, remainder to the grandchildren of A at 21 years of age.
If one were to consider the rule against perpetuities alone this contingent remainder would appear to violate the rule. It is possible that a grandchild of A could reach the age of 21 more than 21 years after the death of A. If one considers the common law remainder rule that all remainders must be supported by a precedent freehold estate, it would become clear that the remainder must stop being contingent inside the perpetuity period. If the remainder does not stop being contingent during the life of A the remainder will be destroyed by a common law remainder rule. Therefore, in this grant, there is no violation of the rule against perpetuities.
This does not mean that the rule against perpetuities will never be violated by a common law remainder. Consider the following grant. There are no children of B alive at the time of the grant but B is alive at the time of the grant.
---> Grant To A for life, remainder to B's children for life, remainder to B's grand children at the age of 21.
As a result of this grant A holds a life estate at common law. Each of the children of B holds a contingent remainder for life at common law. The remainder is contingent as it is not yet possible to identify the children. This remainder does not violate the rule against perpetuities. If there is no child of B born before A dies the remainder is destroyed by the second common law remainder rule. The remainder to the grandchildren violates the rule against perpetuities. It is true that a grandchild of B must be born before a child of B dies, the remainder nonetheless violates the rule against perpetuities. It is possible that a grandchild of B is born more than 21 years after the death of A. Remember that B had no children at the time of the grant so any child of B is not a life in being at the time of the grant. Try a time line for this grant remembering that A and B are lives in being at the time of the grant, and considering at least one child of B born during the lifetime of A, and both A and B die immediately after the birth of this child.
The conclusion that can be drawn from the differences between these two grants is simple When dealing with a contingent remainder at common law, if the precedent freehold estate cannot be held by any person who is not a life in being, there can be no violation of the rule. In the first grant the words of purchase specifically named A as a grantee. A is a life in being. In second words of purchase described each of a class of people that could hold the life estate, none of whom is a life in being.
Consider the following grant. B had no children at the time of the grant.
---> Grant To B for life, remainder for life to B's first child to marry, remainder to the first grandchild of B that is a child of B's first child to marry during the life of B's first child to marry.
In this grant the remainder to B's first child to marry will not violate the rule against perpetuities. Although B's child may never marry, a child of B must marry within the life of B or the remainder will violate the common law remainder rule with respect to the requirement of support by a precedent freehold estate.
But in this grant, the contingent remainder to the first grandchild violates the rule against perpetuities. The precedent freehold estate could be held by B's first child married. If B eventually had a child that became married (since it might happen, it is useful for perpetuity analysis to investigate the possibility) B's first married child is not a life in being. It is therefore possible that B's first grandchild could be born more than 21 years after the death of B. Note that any other life in being (eg B’s lawyer) might die the day after the grant. Thus there could be a contingent remainder remaining when both the grantor and B had been dead for 21 years. That contingent remainder is therefore destroyed at the time of the grant by the rule against perpetuities.
The rule against perpetuities does not change if the remainder is an equitable remainder. Any equitable remainder that could possible stop being contingent outside of the perpetuity period is destroyed.
The difference is that the common law remainder rules do not apply to equitable remainders. This makes the possible number of events that must be considered more extensive. One is no longer able to rely on the fact that the contingent remainder must cease being contingent before the end of the precedent freehold estate. Consider the following grant. There were no children of the grantor alive at the time of the grant.
---> Grant To B to the use of B for life, remainder to the use of my grandchildren.
Given that there are no children of the grantor alive as of the time of the grant, the remainder violates the rule against perpetuities. The grantor could have another child. The grantor could then die. That child could have a grandchild of the grantor more than 21 years after the death of the grantor or of B, whichever was later.
If this were a common law remainder, we would be concerned with Common Law Remainder Rule #2 and whether B could die before the birth of a grandchild Common Law Remainder Rule #2 does not apply to this equitable remainder.
If the grantor had child who was alive at the time of the grant, the remainder would still violate the rule against perpetuities. This is so because that child of the grantor could die before having any children, and the grantor could have another child after the grant. This child born after the grant would not be a life in being at the time of the grant, and could have a child outside the perpetuity period.
In the above grant would it make any difference if the grantor had one child and was 99 year old female? Although it would seem highly unlikely that the child now alive would die, and the grantor would have another child, you are in no position to say it is impossible. The common law assumed that a woman of any age could give birth, consequently the low probability of reproduction makes no difference to the analysis at common law.
What if, at the time of the grant, Grantor had one orphan grandchild?
Assume the same language as the previous grant, but assume that it is a devise. There could be no violation of the rule against perpetuities as a result of this devise. There are only two possibilities.
· First, the devisor left no children. In that case the remainder will never cease to be contingent.
· Second, the devisor has left children. In that case the children are lives in being. The children are also the grandchildren generators. It would be hard to imagine that a child of A could give birth to a grandchild of A 21 years after that child's death.
It is possible to avoid having the rule against perpetuities destroy an equitable remainder by precise use of language in the grant. Consider the following grant. The grantor had no children at the time of the grant.
---> Grant To B to the use B to the use of such of my grandchildren who become 21 within 21 years of the death of all the descendants of George VI now alive.
This grant does not violate the rule against perpetuities. It is possible that a grandchild could become 21 more than 21 years after the death of the last descendent of George VI alive as of the time of the grant. It is not possible that the happening of this event will cause the contingent remainder to stop being contingent. The child must reach the age of 21 before 21 years have passed since the death of the last descendant of George VI for the contingent remainder to stop being contingent. The words of the grant preclude the possibility that the contingent remainder could cease being contingent beyond the perpetuity period. This grant contains what is known as a “Royal lives clause”. There is authority for the proposition that the contingent remainder does not violate the rule against perpetuities. If that is correct, would replacing the words “the descendants of George VI now alive” with the words “lives in being” also work?
This grant also is an example of another important aspect of the rule against perpetuities. The rule is that the contingent remainder must stop being contingent within the perpetuity period, not that it must stop being contingent. In the example above, the grantor may never have any grandchildren. The fact that the remainder may never, or will never, stop being contingent does not violate the rule against perpetuities. Consider the following grant. A and B are alive as of the time of the grant.
---> Grant To A to the use of A for life, remainder to the use of B if he walks on the moon.
It is highly unlikely that B will ever walk on the moon, but this remainder does not violate the rule against perpetuities. If B ever does succeed at his life-long dream of walking on the moon he must do so within the perpetuity period. It would be hard to imagine that B could walk on the moon 21 years after his own death
As you know, common law remainders created by application of the Statute of Uses are not subject to the common law remainder rules in every instance. The remainders are subject to the rule in Purefoy v. Rogers. This rule requires that if the remainder created by application of the Statute of Uses can comply with the common law remainder rules it must comply with the common law remainder rules. This can have implications when doing a perpetuity analysis. Consider the following grant.
---> Grant To X to the use of B for life , remainder to the use of B's grandchildren at the age of 21.
As a result of this grant, after application of the Statute of Uses, B holds a life estate and each of the grandchildren of B holds a contingent remainder in fee simple. The rule in Purefoy v. Rogers applies to this contingent remainder. It is possible that each remainder could comply with the common law remainder rules, therefore it must or be destroyed. Given the application of the rule in Purefoy v. Rogers it is not possible that this remainder will violate the rule against perpetuities. If the contingent remainder does not stop being contingent within the life of A, it will be destroyed by common law remainder rule #2, requiring support by a precedent freehold estate. A grandchild of B must reach 21 before the death of B or that grandchild’s remainder is destroyed.
Given that the rule in Purefoy v. Rogers applies to the contingent remainder created by application of the Statute of Uses, and that the precedent freehold estate cannot be held by a person that is not a life in being, there can be no violation of the rule against perpetuities. Keep in mind that this is not a rule. It is a conclusion that will follow from correct application of the rules.
But what happens when the rule in Purefoy v. Rogers results in the remainder not being subject to the common law remainder rules? Consider the following grant. B had no children at the time of the grant.
---> Grant To X to the use of B for life, then, one day after the death of B, remainder to the use of B's grandchildren at the age of 21.
It is clear, as of the time of the grant, that this remainder cannot comply with the common law remainder rule that requires support by a precedent freehold estate. Consequently, the contingent remainder in this grant need not comply with the common law remainder rules. That being the case, the remainder violates the rule against perpetuities. It is possible that a grandchild of B could be born outside of the perpetuity period. For example, B could have a child one year: after the grant, and die the next day. That child might have his first child at the age of 30. This would be beyond the perpetuity period as B's child is not a life in being. Thus the remainder to the use of B’s grandchildren is destroyed. On the death of B the grantor or heir of grantor holds an estate in fee simple.