STEPS TO SEE IF RAP APPLIES:
Step One: Figure out the interests involved in a grant. What’s the possessory estate? Which future interest or future interests (there can be more than one) follow? For each future interest, determine whether it is a contingent remainder or an executory interest. Only these are covered by the RAP; grants to the transferor (our “O”) – reversion, possibility of reverter, and power of termination/right of entry – are not covered.
Step Two: For each covered future interest, figure out when it would vest if it does vest (or, alternatively, when we will be certain that it won’t ever vest). Remember, both a contingent remainder and an executory interest are considered to be contingent because some event or occurrence has to occur before the holder of the future interest is entitled to the possession of the property (for example, a future interest “to A if she graduates from medical school”). The contingent future interest will vest when and if this event occurs, even if the event does not immediately entitle the holder of the future interest to possession at that time. Imagine the holder of the future interest putting on the “vest.” What event or occurrence has to happen for this vesting to occur?
Step Three: Ask whether it is certain that the vesting would occur (or fail) within 21 years after the grant is made. If “yes,” then the interest is valid under the RAP. Grants that include a definite short time limit for the vesting (for example, vesting “if the Bucs win the Super Bowl again within 15 years” or “if baby Bobbi graduates from high school by age 19”) meet this test. If it is certain that the vesting would occur within 21 years after the grant is made, then the future interest is valid under the RAP. But only a small number of future interests can be resolved by applying this simple step.
If step three is “yes,” we’re done. If ‘no,” then move on.
Step Four: Ask whether it is certain that the vesting would occur before or at the death of some person alive at the time of the grant. Such a person is a validating life. If “yes,” then the interest is valid under the RAP. For example, if the future interest vests (or fails) at the moment when some specific person alive when the grant was made dies, then this person serves as a validating life. For example, a future interest that vests “if B’s oldest child outlives Agatha” is certain to vest, if at all, at Agatha’s death. (Yes, the RAP is morbid.) Agatha thus serves as the validating life.
If step four is “yes,” we’re done. If ‘no,” then move on.
Step Five: If neither Step Three nor Step Four answers the matter, the interest nonetheless might still be valid. It is valid if it is guaranteed to vest or fail during the life or at the death of a person alive when the grant was made, plus 21 years. Sometimes, the vesting might occur after someone’s death, but is still guaranteed to vest before 21 years after the death. For example, consider a future interest to “Agnes’s first child who graduates from high school by the age of 19.” This must vest or fail, within 21 years after Agnes’s death (Agnes has to be alive to have this child); Agnes is thus a validating life, even if the child is born after the grant was made. However, if the interest might possibly vest too late, it is invalid. We ask: What might happen to have the interest vest too remotely? Thus a grant to “A’s husband when he turns 50” is not valid, even if A has a husband who is 49 when the grant is made. Why? A’s current husband might die or get divorced soon after the grant, and A could remarry, 23 years later, a 22-year-old young man who was born after the grant was made. Then A could die, 28 years before the second husband reached 50, when the future interest vests (assuming the grant is interpreted to allow vesting in a widowed husband). Unlikely? Hey, it could happen. Thus, there would be no validating life. The interest is invalid as written, under the traditional RAP.
Things to look out for:
1. “Afterborn” persons. A contingent future interest granted to a person not identified by name might end up being given to someone who isn’t born until after the grant is made. As noted above, grants to “A’s husband” or “B’s first daughter to graduate from college” could result in vesting in people not yet born when the grant was made. Thus these people can’t be a validating life.
2. Conditions that are not related to the holder of the future interest. Some future interests require that the holder of the interest meet a condition before vesting. For example, consider a grant “to Bobby if he graduates from college.” Bobby is a validating life, because he was alive when the grant was made and also must be alive at the time of vesting. But a grant “to Bobby whenever the Bucs next win the Super Bowl” might vest many, many years beyond Bobby’s death (let’s hope not). Why isn’t this guaranteed to vest within Bobby’s life? Remember, a future interest grant “to Bobby” means a grant of a future interest in fee simple absolute, which then would pass to Bobby’s heirs, etc., after Bobby’s death. Accordingly, this grant would be invalid under the RAP. In sum, if the condition has nothing to do with the holder of the future interest, there is a good chance that the future interest violates the RAP.