Donald H. Gjerdingen - A Short & Happy Guide to the Rule: The Little Book on Perpetuities

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The Rule

The Little Book on Perpetuities

Second Edition

Donald H. Gjerdingen

Professor of Law
Indiana University Maurer School of Law

A SHORT & HAPPY GUIDE SERIES

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a short & happy guide series is a trademark registered in the U.S. Patent and Trademark Office.

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ISBN: 978-1-64708-514-8

To Kendra, Erick, and Kari, and to Eloise, Anette, and Lenamy beautiful lives in being.

Acknowledgments

Im grateful to my colleague, Jeff Stake, for his comments and his enthusiasm for the subject. And to Ms. Mary Beth Boyer and Ms. Cassie Fitzwater for their careful work on the manuscript.

My thanks to Elizabeth Eisenhart, an editor who, when asked, What about the Rule against Perpetuities? did what so many generations of law students and lawyers have doneshe laughed.

Bloomington, Indiana

June 2021

The Common-Law Rule Against Perpetuities

No interest 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.

John Chipman Gray, The Rule Against Perpetuities
201, at 191 (4th ed. 1942)

Table of Contents

C. Why This Rule Is Different

G. The Famous Common-Law Rule of John Chipman
Gray

L. Recent Repeal of the Rule & the Return of the Fee
Tail

D. A Possible Carveout for Families in a Fee Simple
World?

The Legal Setting of the RuleFuture
Interests, Conditions, & Contingent Title

B. The Hypothetical Fate of Families in a Fee-Simple
Only World

C. Families & Future InterestsLife Estate & Remainder
as Example

F. Conditions & the Central Problem of Contingent
Title

Chapter 7

A. The Legal Road Not TakenVisible Inconvenience as
a Standard (vs. a Rule)

D. Ways of ThinkingLooking Forward Using
Hypotheticals

Part 4 The Common-Law Rule
of John Chipman Gray

What Types of Contingencies Usually Are
Involved?

The Cold Heart of Grays RuleTwo Options
& Some Rules of Thumb

E. Proving the Validating SideNaming a Validating
Life

F. Proving the Invalidating Sidethe Perpetuities
Storyline

Logical Proof & However Remote

Some Common Cases & Some Classic
Traps

Will or Revocable TrustGifts to
Grandchildren

To the Grandchildren of a Person Now Alive
[Three Generations]

Irrevocable Trust vs. Revocable Trust or Will
[Three Generations]

Fertile Octogenarian [Three Generation
Variant]

Administrative Contingency [No Named
Persons]

Another Final AnswerInvalidDo the Proof
Tell the Invalidating Story

Chapter 14

Applying the RuleGeneral Testamentary Powers
& Special Powers

Applying the Rule to Class GiftsAll-or
Nothing

Rule Against Suspension of the Power of
Alienation

An InterludePersonalitiesBarton
Leach

Reforms GenerallyReformation & Wait
and-See

B. Major ReformReformation

Wait-and-SeeClassic Cases & OthersFlipping
the Odds

Invalidating Side of USRAP90-Year Wait-and
See

B. Restatement (Third) of PropertyTwo Full
Generations

What Life in Being plus 21 Years Did to
Families

Problems with Those Extra 21 YearsEquity
Within the Same Generation

Problems with Those Extra 21 Years
Complications for Drafting

Problems with Those Extra 21 YearsDonative
Gifts & Families

Generations-Based PerpetuitiesAnother
Option

C. The Demise of Formalisma New Age for Wills &
Trusts as Well as Perpetuities

Congress, Taxes, & Abolition of the Rule
the Humpty-Dumpty World of Modern
Perpetuities

The Mitigating Role of Trusts & Personal
Property

D. Policy # 3Property Reboots & Practical Problems of Trusts

A Short & Happy Guide to
The Rule

The Little Book on Perpetuities

Second Edition

Introduction

[L]et us not forget the bedeviled law student.

Barton Leach, Perpetuities in a Nutshell ,
51 Harv. L. Rev. 638, 638 (1938)

A.Law Students & the Rule Against Perpetuities

The Rule against Perpetuities is about grand fortunes and power, intrigue, politics, and lasting fame. Its also about big questions of property, families, and markets.

Why, then, do so many law students dread the Rule against Perpetuities? And how, too, did all this fun get lost in law school?

The problem is not with the students or the Rule, but how the story is told. Once dissected, the Rule is hardly as long-fanged as so many legal memories make it out to be.

B.Why We Study the Rule

Why do we study the Rule? In all, there are two good reasons. First, the Rule raises a wonderful policy question for the law: how far into the future may one generation control property? In one way or another, every generation must answer it. For the last 350 years, the answer has been the Rule against Perpetuities.