Friday, May 13, 2011

Rule Against Perpetuities Ends 92 Year Inheritance Wait

"No interest is good unless it must vest, if at all, no later than 21 years after the death of some life in being when the interest was created."

Ah, the rule against perpetuities. Some law students spend hours, days or even weeks learning the intricacies of RAP only to have it appear in briefly, if at all, on the bar exam three years later. Due to its difficulty and the fact that RAP has been statutorily abolished in many states students complain about having to learn it and some professors complain about having to teach it. But what happens when you practice in a state where RAP is still good law or was in effect when a will or trust goes into effect?

This week a Michigan probate court settled the estate of lumber baron Wellington Burt, who died in 1919. Michigan repealed RAP for personality held in trust in 2008. Due to the language used in the drafting of his trust Burt's heirs were not allowed to collect their share of his $100 million dollar fortune until 21 years after the death of his last grandchild. Burt's last remaining grandchild died in 1990. The Rule lives on (sort of)!

To read more about the life, death and fortune of Wellington Burt and what the probate judge called "one of the most complicated research problems" of his career click here and here

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