A WORKED EXAMPLE

The nature and operation of the perpetuity rule is best explained by

working through an example. Assume the following settlement was made
before 1997:
•to Adam (a bachelor) for life;
•r emainder to his widow for life;
•r emainder in tail to his first child to attain the age of 25;
•r emainder to Beth in fee simple.
A perpetuity problem is approached by asking three questions in the
following order.
(a) Is the gift vested or contingent?
The rule against perpetuities attacks contingent gifts only. If the gift has
already vested, whether it is vested in possession or vested in interest, the
rule has no application.
The meaning of ‘vested’ was noted in the last chapter. Generally, a gift
is vested if it satisfies two tests:
•the taker is ascertained; and
•the gift takes effect in possession, or else is ready to take effect in
possession subject only to the dropping of life or lives.
For the purposes of the perpetuity rule, however, a gift does not count as a
vested gift unless it also satisfies a third test:
•the size of the share is known.
This third test is relevant where there is a class gift of some sort. For nonperpetuity
purposes, a class gift vests when the first member of the class is
ready to take, subject to incremental divesting as further members of the
class qualify. For example, suppose there is a gift to the children of a
childless couple. On the birth of their first child, the whole gift vests in him
provisionally. On the birth of their second child, the first is divested as to
half. On the birth of a third child, the other two are each divested as to one
sixth, and so on progressively.
110
For perpetuity purposes, however, it is the final division, not the
provisional vesting which is important, and the destination of a class gift is
not finally settled until the last member qualifies. (But remember that there
are special class closing rules which may artificially restrict, and so save, an
over-large class.)
Applying that first question, ‘vested or contingent?’, to the four gifts set
out above:
•the gift to Adam for life is clearly vested in possession, and there is no
perpetuity issue;
•the second gift, to his widow, is contingent because the taker is not yet
ascertainable, and will not be ascertainable until Adam’s death;
•the third gift, to Adam’fsi rst child, is also contingent, assuming he has
not fathered an illegitimate child;
(These days, in a disposition of property, unless a contrary intention
appears, no distinction is to be made between legitimate and
illegitimate children save in relation to titles of honour and land
devolving therewith. So, for the sake of completeness, perhaps it should
be said that if Adam already has a 25 year old child, the gift has vested;
otherwise the gift is contingent.)
•the fourth gift, to Beth, is vested. She is not entitled to possession of the
land until all prior interests are exhausted, but she is nevertheless
vested in interest. Her gift satisfies all three tests. Even if the prior entail
lasts for generations and generations, it is still true to say that Beth is
ready to take effect in possession subject only to the dropping of lives.
She has a vested fee simple which will devolve under her will or on her
intestacy, and Beth or her successors can take possession when all the
prior lives have dropped. No further perpetuity issue arises in relation
to Beth.
In relation to the gifts to the widow and the child, it is necessary to proceed
to the second question.
(b) Is the gift valid or void at common law?
The question is: Assuming the gift does vest, must it vest within the
perpetuity period, or is there a possibility, no matter how far-fetched, that it
might vest outside the perpetuity period? If there is such a possibility, the
gift is void at common law.
UNDERSTANDING LAND LAW
111
(i) General approach
Note two features in particular. First, the question is not, will the gift vest?
but, if the gift vests, when will that be? In relation to the widow’s gift, for
example, it is irrelevant, for perpetuity purposes, that Adam might never
marry, or that he might outlive his (last) wife. It is irrelevant that he might
never leave a widow. The question is, if the gift to the widow ever vests,
when will that be? Similarly, in relation to the gift to Adam’s child, it is
irrelevant, for present purposes, that Adam may never have a child, or that,
if he does, the child may die young. The question is, if he has a child, and
if that child attains 25, will it be within, or could it be without, the
perpetuity period?
The second feature to note is that the common law rule deals with
possibilities, not probabilities. It is not permissible to wait to see what in fact
happens. The validity must be judged at the date of the gift. It is necessary
at every turn to assume that the worst will happen, whilst still leaving open
the possibility that the gift will eventually vest. You have to see if it is
possible to invent a sequence of events – no matter how unlikely – which
would force the gift to vest outside the perpetuity period. To put it luridly,
it is necessary to assume that disaster lurks round every corner, that
women are likely to die in childbirth, that fathers