Business, Legal & Accounting Glossary
An interesting set of setiusggons, but problematic. Two things: First of all, the first suggestion is probably not going to work because it frustrates the purpose of the trust. One of the things Burroughs is probably going to have to do is make promises against the trust principal to carry out his obligations under the terms of the trust. Carving out an allowance for that without giving away the fact that Carter is still alive is going to be very difficult. Burroughs is, after all, going to have to provide for the general maintenance of the estate and his occupancy therein if he wants to protect Carter’s crypt. Drawing a hard-and-fast legal rule between that and Burroughs just using the money for his own purposes is going to be very, very difficult, and a court that didn’t know the real purpose of the trust might well disregard such a requirement. Of course, a court that did know the real purpose of the trust was probably going to be annoyed anyway. So that’s a problem. But both are probably void for violating the Rule Against Perpetuities, which provides that a future interest in property must vest within twenty-one years of the end of a life currently extant. The trust as set up in the movie works, because there’s a definite point in which it vests, even if it’s a ways out there. It definitely goes to Burroughs, or to his heirs if Burroughs dies. But the first suggestion is problematic because there’s this reversionary interest tacked on which might trigger after Burroughs dies. A court might take a look at that and say Look, we’re going to let you set this thing up so that it distributes a ways down the road, but we’re not going to let you put any kind of reversionary interest on it that goes that far out. The second suggestion is even more problematic because the interest has no specific date at which it will vest! It might not ever do so. Of course, the odds are good that it’ll vest within a year or three after the trust period ends, but there’s no guarantee of that. The RAP was created to promote certainty in property transactions as much as anything else, and neither a court faced with the provision nor the Recorder’s Office is not going to like what introducing a coin flip is going to do to the title.
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This glossary post was last updated: 5th April, 2020 | 0 Views.