[Outdated; Inaccurate] Overview -- State-Based Effects

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Originally by John Carter:

State-based effects (SBEs) are the janitors of Magic. It is their job to drive around the game scooping up leftover enchantments, dumping corpses, and breaking up disputes with squabbling legends. There are eleven SBEs listed in the Comprehensive Rules [420]. Furthermore, the “Sudden Death” effect from DCI sanctioned event playoffs operates like a SBE as well.

1. Player at zero or less life
2. Player attempting to draw from an empty library
3. Player with 10 or more poison counters
4. Creature with zero toughness
5. Creature with lethal damage-- can be replaced by regeneration
6. Token in any zone other than In Play ceases to exist
7. Multiple Legends with the same name
8. Local enchantment with a missing or illegal permanent
9. Multiple Enchant Worlds in play
10. A copy of a spell in a zone other than the stack ceases to exist.
11. An Equipment that equips an illegal or nonexistent permanent.
12. Change in life total during single-elimination rounds after time and turns are over with tied game scores and life totals (a.k.a. Sudden Death)

Breaking that list down a little further reveals a helpful pattern: 4-4-2. That’s four ways players die (zero life, drawing, poison, sudden death), four ways creatures die (zero toughness, lethal damage, tokens ceasing to exist, the legend rule), and two ways enchantments die (local enchantments with invalid permanents, enchant worlds).

State-based effects have several rules they follow. SBEs check at two times: when a player receives priority and as the last action of the Cleanup step. State-based effects do not check during the announcement or resolution of a spell or ability. No player controls SBEs. State-based effects do not use the stack; they resolve at the time SBEs are checked. And after a state-based effect has occurred, the check for SBEs is repeated.

The Legend Rule:
420.5e If two or more permanents with the same name have the subtype Legend or the supertype legendary, all except the one that has been a Legend or legendary permanent with that name the longest are put into their owners’ graveyards. This is called “the Legend rule.” In the event of a tie, each Legend or legendary permanent with the same name is put into its owner’s graveyard. (If two permanents have the same name but only one is a Legend or is legendary, this rule doesn’t apply.)

In lay terms, that means the new legend dies. And “new” means he one that just came into play even if it’s coming back into play after having gone on vacation. If two legends are arriving at the same time (i.e. from the same effect), they kill each other. Legends by definition are creatures. Two legends can stay in play if their names are not the same, and two permanents can have the same name and stay in play if only one of them is a legend / legendary. Notice though that if two permanents have the same name, and the non-legend one becomes a legend also, it is that newly changed permanent that is put in the graveyard even if it’s been in play as a non-legend longer.