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UBE - Real Property JRH > 2. Future Estates (RAP) > Flashcards

2. Future Estates (RAP) Flashcards

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1
Q

What is a future estate?

A

Grantor gives to Grantee interest including the right to ‘future’ ‘possession’

  • ‘Present’ legally protected right
  • NOT expectancy
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2
Q

What is a reversionary interest?

A

Grantor’s future interest reverted back from Grantee to Grantor

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3
Q

What are the types of reversionary interests?

A

Right of entry

  • Fee simple subject to condition subsequent
  • Life estate subject to condition subsequent

Reversion (Possibility of reverter)

  • Fee simple determinable
  • Life estate determinable
  • Grantor conveys estate (lesser duration) to Grantee
  • Grantee reverts estate (greater duration) to Grantor upon termination of specified event
  • By operation of law (NO need to be expressly stated)
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4
Q

What are the rights of a reversion holder?

A

Sue TP for damages (tort)

Sue Life Tenant for waste

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5
Q

Is a reversionary interest transferrable?

A

Conveyance
- NOT right of entry

Devise (by will)

Descend (by NO will)

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6
Q

Is a reversionary interest subject to Rule Against Perpetuities?

A

NO

- Vested interest (Grantor’s reversionary interest + specified event are certain)

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7
Q

What is a remainder?

A

1) Transferee’s future interest

2) Upon ‘natural’ termination of preceding estate
- Grantor => Grantee

3) In same disposition as preceding estate
- Grantor => Grantee => Transferee
- Otherwise if (Grantor => Grantee) then (Grantor => Transferee) => Transferee becomes Holder of reversionary interest

4) Expressly created

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8
Q

What is the difference between a reversionary interest and a remainder?

A

Reversionary interest
- NO need to be expressly created (by operation of law)

Remainder
- Must be expressly created

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9
Q

What type of present estates can a remainder be included in?

A

Defeasible fees
- Naturally terminates upon specified event

Life estates
- Naturally terminates upon end of one’s life

NOT fee simple

  • NOT naturally terminate (indefinite duration)
  • Cannot cut short preceding estate
  • Cannot transfer without a time gap
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10
Q

What is an indefeasibly vested remainder?

A

1) Ascertained persons
2) NO condition precedent
3) NO divestment/diminuition

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11
Q

What happens if the Transferee of the indefeasibly vested remainder dies before the Grantee?

A

Indefeasibly vested remainder passes to;

  • Transferee’s devisees (by will)
  • Transferee’s heirs (by NO will)
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12
Q

What is a vested remainder subject to open (partial divestment)?

A

1) NOT ascertained remaindermen
- Class gift
- Survivorship

2) Diminuition
- By others in class who will become entitled to share in remainder (tenants in common - equal shares)

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13
Q

When does a vested remainder subject to open become an indefeasibly vested remainder?

A

When class closes (becomes ascertainable) once;

  • Someone calls for distribution
  • Class of persons no longer possible
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14
Q

What happens to the interest of a remainderman who holds a vested remainder subject to open if he dies before the class closed?

A

Remainderman’s share => Either;

  • Remainderman’s devisees (by will)
  • Remainderman’s heirs (by NO will)
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15
Q

What interests do remaindermen possess in an open class?

A

Ascertained remaindermen
- Vested remainder subject to open (possessory upon natural termination of preceding estate when Parent dies)

NOT ascertained remaindermen
- Contingent remainder (NOT possessory upon natural termination of preceding estate - Not sure if ascertainable before Parent dies)

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16
Q

What is a vested remainder subject to condition subsequent (total divestment)?

A

1) Ascertained remaindermen

2) Condition subsequent
- Terminates remainderman’s right to possession + enjoyment
- If TP included => Third party’s executory interest becomes possessory
- If NO TP included => Grantor’s reversionary interest becomes possessory

17
Q

What is a contingent remainder?

A

NOT ascertained remaindermen (subject to persons)

  • Condition precedent: Remaindermen must survive Parent
  • Becomes vested remainder subject to open once ascertained BUT class not closed yet
  • Otherwise Grantor’s reversionary interest becomes possessory (if Remaindermen do NOT survive Parent)

Condition precedent (subject to event)

  • Becomes possessory subject to event
  • Remainderman’s contingent remainder becomes indefeasibly vested remainder
  • Otherwise Grantor’s reversionary interest becomes possessory
18
Q

Are remainders transferrable?

A

Conveyance
- Contingent remainders (most states) (NOT common law)

Devise (by will)
- UNLESS survival is condition to taking interest (contingent remainders)

Descend (by NO will)
- UNLESS survival is condition to taking interest (contingent remainders)

19
Q

Are remainders subject to Rule Against Perpetuities?

A

Vested remainder subject to open

Contingent remainder

20
Q

What happens if the contingent remainder does not vest before the preceding estate terminates?

A

1) Grantor had reversionary interest
2) Grantee’s interest reverts to Grantor

3) Remainderman’s contingent remainder becomes executory interest (springing)
- NO destruction of contingent remainder (modern view)

4) Grantor’s interest passes to Remainderman if ascertained/condition precedent fulfilled

21
Q

What happens to the contingent remainder if the same person acquires both present and future interests?

A

Doctrine of merger

  • Contingent remainder is merged into present and future interests (contingent remainder is destroyed)
  • Acquiring person had reversionary interest => Acquiring person has fee simple
22
Q

What is the Rule in Shelley’s case?

A

Grantee’s heirs have NO contingent remainder (common law)

Common law (mostly abolished)

  • ‘To A for life, then to A’s heirs’
  • A has life estate + contingent remainder (A’s heirs) => Merges into fee simple
  • A’s heirs have NO remainder

Modern view

  • ‘To A for life, then to A’s heirs’
  • A has life estate (NO merger)
  • A’s heirs have contingent remainder
23
Q

What is the Doctrine of Worthier Title?

A

Grantor’s heirs have NO contingent remainder

  • ‘O to A for life, then to O’s heirs/next of kin’
  • If A dies => Litigation would arise between O’s devisees by will (arguing O had reversionary interest because O’s heirs had no contingent remainder) vs O’s heirs (arguing O intended to create contingent remainder in O’s heirs - burden of proof is on O’s heirs)
  • NOT ‘children’
24
Q

What is the difference between Rule in Shelley’s Case and Doctrine of Worthier Title?

A

Rule in Shelley’s Case
- NO contingent remainder (GrantEE’s heirs)

Doctrine of Worthier Title
- NO contingent remainder (GrantOR’s heirs)

25
Q

What is an executory interest?

A

1) Transferee’s future interest

2) NOT upon ‘natural’ termination of preceding estate
- Grantor => Grantee (Remainder) OR Transferee (Executory interest)

26
Q

What is a shifting executory interest?

A

Divests Grantee’s interest

- Cuts short preceding estate in same disposition

27
Q

What is a springing executory interest?

A

Follows gap in possession

  • Grantor has reversionary interest
  • Transferee has executory interest springing out of Grantor’s reversion (after time gap)

Divests Grantor’s interest

  • Grantor has fee simple subject to executory interest
  • O to A if A marries B
28
Q

What is the difference between shifting and springing executory interest?

A

Shifting executory interest
- Divests Grantee’s interest

Springing executory interest

  • Divests Grantor’s interest
  • Time gap in possession
29
Q

What type of present estates can an executory interest be included in?

A

Defeasible fees
- Naturally terminates upon specified event

Life estates
- Naturally terminates upon end of one’s life

NOT fee simple
- NOT naturally terminate (indefinite duration)

30
Q

Are executory interests transferrable?

A

Conveyance

  • Most states
  • NOT common law

Devise (by will)
- UNLESS survival is condition to taking interest

Descend (by NO will)
- UNLESS survival is condition to taking interest

31
Q

Are executory interests subject to Rule Against Perpetuities?

A

Yes

32
Q

What is the difference between executory interests and contingent remainders?

A

Executory interest

  • NOT destructible
  • NOT vested
  • NO Rule in Shelley’s Case (Transferee has executory interest)

Contingent remainder

  • Destructible
  • Can become vested
  • Rule in Shelley’s Case (Remaindermen have NO remainder)
33
Q

Are future interests reachable by creditors?

A

Yes (nearly all states)

UBE - Real Property JRH (29 decks)

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