2. Future Interests Flashcards
What are three future interests capable of creation in the grantor?
- The Possibility of Reverter
- The Right of Entry, also known as the Power of Termination
- The Reversion
What does a possibility of revert accompany?
A fee simple determinable
What does a right of entry accompany?
A fee simple subject to condition subsequent
What is a reversion
A reversion is the future interest that arises in a grantor who transfers an estate
of lesser quantum than she started with, other than a fee simple determinable
or a fee simple subject to condition subsequent.
What are the possible future interests in transferees
- Vested remainders
- Contingent remainders
- Executory interests
What is a remainder?
A remainder is a future interest created in a grantee that is capable of
becoming possessory upon the expiration of a prior possessory estate created
in the same conveyance in which the remainder is created.
When is a remainder vested?
A remainder is vested if it is both created in an ascertained person and is not subject to any condition precedent.
When is a remainder contingent?
A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent, or both.
When is a condition a condition precedent?
A condition is a condition precedent when it appears before the language creating the remainder or is woven into the grant to remainderman.
What are the three kinds of vested remainders?
- The indefeasibly vested remainder
- The vested remainder subject to complete defeasance
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What is a vested remainder subject to remainder called in NY?
A “remainder vested subject to complete defeasance.”
The indefeasibly vested remainder:
The holder of this remainder is certain to acquire an estate in the future, with no strings attached.
The vested remainder subject to complete defeasance
The remainderman’s taking is NOT subject to any condition precedent. However, his right to possession could be cut short because of a condition subsequent.
Comma Rule
When conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance.
By contrast, if the conditional language appears before the language creating the remainder, the condition is a condition precedent, and you have a contingent remainder.
The vested remainder subject to open:
Here, a remainder is vested in a group of takers, at least one of whom is qualified to take, but each class member’s share is subject to partial diminution because additional members can still join in.
A class is open if:
others can still join
A class is closed when:
no others can join
How will you know when the given class has closed?
The class closes whenever any member can demand possession.
What is an executory interest?
It is a future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (“shifting”) or in the grantor or his heirs (“springing”).
Shifting executory interest:
It always follows a defeasible fee and cuts short someone other than O, the grantor.
Springing executory interest:
An interest in an estate in land created by the conditions of a grant wherein the grantor cuts short the grantor’s own interest in the property in favor of the grantee, contingent upon the occurrence of a specific condition.
How does NY view executory interests and contingent remainders?
New York has abolished the distinction between executory interests and contingent remainders. Instead, contingent remainders and executory interests are called a remainder subject to condition precedent
