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Property 1 > Ch. 5 "Estates and "future" [may become possessory] interests" > Flashcards

Ch. 5 "Estates and "future" [may become possessory] interests" Flashcards

1
Q

Estates

A

An interest in land that gives the owner a right to possess the land either; immediately, in the future or potentially in the future

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2
Q

Common ways to divide ownership of land

A

[the rights to use, enjoy, and possess the land]

DURATIONS:

  • Present possessory rights
  • Future posessory rights

MUTIPLE OWNERS:
-split the posessory rights among 2 or more owners with equal rights

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3
Q

Decedent

A

A dead person

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4
Q

Testate

A

A decedent dies “testate” if he dies with a will

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5
Q

Intestate

A

Decedent dies without a will

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6
Q

Heirs

A

People who inherit real property from decedent who dies intestate

  • usually includes the persons spouse and children
  • if neither survive, may also include grandchildren
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7
Q

Devise

A

to pass real property by will

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8
Q

Devisee

A

the person receiving the property
NOTE: Heirs and devisees are no the same
1)devisees are beneficiaries under a will
2) heirs may inherit property not disposed of by a will

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9
Q

Bequeath

A

to pass person property by will. A decedent who dies testate “bequeaths” his property to those named in the will

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10
Q

Bequest

A

the property itself is called a “bequest”

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11
Q

issue

A

a person’s lineal descendants all the way down the line

-includes children,grandchildren and all other lineal descendants to the point where the biological line dies out

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12
Q

Collaterals

A

all blood relatives other than issue or ancestors

-includes siblings, cousins, aunts/uncles, nieces/nephews

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13
Q

Escheats

A

if a decedent has no heirs or devisees, the interest in land “escheats”(passes) to the state

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14
Q

Convey

A

A person transferring land to someone else, Can be by sale or gift and the transaction is a “conveyance”

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15
Q

Ways to transfer

A

1) Deed
2) Will
3) Intestate succession

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16
Q

Deed

A

1) the completed transfer is a conveyance or grant (verbs: convey, grant)
2) The person making the transfer is the grantor. The recipient is the grantee

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17
Q

Will

A

1) The completed transfer of real proeprty is called (Verb: devise)
2) The person who contains the devise is the testator (male) or testatrix (femaile). the recipient is the devisee.

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18
Q

Interstate succession

A

1) If a person dies without will, her property will be distributed by state statutes, usually to her closest living relatives. (verb: descend) The recipient is the heir

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19
Q

Present vs. future possessory rights

A

Ex: Blackacre is the Empire state building. SUppose i carve out more than one “estate” and divide the fee as follows” to my wife Lisa for life, then following Lisa’s death, to my daughter Remmy”

  • What does Lisa have right now–>Present possessory right-for the period of her life
  • Remmy?–>Future possessory right-following Lisa’s death for the rest of time in perpetuity
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20
Q

Present Estates that may become possessory estate

A

An existing, but NOT currently possessory, right that may become possessory in the future

  • no such thing as “future interest” - all estates exist now
  • Some consist of present possessory rights and some consist of future possessory rights
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21
Q

Future Possessory Estates (NOT future estates)

A

Estates now. The property exists but the rights are rights to future possession.
-They are valuable property-they just have different possessory rights and values will vary accordingly

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22
Q

Present possessory rights

A

Only a limited number of estate that can exist at the time of a division of a fee

1) FEE SIMLPLE
2) LIFE ESTATES

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23
Q

Future possessory rights: after life estates

A

1) reversion

2) remainders

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24
Q

Future possessory rights: Divest fee simples and life estates

A

1) Possibility of reverter
2) Right of re-entry
3) Executory interests

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25
Q

Four present possessory estates-defined by duration

A

1) Fee simple
2) Fee tail
3) Life estate
4) Defeasible fees

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26
Q

Fee simple

A

May last forever

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27
Q

Fee tail

A

Last until a line of descendants runs out

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28
Q

Life estate

A

Lasts for a person’s life

29
Q

Defeasible fees

A

Continue forever or may end upon the occurrence of some future event - 3 types and each entitles the holder to possession now

1) Fee simple determinable
2) Fee simple subject to condition subsequent
3) Fee simple subject to executory limitation

30
Q

Fee Simple absolute

A

Had the greatest potential duration of an interest in the common law system; can continue so long as each successive owner dies with heirs(potentially infinite)
-Owner of estate has ALL the rights “bundle”

NOTE: No future interest that accompanies fee simple absolute

Ex: The grant by “O to B and his heirs” can be read more simply “O conveys to B in fee simple absolute”

31
Q

Fee tail

A

1) Duration is by the lives of lineal descendants of a particular person
2) Most states have rejected this, and for the few where it still exist, it is essentially a succession of life estate
3) Created by a conveyance - “to A and the heirs of his body”

32
Q

Life Estate

A

1) Has the potential duration of one or more human lives; measures by the grantee’s life
2)Holder of the life estate is called the life tenant
EX: “O conveys to A for life”
-A, grantee gets an estate for so long as A lives
-On A’s death, the lnd reverts back to O, grantor
3)Life estate pur autre vie(for another life): A life estate can be measured by life of a person person other than the life tenant - who can convey their interest to someone else.
Ex: “O conceys to B for Life of C” -B’s estate is measured by the duration of C’s life

33
Q

Waste

A

A default doctrine that applies in the absence of clear intent regarding the division of rights/responsibilities between the life tenant and remainder ( or reversion) holder

1) AN action brought by the owners of the remainder, against the life tenant, seeking damages and/or injunction b/c they are acting/omitting to act in a manner that properly preserves the property for the remainder holders

Rationale: A should NOT be able to use the property in a manner that reasonably interferes with the expectation of B. Waste avoids use that fails to maximize the value.

1) The grantors intent(use land in a reasonable manner, and improve it)
2) Where 2 or more persons own interest in a land, fairness requires that one shall not damages on the other

Remedies:

1) INJUNCTION: Owner of the remainder may prevent the threatened waste or recover damages
2) DAMAGES: Can be assessed now, pending the determination of actual damages or ascertainment of actual owner.

34
Q

Three types of waste

A

1) Affirmative (Voluntary) Waste
2) Amelio waste
3) Permissive waste

35
Q

Affirmative (voluntary) waste

A

An affirmative act that significantly reduces the value of the property (i.e., demolishing a valuable house)

1.Any voluntary material change in the improvements, or removing improvements, fixtures, timber, or minerals (unless normal use was to deplete those)

36
Q

Ameliorative Waste

A

An affirmative act that leads to a substantial change and increases its value (i.e., building a swimming pool)

  1. Exception: changed circumstances that made the improvements reasonably necessary
  2. Only actionable if: (1) there are changed circumstances; and (2) activity increases the value.
37
Q

Permissive Waste

A

Results from a failure to take reasonable care to protect the estate (i.e., failure to make minor repairs or pay property taxes)

  1. Allowing the property to deteriorate without undertaking the maintenance/making payments that should be allocated to the life tenant
  2. Life tenant is liable for ordinary, regular expenses that are associated
  3. Repairs: only ordinary repairs (not improvements/replacements)
  4. Taxes: all taxes, but only for rents received or the fair rental value
  5. Interest: interest on the mortgage, but a life tenant who places mortgage solely on his/her life estate is liable for both principal and interest.
38
Q

Fee Simple Determinable

A

Automatically ends when a certain event or condition occur, giving the rights of possession to the transferor

1) automatically forfeiture to grantor
2) Duration can be infinite so long as the event/condition doesnt occur
3) Alienable, devisable, and descendible- subject to the given event

Grantors intent controls, but potential identification words are: for long as, while, during until
-Requires clear durational language. Words of desire, Hope

Accompanying Estate that may become possessory estate (future interest)
1)Grantor retains a possibility of reverter

39
Q

Mahrenholz v. County Board school

A

Purpose: Distinction between a defeasible estate: Fee simple determinable v. Fee simple subject to condition subsequent

Facts: Prior owner executed a deed transfer land for a school for only school purposes or revert back to the grantor. Prior owner died, non of her heirs reentered nor have title to transfer

Rule: Deed language granting land for an ambigpous purpose and otherwise reverting the land to the grantor creates a fee simple determinable followed by a possibility revertor

Holding: the deed terminated when the school did not use it for school purposes

Takeaway: Deed language matters(the intent)

40
Q

Metropolitan Park v. Unknown

A

Purpose: Fee simple determinable with within a time

Facts: Rigney conveyed a parcel of land to Tocamoa for the purpose to only use it for conducting water to the city. Stopped using it for water and built a park.

Issue: After a breach of a contract subsequent, does the grantors right to declare forfeiture expire if he fails to exercise it within a reasonable time?

Holding: Grantor must declare forfeiture within a reasonable time

Policy: Prevents reversions many decades later

41
Q

Cole v. Steinlauf

A

Purpose: Is a deed marketable when the language is ambiguous

Facts: Title search revealed that the language of the deed given to D by her predecessor conveyed little to steinlauf and assigns forever but did not include heirs

Issue: Does a deed for real proerty convey marketable title if it does not express state that title runs tot eh grantee and the grantee’s hais

Holding: NO. A deed is not markable when you have to prove the intent of the prior holders intent

Takeaway: Cannot convey land when deed says so otherwise

42
Q

White v. Brown

A

Facts: A drafted will of a fee simple to the P

Rule: When the terms of a will are ambiguous, it should have passed a fee simple absolute

Holding. YES. There was insufficient evidence to indicate an intent to grant an estate less then a fee simple absolute

43
Q

Woodrick v. Wood

A

Purpose: Waste

Facts: Prior owner left his real property to his wife, as a life estate with the property going to his children, after her death. Cathrine wanted to tear down the barn b/c it was old. But daughter disagreed

Issue: May the holder of a remainder interest in a parcel of property prevent the life tenant of that property from destroying a structure?

Rule: Can not prevent it if destroying the property will not decrease the value

Holding. NO. Destroying the property would actually improve the land.

44
Q

Fee simple subject to condition subsequent

A

Created in a transferee that may be terminated at the election of the transferor when a certain event/condition occurs

1) Forfeiture is NOT automatic - grantee retains title untul grantor takes action
2) Duratio can be infinite so long as the event/condiiton does NOT occur
3) Alienable, deviseable and descendible

Grantor’s intent control, but potential identification words are: provided that, but if, on a condition that
-Requires clear durational language that must carve out a right of re-entry (words of desire, hope are insufficent)

Accompanying Estate that may become possessory (FUTURE INTEREST)
1) Right of re-entry: Always follows a fee simple subject to condition subsequent. This future possessory interest can be retained by the transferor (heirs) and cant be created in a transferee.

45
Q

Fee simple subject to executory limitation

A

Created in a transferee that is followed by FUTURE interest in another transferee [held by a third party]

1) AUTOMATIC forfeiture- estate automatically transfers to a third person, not the grantor
2) Duration can be infinite so long as the event/conditon does occur
3) Alienable, devisable and descendible

Grantor intent controls, but potential idenification words are: for so long as, while during, until, provided that, but if, on condition that

Accompanying estate that may become a possessory estate (future interest)
1)Executory interest: the third party holds the shifting executory interest

46
Q

Restraints on alienation

A

Any attempt to restrict free alienation of the property “inconsistent with the incidents and nature of the estate devised and contrary to public policy”
-Applies only when a grantor wants to convey or dispose of property while at the same time retaining control over its alienation ‘

47
Q

Disabling restraints

A

Prevents the transferee from transferring interest “O conveys to B, and any conveyance by B is void”

48
Q

Forfeiture restraint

A

1)Leads to a forfeiture of title if the transferee attempts to transfer interest
2)Forfeited to the grantor or third party
“O conveys to B, but B ever tries to sell the estate, then to D”

49
Q

Promissory Restraints

A

1) A restraint that stipulates that the transferee promises not to transfer interest
Ex: “O conveys to B, B promises that she will not sell the estate”

50
Q

Reversion

A

Default estate that may become possessory estate for grants of an estate smaller than a fee simple

1) Lesser quantum(lesser estate) determined by the present possessory estate hierarchy (fee simple->fee tail->life estate->leasehold)
EX: O have a fee simple and only transfer a life estate to the transferee. O would have a reversion by the operation of law at the death of the transferee

An estate retained by the grantor when he coneys less than what he owns, and when the estate runs out, he gets the rest of it back

Any time the possessory and future interests granted to others do not equal the size of the estate , the grantor retains a reversion

Possibility of reverter- fee simple determinable
right of entry-fee simple subject to subsequent condition

51
Q

Future possessory estates-Created in transferee

A

Three types:

1) Vested remainder(3 kind)
a) Indefeasibly
b) Subject to divestment
c) Subject to open

2) Contingent remainder
3) Executory interest

52
Q

Reaminders

A

An estate that may become possessory in a third person that arises immediately upon the termination of the preceding estate. (Two elements must be met)

1) Possessory upon termination of the prior possessory estate
2) Cannot divest a prior interest

b. Expressly created in the same conveyance in which the preceding estate is created
i. Different than reversions [which are implied]—a reversion doesn’t have to be expressly stated, they arise via operation of law.
ii. Remainders are not implied and do not arise via operation of law.
c. A grantee’s estate that may become possessory estate that waits for a possessory estate to “end naturally”
i. remainder or executory interest ->how does a future interest become possessory? Does it wait politely or cut short another interest?

53
Q

How to classify a remainder

A

After determining the estate that may become possessory

1) Indefeasibly vested remainder
2) Subject to divestment
3) Subject to open

54
Q

Indefeasibly Vested Remainder

A

becomes possessory immediately upon termination of the prior estate

55
Q

Subject to Divestment

A

: according to the words creating it, followed by words stating a condition subsequent

56
Q

Subject to Open

A

class of takers, at least one who is capable of taking possession (by virtue or by being alive)

  1. Open vs. Closed Class: a class remains open to allow for future class members and closes when additional members are impossible.
  2. Rule of convenience: class closes whenever any class member can call for distribution of their share; doesn’t apply if it conflicts with the grantors expressed intent
57
Q

Vested

A
  1. Given to an ascertained person and not subject to a condition precedent
  2. Ascertained person: alive and when they have a name
  3. Condition precedent: a condition that must occur in order for the holder of the interest to be entitled to possess the land; something that must occur before possession
  4. Does NOT mean that the remainder is guaranteed to become possessory
  5. Also used when an interest is possessory (i.e., it is “vested in possession”
58
Q

Contingent Remainders

A

ii. Contingent
1. A remainder that is either: (1) given to an unascertainable person, or (2) subject to a condition precedent, which must be satisfied before the interest becomes possessory.
2. If not vested, contingent
3. Includes remainders in unborn/unascertained takers. Contingent on becoming born or ascertained
4. NOTE: once grantee satisfies the contingency, it automatically becomes an indefeasibly vested remainder
5. Contingent remainders are not certain to become possessory

Ex: To a for life, then to B and his heirs when B gets married”

  • A has a life estate
  • B has a contingent remainder (b/c marriage is condition precedent)
  • Grantor has a reversion in Case B is not married when A dies
59
Q

Jee v. Audley

A

Purpose: Rules against perpetuities

Facts: Audley left the interest of 1000 euros to his wife during her lifetime will. After wife’s death goes to niece mary hall and her issue . If she did not have an issue then divided mon g”daughters then living”

Issue: Under rules against perpretuties, is a bequest that does not vest after a life or lives in being the time of the testor’s death plus21 years valid?

Rule: A bequest that does not vest within a life or lives in being at the time of the testors death plus 21 years is INVALID

Holding. YES.

60
Q

Executory interest

A

An estate that may become possessory estate in a transferee that must divest another estate or interest to become possessory
-Fee simple subject to executory interest=upon the occurrence of the event or condition, estate automatically transfers to a third person

61
Q

Remainders vs. Executory Interest

A

Main difference is how each future interest operates; how each becomes possessory

1) REMAINDERS “Wait politely”
- Wait politely for natural termination of preceding estate in a transferee

2) Executory interest -divest (cut short) another interest
a) Divest the preceding estate in another transferee or in the transferor
b) Shifting executory interest: Cutting short preceding estate in another transferee
- most executory interest are shifting executory interests
c) Springing executory interests: cutting short in the transferor

62
Q

Indefeasibly vested remainder

A

VEsted remainder that becomes possessory immediately upon termination of the prior estate (certain to become a possessory estate)
ex: “ O conveys Greenacre to “A for life, then to B’ Here B holds the indefeasibly vested remainder

63
Q

Vested Remainder Subject to divestment

A

Vested remainder subject to some condition subsequent, such that the remaindermen could be divested after taking posession
Ex: “to A for life, remainder to B; but if B weds, then C”

64
Q

Vested remainder subject to open (Class gift)

A

One who is capable of taking posession

ex: O conveys Greenacre to “b for life, then to D’s children” and time time D has 2 living children, E and F

65
Q

Springing executory interest

A

If an executory interest follows an interest in the transferor

Ex: O conceys Greenacre “to B for life, then one year after B’s death to D and his heirs”

  • B: life estate
  • O regains a fee simple after B’s death. One year later, then D’s estate that may become possessory actually becomes posessory, it will divest O by butting O’s estate short. Accordingly, B has a sringing exectuory interest
66
Q

Shifting Executory interest

A

“O conveys Greenacre to “B and her heirs until humans land on mars, then to D and his heirs”

  • B: fee simple subject to executory limitation
  • D; Shifting Executory limitation. D’s possession immediately follows the end of B’s estate and D can do nothing to cut B’s estate short, so D does not divest B
67
Q

Absolute v. Defeasible Estates

A

When a grantor places a condition on an estate that will cause it to terminate when the condition occurs, the estate is referred to as being “defeasible,” and is subject to qualifications that are not present in an absolute estate.

68
Q

Rules against Perpetuities(RAP)

A

Applies to:

1) Contingent remainders
2) Executory interests
3) Vested remainders subject to open

Does NOT apply:

1) Fee simple absolute; fee simple defeasible; life estate
2) Reversion; possibility of reverter; right of reentry
3) Indefeasibly vested remainder; Vested remainder subject to divestment

Property 1 (7 decks)

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