CHAPTER 5: Estates and Future Interests

Question 1

Freehold estates

How to create a fee simple?

Answer 1

“To B and his heirs” or just “To B”

No future interest accompanies a fee simple

Question 2

Freehold estates

How to create a life estate?

Answer 2

“To B for life” ; “Until B dies” ; “While B is alive”

Pur Autre Vie is a life estate measured by the life of another

Question 3

Freehold estates

What can follow a life estate?

Answer 3

A reversion (if to transferor) or a remainder (if to transferee)

Question 4

Freehold estates

How to create fee tail?

Answer 4

“To B and the heirs of his body”

All states but DE, MA, ME, and RI have banned these

Question 5

Freehold estates

What are the types of fee simple defeasible?

Answer 5

1. Fee simple determinable
2. Fee simple subject to a condition subsequent
3. Fee simple subject to an executory limitation

Question 6

Freehold estates

How to create a fee simple determinable?

Answer 6

By words of duration
1. “as long as”
2. “while”
3. “until”
4. “during”

Question 7

Freehold estates

What kind of future estates can an FSD create in the transferor?

Answer 7

1. Possibility of reverter (automatic)

Question 8

Freehold estates

How to create a fee simple subject to a condition subsequent?

Answer 8

Words of condition
1. provided that
2. but if
3. on condition that
4. The transferor has right to re-enter and reclaim the property

Question 9

Freehold estates

What kind of future estate does a FSSCS create in the transferor?

Answer 9

1. Right of entry (not automatic, transferor must retake or notify by quiet title)

Question 10

Freehold estates

How to create a fee simple subject to an executory limitation?

Answer 10

Future interest can be cut short by a third party
1. so long as
2. while
3. during
4. until
5. provided that
6. but if
7. on condition that

Question 11

Future Interests

What are the future interests that can be held by the transferor?

Answer 11

1. Reversion
2. Possibility of reverter
3. Right of entry

Question 12

Future Interests

What are the future interests that can be created in a transferee?

Answer 12

1. Remainders
2. Executory Interests

Question 13

Future Interests

What are the various types of remainders?

Answer 13

1. Indefeasible vested remainder
2. Vested remainder subject to divestment
3. Vested remainder subject to open
4. Contingent remainder

Question 14

Future Interests

What is required to create an indefeasibly vested remainder?

Answer 14

1. It is created in an ascertainable person
2. It is not subject to a condition precedent (other than the natural termination of the prior estate)

Question 15

Future Interests

How to create a vested remainder subject to divestment?

Answer 15

Interest is ready to become possessory unless a specified event occurs (Ex: to B for life, then to D, but if D does not survive B, then to E)

Question 16

Future Interests

How to create a vested remainder subject to open?

Answer 16

Vested remainder held by one or more members of a class that may enlarge in the future.

Question 17

Future Interests

How to create a contingent remainder?

Answer 17

A remainder that is either
1. Given to an unascertainable person or
2. Subject to a condition precedent

Question 18

Future Interests

What if the wording is vague?

Answer 18

Judges presume that the grantor intended a vested remainder to maximize the marketability of the land

Question 19

Rule against perpetuities

What is the Rule Against Perpetuities?

Answer 19

The rules limits the duration of a contingent interest by providing that is void, unless it must vest or forever fail within 21 years of the death of a life in being

Question 20

Rule against perpetuities

What are the modern reforms to deal with the rule against perpetuities?

Answer 20

1. Wait-and-see;
2. uniform, statutory rule against perpetuities;
3. Cy pres

Question 21

Rule against perpetuities

What is the wait-and-see approach?

Answer 21

The courts wait to see if the valid interest actually vests within the perpetuities. If it does not, then it is void.

Question 22

Rule against perpetuities

What is the USRAP approach?

Answer 22

And interest is valid if it satisfies the common law rule, or if it actually vests within 90 years after its creation

Question 23

Rule against perpetuities

What is the Cy pres approach?

Answer 23

Courts rewrite the language of the conveyance, so that the future interest no longer violates the common law rule.