CHAPTER 5: Estates and Future Interests Flashcards
Freehold estates
How to create a fee simple?
“To B and his heirs” or just “To B”
No future interest accompanies a fee simple
Freehold estates
How to create a life estate?
“To B for life” ; “Until B dies” ; “While B is alive”
Pur Autre Vie is a life estate measured by the life of another
Freehold estates
What can follow a life estate?
A reversion (if to transferor) or a remainder (if to transferee)
Freehold estates
How to create fee tail?
“To B and the heirs of his body”
All states but DE, MA, ME, and RI have banned these
Freehold estates
What are the types of fee simple defeasible?
- Fee simple determinable
- Fee simple subject to a condition subsequent
- Fee simple subject to an executory limitation
Freehold estates
How to create a fee simple determinable?
By words of duration
1. “as long as”
2. “while”
3. “until”
4. “during”
Freehold estates
What kind of future estates can an FSD create in the transferor?
- Possibility of reverter (automatic)
Freehold estates
How to create a fee simple subject to a condition subsequent?
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
Freehold estates
What kind of future estate does a FSSCS create in the transferor?
- Right of entry (not automatic, transferor must retake or notify by quiet title)
Freehold estates
How to create a fee simple subject to an executory limitation?
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
Future Interests
What are the future interests that can be held by the transferor?
- Reversion
- Possibility of reverter
- Right of entry
Future Interests
What are the future interests that can be created in a transferee?
- Remainders
- Executory Interests
Future Interests
What are the various types of remainders?
- Indefeasible vested remainder
- Vested remainder subject to divestment
- Vested remainder subject to open
- Contingent remainder
Future Interests
What is required to create an indefeasibly vested remainder?
- It is created in an ascertainable person
- It is not subject to a condition precedent (other than the natural termination of the prior estate)
Future Interests
How to create a vested remainder subject to divestment?
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)
Future Interests
How to create a vested remainder subject to open?
Vested remainder held by one or more members of a class that may enlarge in the future.
Future Interests
How to create a contingent remainder?
A remainder that is either
1. Given to an unascertainable person or
2. Subject to a condition precedent
Future Interests
What if the wording is vague?
Judges presume that the grantor intended a vested remainder to maximize the marketability of the land
Rule against perpetuities
What is the Rule Against Perpetuities?
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
Rule against perpetuities
What are the modern reforms to deal with the rule against perpetuities?
- Wait-and-see;
- uniform, statutory rule against perpetuities;
- Cy pres
Rule against perpetuities
What is the wait-and-see approach?
The courts wait to see if the valid interest actually vests within the perpetuities. If it does not, then it is void.
Rule against perpetuities
What is the USRAP approach?
And interest is valid if it satisfies the common law rule, or if it actually vests within 90 years after its creation
Rule against perpetuities
What is the Cy pres approach?
Courts rewrite the language of the conveyance, so that the future interest no longer violates the common law rule.
