Critical Pass - Present and Future Interests Flashcards
1
Q
What are three categories of present possessory freehold estates?
A
- Fee simple absolute
- Defeasible
- Life Estate
2
Q
What does it mean for an estate to be devisable?
A
Capable of passing by will
3
Q
What does it mean for an estate to be descendible?
A
Capable of passing by statutes of intestacy (no will upon death, like literal will)
4
Q
What does it mean for an estate to be alienable??
A
Capable of transfer inter vivos (during lifetime)
5
Q
“to A and his heirs” OR “to A”
A
fee simple absolute
6
Q
What is the duration of the fee simple absolute?
A
Forever. It is transferable, devisable by will, and descendible through intestacy
7
Q
O conveys “to A” or “to A and his heirs.” A is alive and well. What do A’s heirs have?
A
Trick Q on the bar: NOTHING ! A living person has no heirs.
8
Q
What does defeasible fees mean?
A
Fee simples with a condition attached; potentially infinite duration that can be terminated upon the occurrence of some specified event.
(defeasance = forfeiture)
9
Q
What language is required for a defeasible fee?
A
requires clear words of intent for the fee estate to be forfeited
Words of desire, hope, or aspiration are insufficient
10
Q
three types of defeasible fees:
A
1) fee simple determinable
2) fee simple subject to condition subsequent
3) fee simple subject to executory interest
11
Q
created by clear durational language such as “to A for so long as…he practices law” to A while…., during, until..”
A
Fee simple determinable
12
Q
When does a fee simple determinable terminate?
A
Automatically on happening of stated event/ condition
13
Q
Is fee simple determinable devisable, descendible, alienable?
A
Yes
14
Q
Testing point: If the stated condition of a fee simple determinable is violated…
A
forfeiture is automatic
15
Q
what accompanies a fee simple determinable
A
possibility of reverter (grantor retains a possibility of reverter) but only if the condition occurs.
16
Q
FSDPOR
A
Fee Simple Determinable Possibility of reverter
Frank Sinatra did not prefer Orville Redenbacher.
17
Q
“to A, but if he wins the lottery, grantor reserves the right to reenter and retake”
A
Fee simple subject to condition subsequent
18
Q
How to create a fee simple subject to condition subsequent:
A
- “but if,” “upon condition that,” “provided
that” AND - explicit statement of grantor’s right to reenter
to A, but if X event occurs, grantor reserves
the right to re-enter and retake (power of termination)
19
Q
the right to reenter + retake is synonymous to.. (fee simple subject to condition subsequent)
A
power of termination
20
Q
When is fee simple subject to condition subsequent terminated?
A
No automatic termination (grantor’s CHOICE)
Not automatically forfeited. Grantor must exercise its option to terminate.
21
Q
When you see a mix of a fee simple defeasible, and fee simple subject to condition subsequent, default to…
A
a fee simple subject to condition subsequent bc there is no automatic forfeiture. termination is the grantor’s choice.
22
Q
In most states, for a fee simple subject to condition subsequent, grantor’s right of entry is not….. but is …….
A
transferable inter vivos
but is devisable by will and descendible to grantor’s intestate heirs
23
Q
what is a fee simple subject to executory interest
A
a fee simple that automatically transfers to a 3rd party upon the happening of a given event or condition
24
Q
To A, but if A is ever arrested, then to B
A
Fee simple to Executory Interest - “then to B” third party stands to take if the condition is betrayed.
25
How will you know if its a fee simple subject to executory interest?
Third party takes if condition does not happen
26
For a fee simple subject to an executory interest, the occurrence of the event or condition will result in what?
automatic transfer to third party
27
Is a fee simple subject to executory interest alienable, devisable, and descendible?
yes all of then subject to the occurrence of the condition
28
what is the accompanying future interest for a fee simple subject to executory interest?
shifting executory interest that a third party holds.
29
in a fee simple subject to executory interest, is the third party's interest alienable, devisable, and descendible?
YES ALL OF THE ABOVE.
30
Words of mere desire, hope, intent do not create a ... they create a...
They don't create a defeasible fee, they create a fee simple absolute
31
"to A for the purpose of constructing a day care center"
"to A with the hope that he becomes a lawyer"
"to A with the expectation that the premises will be used as a hardware store."
Fee simple absolutes!
32
absolute bans on power to sell/transfer is...
void (violates public policy bc we favor free interest of land)
33
"to A so long as she never attempts to sell"
Language of condition is strucken, so there is just a fee simple absolute ("to A")
the condition is void, absolute restraint on alienation.
34
O conveys: “To A so long as she does not attempt to sell until the year ____, when clouds on the title will be resolved.”
Here, restraint is not absolute or infinite. This is not a confined duration that is limitless.
A has a fee simple determinable, and O has the possibility of reverter
35
Generally, conditions that penalize marriage or encourage divorce, are typically...
struck down unless the purpose is to give support until marriage or in the event divorce (it will be upheld)
36
what is a life estate?
an interest that lasts only for the life of the interest holder?
37
How must a life estate be measured?
In lifetime terms (not in term of years)
38
"to A for life"
Life estate
A would be known as the "life tenant"
39
what is the accompanying future interest to a life estate?
reversion or remainder
40
when is the accompanying future interest a reversion or remainder for a life estate?
Reversion—future interest in grantor when a life estate does not provide for disposition of property to a third party
Remainder—future interest following a life estate that identifies a third person (i.e., the third party has a remainder)
41
O “to A for life” - what does O have?
A is the LT, O has a reversion (i.e., property reverts back to O when A dies)
42
O “to A for life, then to B”; - what does B have?
A is the LT, B has a remainder (i.e., when A dies, property goes to B)
43
"to A for 50 years, if she lives that long."
"to A for life, but in no event more than 10 years."
NOT life estates! Must be measured in explicit lifetime terms.
Both of these examples create a term of years (leasehold interest).
44
what is a life estate put autre vie?
"to Madonna, for the life of David letterman"
a life estate measured by a life other than the grantee's
45
O grants “To A for the life of B”
A is the LT, holding the property until B dies, at which point property reverts back to O
46
If a future interest is held by third party, someone other than O, it is called a
remainder
47
Life tenant is entitled to all
ordinary uses and profits from the land
48
Life tenant must not commit waste. What are the 3 types:
1. voluntary (actual waste)
2. permissive (failure to take reasonable measures/neglect)
3. amerliorative (unilateral change that enhances value)
49
A life tenant depleting a property's natural resources could typically constitute
voluntary waste
50
VOLUNTARY WASTE: exploitation of natural resources by a life tenant is generally allowed in situations where
1. necessary for repair
2. land is suitable only for exploitation (peach groves)
3. grantor consented
51
what is the open mines doctrine as it relates to life estates and waste?
if exploitation occurred before the life estate, LT may only extract from already-open mines
52
permissive waste occurs when the life tenant fails to comply? what does this include?
with their duties (ex. neglecting the land)
Includes paying taxes, interest on encumbrances, etc.
53
what 3 things does a life tenant have to pay?
1. ordinary taxes
2. interest on mortgages and
3. pay special assessment for public improvements of short duration
54
A change that benefits the property economically
Ameliorative waste
55
Ameliorative waste is prohibited under........ but allowed under....
prohibited under common law, but now allowed in most modern jurisdictions
56
We allowing the tenant may alter or even demolish existing buildings if:
1. change cannot adversely effect market value for future interests
2. future interest holders dont object; OR
3. property is useless until particular change at issue occurs.
57
3 types of future interests in grantor
1) possibility of reverter; 2) right of entry/power of termination, 3) reversion
58
What future interest in grantor accompanies fee simple determinable
possibility of reverter
59
What future interest in grantor accompanies fee simple subject to condition subsequent
Right of entry/power of termination in O grantor
60
What future interests in grantor accompanies when grantor conveys estate of lesser duration
reversion
61
If a future interest Is held by someone other than the grantor, it has to be either:
1) contingent remainder; or
2) vested remainder
3) executory interest
62
A remainder is a
future interest in a third person that can become possessory on the natural expiration of the preceding estate (ex. life estate or term of years)
63
why can remainder never follow a fee simple estate?
fee simple estates are potentially of infinite duration
64
remainder always tags along with
1. life estate
2. term of years
65
To A for life, then to B. who is A? Who is B?
A = life tenant; B = remainder man
66
remainders are either 1 of 2 types:
1) contingent
2) vested
67
what is a vested remainder
remainder that automatically becomes possessory upon the natural expiration of the preceding estate
68
3 types of vested remainders
1) indefeasibly vested remainders
2) vested remainder subject to total divestment
3) vested remainder subject to open (class gift)
69
contingent remainders arise if:
1) there is a condition precedent
2) the future interest vests in an unascertained taker;
70
to A for life, then to B and his heirs when B gets married” If B is unmarried at the time of the conveyance, what does B have? A? O?
A: life estate
B: contingent remainder (bc marriage is the condition precedent)
note that grantor also has the reversion in case B is not married when A dies.
71
“to A for life, then to B’s heirs” What does B have?
contingent remainder bc heirs of B cannot be ascertained until B dies.
72
a remainder can be contingent to what 2 things
may be contingent as to person or as to event
73
What type of remainder: O conveys to A for life, then to B's first child. A is alive. B has no children yet.
Contingent. no children yet
74
To A for life, then if B graduates from college, to B. A is alive. B is now in high school. Before B can take, he must graduate from
college. He has not yet satisfied this condition precedent.
-What does B have?
What does O have?
What if B graduates from college during A's lifetime?
B - contingent remainder
O - reversion
B's contingent remainder is transformed into an indefeasibly vested remainder.
75
At common law, contingent remainders were
abolished (so likely a wrong answer choice)
76
under the rule of destructibility at common law, what happens?
a contingent remainder is destroyed if it remains contingent (condition is never satisfied) when the preceding estate never happens.
77
O grants “to A for life, then to B once he goes to law school”; A dies and B has not gone to law school. What happens under the rule of destructibility? what is the modern rule?
B gets nothing upon A's death.
Modern rule: reversion to grantor or grantor's estate until grantee satisfies the condition
78
the Rule in Shelley's case (rule against remainders in grantee's heirs AND the destructibility of contingent remainders doctrine have been...
destroyed/abolished
79
what is a vested remainder?
One created in an existing and ascertained person, no strings attached
80
Vested remainders can NOT be subject to
a condition precedent OR vest in an unknown or ascertained person
81
What are the 3 vests that the remainder man can wear? (vested remainder)
1. Indefeasibly vested remainder
2. vested subject to condition subsequent (string attached) - vested subject to complete defeasance
3. vested remainder subject to open
82
“To A for life, remainder to B.” A is alive. B is alive.
B has an indefeasibly vested remainder
Why? because B is alive.
83
What type of vested remainder has no strings attached/condition?
Indefeasibly vested remainder
84
to A for life, remainder to children of B and their heirs” B has one child.
B has one child, who has a vested remainder subject to open (b/c B may have more children)
85
O conveys: “To A for life, then to B, provided, however, that if B dies under the age of 25, to C.” A is alive. B is 20 years old.
What does A have?
What does B have?
What does C have?
A = life estate
B= vested remainder subject to total divestment (vested bc B exists, not waiting for him to be born)
C = shifting executory interest
86
what is a vested remainder subject to open
Class of takers, at least one already qualified to take
87
“To A for life, then to B’s children.” A is alive. B has two children, C and D.
What do C and D have?
C and D = vested remainders subject to open
they are a category/group of takers, 2 of whom are already qualified to take (they exist)
88
for vested remainders subject to open, when does a class close?
class closes whenever any member can call for distribution of her share; after-born class members get nothing (rule of convenience)
89
Ex. “To A for life, then to B’s children.” A is alive. B has two children, C and D. When does the class close?
At B's death, and A's death (rule of convenience)
90
what is an executory interest?
A future interest in a 3rd party that takes effect by cutting short some intent.
91
2 types of executory interests
1. shifting
2. springing
92
A SHIFTING executory interest always follows.. and...
a defeasible fee or vested remainder subject to total diverstment
and cuts short someone other than the grantor
93
“to A, so long as the property is used for storage. But if used for any other purpose, to B”
what does A have? what about B?
A has a fee simple subject to an executory interest
B has a shifting executory interest—if A stops using the property for storage, A’s interest is cut short (not grantor’s)
94
Executory interests take effect by
cutting short someone other than grantor
95
“To A, but if B returns from Canada, to B and his heirs.”
What does B have?
What does A have?
"to A" - fee simple
B - shifting executory interest (if B returns, he cuts off As time with the land, hes rude)
A - fee simple subject to Bs shifting executory interest
96
the shifting executory interest is rude because
it cuts off the preceding defeasible fee holder!
To A but if B returns from Canada, to B.
97
If not a shifting executory interest, it is a ...
springing executory interest
98
What is a springing executory interest versus a shifting executory interest?
springing: cuts short grantor or grantor's estate
shifting: cuts short someone other than grantor
99
“to A, if and when he gets married
what does A have? what about grantor?
A has an executory interest
Grantor has a fee simple subject to an executory interest; if A gets married, possession springs from grantor to A
100
O conveys: “To A, if and when she becomes a lawyer.” A is in high school.
What does A have?
Why?
What does O have?
A - springing executory interest (if A becomes a lawyer, she cuts off Os time with the land)
O - fee simple subject to As springing exec. interest
101
What does the rule of perpetuities do?
provides that certain future interests are void if there's any possibility they might vest more than 21 years after the death of the measuring life
102
4 step technique for Rule against Perp. Q's
1) determine the future interest
2) what has to happen for future interest holder to take?
3) find measuring life
4) when will we know if future interest holder can take?
103
STEP 1: RAP is applicable ONLY to what 3 interests?
1) contingent remainders
2) executory interests
3) certain vested reminders subject to open
104
Step 2: what does the future interest holder take? WHAT QUESTIONS ARE YOU LOOKING FOR
Does a holder of the previous estate need to die? Does a previous holder need to have a kid? What condition needs to be met
105
STEP 3 RAP: Find the measuring life. What are you looking for?
people alive at the date of the conveyance whose lives and/or deaths are relevant to what has to happen for the future interest holder to take.
106
STEP 4 RAP: when will we know if future interest holder can take? What question to determine?
determine whether we’ll know for sure within 21 years of the death of a measuring life if the future interest holder(s) can take
If yes - Then RAP says ok.
If no/we wont know - future interest is void.
107
RAP HYPO: “To A for life, then to A’s children.” A is alive. She has no children.
Step one: What is the future interest?
Step two: What has to happen for the future interest holder to take?
Step three: Find a measuring life. Whose life and/or death is relevant to what has to happen for the future interest holder to take?
Step four: Will we know within 21 years of the death of that measuring life whether there will be someone eligible to take?
1: A/children have a contingent remainder
2: she has to have children
3: A is the measuring life (she has to die and have a child)
4: Yes we will know at the moment of As death whether she had a child or not. The uncertainty will not last in perpetuity. We will have a dispositive Q to that answer
108
RAP HYPO: O conveys “To A for life, and if B becomes a veterinarian, to B.” A is alive. B is 9 years old.
Step one: What is the future interest?
Why?
Step two: What has to happen for the future interest holder to
take?
Step three: Find a measuring life. Whose life is relevant to what
has to happen for the future interest holder to take?
Step four: Will we know within 21 years of the measuring life’s
death if he is qualified to take?
1: B has a contingent remainder because it follows a life estate (patient remainder man). Also, remainder is subject to a condition precedent
2: B has to become a veteranarian to take
3: B is exclusively in charge of whether he becomes a vet or not. B is measuring life
4: yes we will know at the moment of Bs death whether or not she became a veteranrian (will not last in perpetuity)
109
RAP allows for a ____ year grace period
21
110
What interest always violates RAP (commonly tested)
Executory interest with no time limit imposed for when it'll vest (too perpetual, void under RAP)
111
“To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs.”
What does B have?
Who has the measuring life?
Does this violate RAP?
B has a shifting exec. interest because it follows a defeasible fee and will cut short someone other than grantor
- A is the measuring life bc she is the one in control
- Yes violates because we cant assure ourselves because A could abide by the condition for her whole life. RAP says not allowed bc it is a perpetual condition (future is STRICKEN)
112
RAP has been reformed bc it can be so annoying. What is the pricinple reform effort?
wait and see
113
what does the wait and see doctrine state?
the validity of any suspect future interest is determined as they exist at the conclusion of the measuring life (we just wait and see)
114
the uniform statutory rule against perp does what?
Codifies the CL RAP and provides for an alternative 90-year vesting period (whether we will know who will take within 90 years of date of grants creation)
115
Both wait and see and USRAP incorporate what doctrine?
cy pres
116
What does cy pres say?
Court can redraft "as near as possible" to grantor's intent
117
To A so long as she never attempts to sell.
Is this permitted?
No this is a disabling restraint (absolute ban on transfer) which is void. ABSOLUTE BAN = VOID
118
Types of restraints: Forfeiture. what is it/is it allowed
Forfeiture restraints = attempted transfer forfeits interest
Valid if reasonable/time limited
119
Types of restraints: promissory
Are they allowed?
promissory restraints = attempted transfer breaches covenant
Valid if reasonable/time limited
120
Types of restraints: Discriminatory
what is it/are they allowed?
Based on race, religion, ethnicity
VOID
121
RAP does NOT apply to conveyances from...... to...
from one charity to another (charity to charity exception)
