Critical Pass - Present and Future Interests

Question 1

What are three categories of present possessory freehold estates?

Answer 1

1. Fee simple absolute
2. Defeasible
3. Life Estate

Question 2

What does it mean for an estate to be devisable?

Answer 2

Capable of passing by will

Question 3

What does it mean for an estate to be descendible?

Answer 3

Capable of passing by statutes of intestacy (no will upon death, like literal will)

Question 4

What does it mean for an estate to be alienable??

Answer 4

Capable of transfer inter vivos (during lifetime)

Question 5

“to A and his heirs” OR “to A”

Answer 5

fee simple absolute

Question 6

What is the duration of the fee simple absolute?

Answer 6

Forever. It is transferable, devisable by will, and descendible through intestacy

Question 7

O conveys “to A” or “to A and his heirs.” A is alive and well. What do A’s heirs have?

Answer 7

Trick Q on the bar: NOTHING ! A living person has no heirs.

Question 8

What does defeasible fees mean?

Answer 8

Fee simples with a condition attached; potentially infinite duration that can be terminated upon the occurrence of some specified event.

(defeasance = forfeiture)

Question 9

What language is required for a defeasible fee?

Answer 9

requires clear words of intent for the fee estate to be forfeited
Words of desire, hope, or aspiration are insufficient

Question 10

three types of defeasible fees:

Answer 10

1) fee simple determinable
2) fee simple subject to condition subsequent
3) fee simple subject to executory interest

Question 11

created by clear durational language such as “to A for so long as…he practices law” to A while…., during, until..”

Answer 11

Fee simple determinable

Question 12

When does a fee simple determinable terminate?

Answer 12

Automatically on happening of stated event/ condition

Question 13

Is fee simple determinable devisable, descendible, alienable?

Answer 13

Yes

Question 14

Testing point: If the stated condition of a fee simple determinable is violated…

Answer 14

forfeiture is automatic

Question 15

what accompanies a fee simple determinable

Answer 15

possibility of reverter (grantor retains a possibility of reverter) but only if the condition occurs.

Question 16

FSDPOR

Answer 16

Fee Simple Determinable Possibility of reverter

Frank Sinatra did not prefer Orville Redenbacher.

Question 17

“to A, but if he wins the lottery, grantor reserves the right to reenter and retake”

Answer 17

Fee simple subject to condition subsequent

Question 18

How to create a fee simple subject to condition subsequent:

Answer 18

1. “but if,” “upon condition that,” “provided
   that” AND
2. 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)

Question 19

the right to reenter + retake is synonymous to.. (fee simple subject to condition subsequent)

Answer 19

power of termination

Question 20

When is fee simple subject to condition subsequent terminated?

Answer 20

No automatic termination (grantor’s CHOICE)

Not automatically forfeited. Grantor must exercise its option to terminate.

Question 21

When you see a mix of a fee simple defeasible, and fee simple subject to condition subsequent, default to…

Answer 21

a fee simple subject to condition subsequent bc there is no automatic forfeiture. termination is the grantor’s choice.

Question 22

In most states, for a fee simple subject to condition subsequent, grantor’s right of entry is not….. but is …….

Answer 22

transferable inter vivos

but is devisable by will and descendible to grantor’s intestate heirs

Question 23

what is a fee simple subject to executory interest

Answer 23

a fee simple that automatically transfers to a 3rd party upon the happening of a given event or condition

Question 24

To A, but if A is ever arrested, then to B

Answer 24

Fee simple to Executory Interest - “then to B” third party stands to take if the condition is betrayed.

Question 25

How will you know if its a fee simple subject to executory interest?

Answer 25

Third party takes if condition does not happen

Question 26

For a fee simple subject to an executory interest, the occurrence of the event or condition will result in what?

Answer 26

automatic transfer to third party

Question 27

Is a fee simple subject to executory interest alienable, devisable, and descendible?

Answer 27

yes all of then subject to the occurrence of the condition

Question 28

what is the accompanying future interest for a fee simple subject to executory interest?

Answer 28

shifting executory interest that a third party holds.

Question 29

in a fee simple subject to executory interest, is the third party’s interest alienable, devisable, and descendible?

Answer 29

YES ALL OF THE ABOVE.

Question 30

Words of mere desire, hope, intent do not create a … they create a…

Answer 30

They don’t create a defeasible fee, they create a fee simple absolute

Question 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.”

Answer 31

Fee simple absolutes!

Question 32

absolute bans on power to sell/transfer is…

Answer 32

void (violates public policy bc we favor free interest of land)

Question 33

“to A so long as she never attempts to sell”

Answer 33

Language of condition is strucken, so there is just a fee simple absolute (“to A”)

the condition is void, absolute restraint on alienation.

Question 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.”

Answer 34

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

Question 35

Generally, conditions that penalize marriage or encourage divorce, are typically…

Answer 35

struck down unless the purpose is to give support until marriage or in the event divorce (it will be upheld)

Question 36

what is a life estate?

Answer 36

an interest that lasts only for the life of the interest holder?

Question 37

How must a life estate be measured?

Answer 37

In lifetime terms (not in term of years)

Question 38

“to A for life”

Answer 38

Life estate
A would be known as the “life tenant”

Question 39

what is the accompanying future interest to a life estate?

Answer 39

reversion or remainder

Question 40

when is the accompanying future interest a reversion or remainder for a life estate?

Answer 40

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)

Question 41

O “to A for life” - what does O have?

Answer 41

A is the LT, O has a reversion (i.e., property reverts back to O when A dies)

Question 42

O “to A for life, then to B”; - what does B have?

Answer 42

A is the LT, B has a remainder (i.e., when A dies, property goes to B)

Question 43

“to A for 50 years, if she lives that long.”
“to A for life, but in no event more than 10 years.”

Answer 43

NOT life estates! Must be measured in explicit lifetime terms.

Both of these examples create a term of years (leasehold interest).

Question 44

what is a life estate put autre vie?

Answer 44

“to Madonna, for the life of David letterman”

a life estate measured by a life other than the grantee’s

Question 45

O grants “To A for the life of B”

Answer 45

A is the LT, holding the property until B dies, at which point property reverts back to O

Question 46

If a future interest is held by third party, someone other than O, it is called a

Answer 46

remainder

Question 47

Life tenant is entitled to all

Answer 47

ordinary uses and profits from the land

Question 48

Life tenant must not commit waste. What are the 3 types:

Answer 48

1. voluntary (actual waste)
2. permissive (failure to take reasonable measures/neglect)
3. amerliorative (unilateral change that enhances value)

Question 49

A life tenant depleting a property’s natural resources could typically constitute

Answer 49

voluntary waste

Question 50

VOLUNTARY WASTE: exploitation of natural resources by a life tenant is generally allowed in situations where

Answer 50

1. necessary for repair
2. land is suitable only for exploitation (peach groves)
3. grantor consented

Question 51

what is the open mines doctrine as it relates to life estates and waste?

Answer 51

if exploitation occurred before the life estate, LT may only extract from already-open mines

Question 52

permissive waste occurs when the life tenant fails to comply? what does this include?

Answer 52

with their duties (ex. neglecting the land)

Includes paying taxes, interest on encumbrances, etc.

Question 53

what 3 things does a life tenant have to pay?

Answer 53

1. ordinary taxes
2. interest on mortgages and
3. pay special assessment for public improvements of short duration

Question 54

A change that benefits the property economically

Answer 54

Ameliorative waste

Question 55

Ameliorative waste is prohibited under…….. but allowed under….

Answer 55

prohibited under common law, but now allowed in most modern jurisdictions

Question 56

We allowing the tenant may alter or even demolish existing buildings if:

Answer 56

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.

Question 57

3 types of future interests in grantor

Answer 57

1) possibility of reverter; 2) right of entry/power of termination, 3) reversion

Question 58

What future interest in grantor accompanies fee simple determinable

Answer 58

possibility of reverter

Question 59

What future interest in grantor accompanies fee simple subject to condition subsequent

Answer 59

Right of entry/power of termination in O grantor

Question 60

What future interests in grantor accompanies when grantor conveys estate of lesser duration

Answer 60

reversion

Question 61

If a future interest Is held by someone other than the grantor, it has to be either:

Answer 61

1) contingent remainder; or
2) vested remainder
3) executory interest

Question 62

A remainder is a

Answer 62

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)

Question 63

why can remainder never follow a fee simple estate?

Answer 63

fee simple estates are potentially of infinite duration

Question 64

remainder always tags along with

Answer 64

1. life estate
2. term of years

Question 65

To A for life, then to B. who is A? Who is B?

Answer 65

A = life tenant; B = remainder man

Question 66

remainders are either 1 of 2 types:

Answer 66

1) contingent
2) vested

Question 67

what is a vested remainder

Answer 67

remainder that automatically becomes possessory upon the natural expiration of the preceding estate

Question 68

3 types of vested remainders

Answer 68

1) indefeasibly vested remainders
2) vested remainder subject to total divestment
3) vested remainder subject to open (class gift)

Question 69

contingent remainders arise if:

Answer 69

1) there is a condition precedent
2) the future interest vests in an unascertained taker;

Question 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?

Answer 70

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.

Question 71

“to A for life, then to B’s heirs” What does B have?

Answer 71

contingent remainder bc heirs of B cannot be ascertained until B dies.

Question 72

a remainder can be contingent to what 2 things

Answer 72

may be contingent as to person or as to event

Question 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.

Answer 73

Contingent. no children yet

Question 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?

Answer 74

B - contingent remainder
O - reversion

B’s contingent remainder is transformed into an indefeasibly vested remainder.

Question 75

At common law, contingent remainders were

Answer 75

abolished (so likely a wrong answer choice)

Question 76

under the rule of destructibility at common law, what happens?

Answer 76

a contingent remainder is destroyed if it remains contingent (condition is never satisfied) when the preceding estate never happens.

Question 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?

Answer 77

B gets nothing upon A’s death.
Modern rule: reversion to grantor or grantor’s estate until grantee satisfies the condition

Question 78

the Rule in Shelley’s case (rule against remainders in grantee’s heirs AND the destructibility of contingent remainders doctrine have been…

Answer 78

destroyed/abolished

Question 79

what is a vested remainder?

Answer 79

One created in an existing and ascertained person, no strings attached

Question 80

Vested remainders can NOT be subject to

Answer 80

a condition precedent OR vest in an unknown or ascertained person

Question 81

What are the 3 vests that the remainder man can wear? (vested remainder)

Answer 81

1. Indefeasibly vested remainder
2. vested subject to condition subsequent (string attached) - vested subject to complete defeasance
3. vested remainder subject to open

Question 82

“To A for life, remainder to B.” A is alive. B is alive.

Answer 82

B has an indefeasibly vested remainder
Why? because B is alive.

Question 83

What type of vested remainder has no strings attached/condition?

Answer 83

Indefeasibly vested remainder

Question 84

to A for life, remainder to children of B and their heirs” B has one child.

Answer 84

B has one child, who has a vested remainder subject to open (b/c B may have more children)

Question 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?

Answer 85

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

Question 86

what is a vested remainder subject to open

Answer 86

Class of takers, at least one already qualified to take

Question 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?

Answer 87

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)

Question 88

for vested remainders subject to open, when does a class close?

Answer 88

class closes whenever any member can call for distribution of her share; after-born class members get nothing (rule of convenience)

Question 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?

Answer 89

At B’s death, and A’s death (rule of convenience)

Question 90

what is an executory interest?

Answer 90

A future interest in a 3rd party that takes effect by cutting short some intent.

Question 91

2 types of executory interests

Answer 91

1. shifting
2. springing

Question 92

A SHIFTING executory interest always follows.. and…

Answer 92

a defeasible fee or vested remainder subject to total diverstment

and cuts short someone other than the grantor

Question 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?

Answer 93

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)

Question 94

Executory interests take effect by

Answer 94

cutting short someone other than grantor

Question 95

“To A, but if B returns from Canada, to B and his heirs.”

What does B have?
What does A have?

Answer 95

“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

Question 96

the shifting executory interest is rude because

Answer 96

it cuts off the preceding defeasible fee holder!

To A but if B returns from Canada, to B.

Question 97

If not a shifting executory interest, it is a …

Answer 97

springing executory interest

Question 98

What is a springing executory interest versus a shifting executory interest?

Answer 98

springing: cuts short grantor or grantor’s estate
shifting: cuts short someone other than grantor

Question 99

“to A, if and when he gets married

what does A have? what about grantor?

Answer 99

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

Question 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?

Answer 100

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

Question 101

What does the rule of perpetuities do?

Answer 101

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

Question 102

4 step technique for Rule against Perp. Q’s

Answer 102

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?

Question 103

STEP 1: RAP is applicable ONLY to what 3 interests?

Answer 103

1) contingent remainders
2) executory interests
3) certain vested reminders subject to open

Question 104

Step 2: what does the future interest holder take? WHAT QUESTIONS ARE YOU LOOKING FOR

Answer 104

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

Question 105

STEP 3 RAP: Find the measuring life. What are you looking for?

Answer 105

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.

Question 106

STEP 4 RAP: when will we know if future interest holder can take? What question to determine?

Answer 106

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.

Question 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?

Answer 107

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

Question 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?

Answer 108

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)

Question 109

RAP allows for a ____ year grace period

Answer 109

21

Question 110

What interest always violates RAP (commonly tested)

Answer 110

Executory interest with no time limit imposed for when it’ll vest (too perpetual, void under RAP)

Question 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?

Answer 111

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)

Question 112

RAP has been reformed bc it can be so annoying. What is the pricinple reform effort?

Answer 112

wait and see

Question 113

what does the wait and see doctrine state?

Answer 113

the validity of any suspect future interest is determined as they exist at the conclusion of the measuring life (we just wait and see)

Question 114

the uniform statutory rule against perp does what?

Answer 114

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)

Question 115

Both wait and see and USRAP incorporate what doctrine?

Answer 115

cy pres

Question 116

What does cy pres say?

Answer 116

Court can redraft “as near as possible” to grantor’s intent

Question 117

To A so long as she never attempts to sell.

Is this permitted?

Answer 117

No this is a disabling restraint (absolute ban on transfer) which is void. ABSOLUTE BAN = VOID

Question 118

Types of restraints: Forfeiture. what is it/is it allowed

Answer 118

Forfeiture restraints = attempted transfer forfeits interest

Valid if reasonable/time limited

Question 119

Types of restraints: promissory

Are they allowed?

Answer 119

promissory restraints = attempted transfer breaches covenant

Valid if reasonable/time limited

Question 120

Types of restraints: Discriminatory

what is it/are they allowed?

Answer 120

Based on race, religion, ethnicity

VOID

Question 121

RAP does NOT apply to conveyances from…… to…

Answer 121

from one charity to another (charity to charity exception)