Estate Law and Future Interests

Question 1

Estate law is concerned with the properties that define (blank)

Answer 1

• Concerned with the properties that define ownership:

Ex. characteristics of time and conditions relating to use; possession and transferability of the land; use of a conveyance of property to control another’s behavior

Question 2

Historical definition of a freehold estate

Answer 2

Created by the livery of seisin and protected by the royal courts in England → Fee simple absolute, defeasible fees, and life estates

Question 3

Historic Definition of Non-freehold estates

Answer 3

not created through the process of livery of seisin and were not granted common law protection until much later. Leaseholds are an example

Question 4

Definition of Alienability

Answer 4

Power to transfer ownership during owner’s lifetime

Question 5

Definition of Heirs

Answer 5

Nearist blood relative at time of death, not knon until then

Question 6

Definition of conveyance

Answer 6

Change in ownership of property

Question 7

Language of Conveyance:
“Words of Purchase”

Answer 7

Identify grantee; Example: “To X”

Question 8

Language of Conveyance

“Words of Purchase”

Answer 8

Describe type of interest conveyed

Example: “and his heirs” or “in fee simple absolute”

Question 9

5 Types of Present Estates

Answer 9

1. Fee Simple Absolute
2. Fee Tail
3. Life Estate
4. Leaseholds
5. Simple Possessory Interest (SPI)

Question 10

Highest/Most complete estate that can be owned

Answer 10

Fee Simple Absolute

Question 11

Fee Simple: used to require the phrase “to X and his heirs” but now many state statutes have relaxed this and assumed fee simple unless (blank)

Answer 11

Unless evidence indicates intent to give less

Question 12

Fee Simple Determinable automatically creates what?

Answer 12

A possibility of reverter

As long as, during, while, unless

Question 13

CL Fee Tail

How was it born?

Whats the De Dondis Statute

Answer 13

Fee simple conditional → 13th cent. ECL allowed conveyances where the ownership was confined to descent within the family;

Lawyers got around by someone owning a fee simple conditional but selling a fee simple absolute.

Result was the De Donis statute and the classic fee tail was born

• Parent cannot convey more than he owns and a reversion interest with failure of issue!

Question 14

Fee Tail

A. If family ran out of “issue” (no more descendants of Sam) the property reverts back to…..

B. (Three) Possibilities when issue runs out:

Answer 14

A. Back to the estate of the original grantor

B. Possibilities when issue runs out:

1. Grantor might be living, possession would revert to him
2. Grantor might not be living, possession would revert to the grantor’s heirs
3. Grantor might have transferred his reversion

Question 15

Modern Fee Tails, What are they today?

In Ohio?

What is the legal effect of fee tails today that were created before the modern law?

Answer 15

Modern Fee Tail: either fee simple or a life estate in first grantee and remainder in fee simple if grantee has issue

O to A and the heirs of her body

We don’t recognize fee tails aymore, now that ^ is just a fee simple

In Ohio, if you create a fee tail today, you create a life estate in A and a reversion in O

These changes in law are only applied prospectively – does not change the effect of any fee tail interest named before the law was created – there are still “fee tails” in existence today

Question 16

Definition of a Life Estate

Answer 16

Possessory interest that terminates upon the death of the measuring life

divides ownership chronologically

Question 17

Life Estates:

Transferability is limited by…..

Answer 17

The measuring life of someone

Question 18

Where the life estate is measured by the lifetime of a person other than the owner of the life estate

Answer 18

Life Estate Pur Autre Vie

Question 19

If the owner of a life estate transfers his interest, what does the grantee recieve?

Answer 19

Life Estate Pur Autre Vie

Question 20

Does a life estate holder have the responsibility to pay mortgage interest and real estate taxes?

Answer 20

Yes, both

Question 21

Doctrine of Waste

What does it apply to?

Answer 21

Life Estates only

Question 22

What is the function of the doctrine of waste?

Answer 22

Ensures use by life tenant does not go beyond their rights

Life tenant has an obligation in every state now to not damage/waste the property

Reversion/remainder interest holder can sue for damages to the property

Question 23

Doctrine of Waste:

What is Voluntary waste and what is the effect of Voluntary waste?

What is Permissive waste

Any permanent alteration = ……

Answer 23

• Voluntary waste: any affirmative act.
Effect: allows for double or treble damages

• Permissive waste: acts of omission; life tenants have an affirmative obligation not to allow damages
• Any permanent alteration = waste

Question 24

Doctrine of Waste:

Is failure to pay property taxes an affirmative act or permissive act?

Answer 24

Considered a permissive act: not acting to care for the estate

Question 25

Life Estate Tenant Rights and Obligations 1. _Estovers_: ok to consume natural fruits? 2. _Emblements_: right to grow and keep crops? 3. _Personal Profits_: yes or no? 4. _Commercial Profits_: yes or no? 5. _Mortgages_: yes or no? 6. _Government Assesments_: yes or no? 7. _Real Estate Taxes_: yes or no? 8. _Insurance_: yes or no?

Answer 25

* _Estovers_: Ok (domestic use only) * _Emblements_: have a right to grow and keep crops • _Personal Profits:_ OK: for domestic use only - If commercial, would be consuming the estate, if sold trees cut down for lumber • _Commercial Profits_: If commercial cannot consume estate Would be consuming the estate if sold trees cut down for lumber * _Mortgages_ OK: obligated to pay interest only. Doesn’t stop bank for foreclosing if someone is not paying principle though * _Government Assesments_: Yes * _Real Estate taxes_: Yes * _Insurance_: No

Question 26

O – A for life with right of absolute disposal and use What type of interest does this entail

Answer 26

• It’s a fee simple from the get go. Can sell it. No reversion left after transfer

Question 27

What is a defeasable fee?

Answer 27

Defeasible Fee: whenever you put a condition on an estate that might cause the estate to terminate i.e. conditions that can terminate estates

Question 28

What are the Three Defeasible Fees

Answer 28

1. Fee Simple Determinable 2. Fee Simple Subject to Condition Subsequent 3. Fee Simple Subject to Executor Limitation

Question 29

_Fee simple determinable_ What kind of condition? When does it end? Creates future interest in who and when? What words create it? What happens when condition is violated?

Answer 29

* Includes condition precedent * Ends automatically upon the happening of an event * Future interest in grantor at time of conveyance “possibility of reverter” in grantor • Created by words indicating the ownership is to last only a certain period of time “during,” “while,” “unless” • When condition is violated, title automatically shifts to holder of the possibility of reverter, and present estate owner is a trespasser on the property

Question 30

_• Fee Simple subject to condition subsequent_ What type of condition? What happens when condition occurs? What interest is created in grantor at time of conveyance?

Answer 30

Type of Condition: subsequent "Provided that.. But if... Upon Condition that...." _When condition occurs two things happen._ (1) allows grantor to reclaim the property but does not automatically regain title, (2) SOL starts. If grantor does nothing to assert her rights (like bring an action in ejectment) the present estate owner will regain ownership by adverse possession Future interest is created in grantor at time of conveyance: "Right of entry" "Power of Termination" • Only when there is a demand to leave does the owner of the right to entry have the right to possession, and only when the present estate owner refuses to leave does she become a trespasser, starting the running of the statute of limitations

Question 31

_Fee simple subject to executor limitation_ 1. What is it 2. Type of condition 3. Who holds future interest (executory interest)

Answer 31

• “Fee simple with/subject to executory limitation in later grantee” If right of entry is given to later grantee, you say the present owner has a fee simple “subject to” executory limitation - "With”: automatic - “Subject to”: possibility of transfer * Can include condition precedent or subsequent * Future interest held by someone other than grantor at time of conveyance “executory interest”

Question 32

Future Interests Does the future interest vest in grantor upon natural termination? What is a reversion?

Answer 32

* If reserved for grantor in conveyance… * Reversion: Future interest created in a grantor that will vest in possession upon natural termination of preceding estate; name stays the same even if ownership of this interest goes to another person

Question 33

Does the future interest vest in grantee upon natural termination? What is a remainder?

Answer 33

* If somebody other than grantor is specified within conveyance… * Remainder: vests in someone other than grantor upon natural termination of the preceding estate

Question 34

What is a contingent remainder? What is always created? What are they subject to

Answer 34

Will vest upon the occurrence of a condition There is ALWAYS a reversion after a contingent remainder Subject to condition precedent OR Owned by an unascertained party OR Both the above

Question 35

If two contingent remainders... - Alternative contingent remainder? Executory Interest?

Answer 35

• 2nd future interest has a condition precedent, but the name depends on the first remainder title - Alternative contingent remainder: Contingent remainder comes first - Executory interest: VRSTCD comes first Definition: Future interest in grantee that will vest in possession by cutting short the preceding estate or destroying the preceding future interest upon some event or condition

Question 36

What happens when interest transfers upon some condition that cuts short preceding estate... In grantor? In grantee? Shifting & Springing.

Answer 36

**In grantor** • Assumption of a possibility of reverter (vests automatically when condition occurs) * Immediately, statute starts to run for adverse possession and trespassing * Express right of re-entry → power of termination (vests after condition occurs and grantor exercises right of re-entry) • Power of termination may not be transferable intervivos, but modern emerging trend is that all future interests are fully transferable **In grantee** • Executory interest – vests upon some condition that cuts short preceding estate • May vest automatically or upon exercise of right of entry (depends on whether state is “with” or “subject to” an executory limitation * Shifting – cuts short grantee’s estate * Springing – cuts short grantor’s estate