Estates, Future Interests and RAP

Question 1

Fee Simple Absolute

Answer 1

A Fee Simple Absolute is an interest in land where the land is owned completely, without any limitations or conditions.

Question 2

Life Estate

Answer 2

A life estate is a present estate that lasts for the duration of the grantee’s life.
Life estate is freely transferrable during the life of the grantee, but the estate is not devisable or descendible.
Companies cannot hold life estates.
A Life Estate Pur Autre Vie is
O convey “to G for the life of H”
O conveys “to G for as long as H lives.”
O conveys “to G for the life of G’s only child H”
O conveys “to G for life” then G conveys her interest to H

Question 3

Fee Tail

Answer 3

To “A and the heirs of his body.”
An owner could keep land within the family for generations
Almost extinct in the United States (except Delaware, Maine, Massachusetts & Rhode Island)

Question 4

Fee Simple Determinable

Answer 4

A Fee Simple Determinable is an estate that will automatically terminate when a certain event or condition occurs or fails to occur. It uses durational language like ‘so long as’, ‘while’ ‘until’ ‘during’.
It is freely alienable, devisable and descendible. The grantor retains a possibility of reverter.
For example: To A for as long as the property is used for a museum.

Question 5

Fee Simple Subject to a Condition Subsequent

Answer 5

A Fee Simple Subject to a Condition Subsequent is a present possessory estate that may terminate upon the occurrence or nonoccurrence of a stated future event. The grantor retains a right to reenter and reclaim the property. It is freely alienable, devisable and descendible. Uses words like provided that, on the condition that, but if, however if, provided however that

Question 6

Fee Simple Subject to an Executory Limitation

Answer 6

A Fee Simple Subject to an Executory Limitation is a present possessory estate that is followed by a future interest in a third party. The grantor does NOT retain a future interest, which is why the FSSEL is differentiated from the FSD and the FSSCS.
To April and her heirs as long as liquor is never sold on the premises, and if so, then to Ron and his heirs.
O conveys “to G and her heirs on the condition that Alaska does not secede from the United States, then to M and her heirs.”

Question 7

In a transfer by deed, what is the transaction called?

Answer 7

A conveyance or a grant.

Question 8

In a transfer by deed, who are the two parties?

Answer 8

Person who makes transfer: grantor

Recipient: grantee

Question 9

In a transfer by will, what is the transaction called?

Answer 9

Devise

Question 10

In a transfer by will, what is the verb?

Answer 10

Devise

Question 11

In a transfer by will, who are the parties?

Answer 11

Person who wrote the will = testator

Person who receives the property = devisee

Question 12

In a transfer by intestate succession (no will) what is the verb used to describe the transaction and what is the recipient called?

Answer 12

Descend;

Heir.

Question 13

If you have no will and no heirs, what happens to your property?

Answer 13

It escheats to the State.

Question 14

Can a company hold a Fee Simple Absolute?

Answer 14

Yes. You can devise your land to a company. However, you cannot give a company a Life Estate, because companies have no lives.

Question 15

What are some examples of Life Estates Pur Aurtre Vie?

Answer 15

O convey “to G for the life of H”
O conveys “to G for as long as H lives.”
O conveys “to G for the life of G’s only child H”
O conveys “to G for life” then G conveys her interest to H

Question 16

What is the rule of waste and what type of estate does it apply to?

Answer 16

The doctrine of waste protects the value of future interests by limiting the present possessor’s ability to expend, or waste, the inherent value of the property.

Question 17

What are the three types of waste?

Answer 17

• Voluntary waste
• Permissive waste
• Ameliorative waste

Question 18

What is voluntary waste?

Answer 18

Voluntary waste occurs when there is an affirmative act that significantly reduces the value of the property.

Question 19

What is permissive waste?

Answer 19

Permissive waste happens when there is a failure to take reasonable care to protect the estate.

Question 20

What is ameliorative waste?

Answer 20

Ameliorative waste that occurs when there is an affirmative act that substantially changes the property in a way that increases its value but without the permission of the future interest holders.

You say “Alicia committed ameliorative waste on Twilightacre.”

Question 21

What is a restraint on alienation?

Answer 21

A restraint on alienation is any attempt to unreasonably prohibit the ability to transfer or sell property.

Question 22

What is a forfeiture restraint?

Answer 22

A forfeiture restraint is a restraint for which if the transferee attempts to transfer or sell the property they will forfeit their rights to the property. A court will invalidate any language that provides a forfeiture restraint.
O conveys “to B, but if B ever tries to sell the estate, then to D.”

Question 23

What is a disabling restraint?

Answer 23

A restraint that prevents the transferee from transferring her interest.
O conveys “to B, and any conveyance by B is void.”

Question 24

What is a promissory restraint?

Answer 24

A restraint that stipulates that the transferee promises not to transfer her interest.
O conveys “to B, and B promises that she will not sell the estate.”

Question 25

What is the duration of B’s estate? O conveys to A and his heirs. Then A conveys to B for 2 years. One year later A dies.

Answer 25

B’s estate is unaffected by A’s death. B has one more year of possession left.

Question 26

How can a landowner control the future of her property after she transfers her property?

Answer 26

Fee Simple Subject to a Condition Subsequent

Fee Simple Determinable

Question 27

How does an Absolute estate end?

Answer 27

Naturally

Question 28

How does a Defeasible estate end?

Answer 28

Unnaturally

Question 29

What is the consequence of the distinction here?
Suppose O grants a defeasible fee simple in Orangeacre, an orange grove, to D, and the triggering event is D’s consumption of alcohol. D first drinks alcohol in 2017, but remains in possession until O brings suit in 2020.

Answer 29

If D’s estate was an FSD, it ended in 2017, and D owes rent to O for three years. However, if the estate was a FSSCS, D owes no rent until O retakes the premises.

Question 30

Courts will generally construe an estate as a fee simple subject to a condition subsequent. Why?

Answer 30

To avoid forfeiture!

Question 31

What is a term of years?

Answer 31

An estate of fixed duration. A present possessory interest of fixed duration. Grantor retains a reversion.

Question 32

Estate begins

Answer 32

And estate ends

Question 33

What is a reversion?

Answer 33

A reversion is a future interest in the transferor which can become possessory upon the expiration of a life estate, term of years or contingent remainder. A reversion generally follows a contingent remainder because someone must hold seisin in the estate at all times (someone must be in possession).

Question 34

What does a possibility of reverter do?

Answer 34

A possibility of reverter is a future interest which automatically divests the grantee of her possessory interest upon the end of fee simple determinable estate.

Question 35

If there is ambiguity in the conveyance’s language, which estate do courts prefer?

Answer 35

A fee simple subject to a condition subsequent, because there are no automatic forfeitures. This presumption is more in favor of the transferee and more in favor of the modern marketplace.

Question 36

Which present possessory interest do we apply the doctrine of waste to?

Answer 36

Life estate.

Question 37

What is a future interest?

Answer 37

An existing, nonpossessory property right that may become possessory in the future.

Question 38

What are the three types of future interests for a grantor?

Answer 38

A reversion; A possibility of reverter; A right to reenter and reclaim the property.

Question 39

What are the two main types of future possessory interests for a grantee?

Answer 39

• Remainder (indefeasible or contingent)

- Executory interest (springing or shifting)

Question 40

What are the three types of vested remainders?

Answer 40

• Indefeasible
• Subject to divestment
• Subject to open

Question 41

What future interest is there when an owner conveys a fee simple absolute?

Answer 41

None.

Question 42

What is a remainder?

Answer 42

A future interests that “waits patiently” until the termination of the preceding possessory estate. Possession is not guaranteed, it cannot divest any interest in a prior transferee.

Question 43

What is an indefeasibly vested remainder?

Answer 43

A future possessory interest in which the interest is conveyed to an ascertainable person and is not subject to a condition precedent

Question 44

Who counts as an ascertainable person?

Answer 44

• People alive and ascertainable
• NOT heirs
• NOT kids in womb

Question 45

What is a contingent remainder?

What is a contingent remainder subject to a condition precedent?

Answer 45

A contingent remainder is a future interest in an unascertainable person OR a future interest that is subject to a condition precedent
O conveys Greenacre “to B for life, then to the heirs of D.”
Subject to a condition precedent (stated event must occur before)

Condition precedent = something that must happen before the remainder can become possessory (not natural expiration)

Question 46

What is a vested remainder subject to divestment?

Answer 46

A future possessory interest that is vested but it can be lost. “It’s yours, but you’ll lose if it so and so occurs”
Example: O conveys “to B for life, then to D, but if D smokes marijuana during B’s lifetime, then to E.”

Question 47

What is a Vested remainder subject to open?

Answer 47

A vested remainder held by one or more living members of a group orclassthat may be enlarged in the future.
Example: O conveys Greenacre “to B for life, then to D’s children.” At the time, D has two living children, E and F.

Question 48

How does a class close (in a vested remainder subject to open)?

Answer 48

Natural Closing – an event that prevents further creation of members (i.e. death)To Jorge for life, then to the children of Pepe. Class will close at Pepe’s death.
OR
Rule of Convenience – class closes the time designated in the conveyance for distribution
To Jorge for life, then to the children of Pepe. Class will close at Jorge’s death.

Question 49

Remember living cannot be a contigency

Answer 49

6. O conveys “to D for life, then to B, but if B does not survive D, then to E.”
7. D – Life estate
8. B – Vested remainder subject to divestment
9. E – Shifting executory interest

Question 50

What does a kid in the womb have ONLY AFTER it is born?

O to A for life, then to A’s children. (A’s wife is pregnant with their first child.)

Answer 50

A vested remainder subject to open.

Question 51

What does O have

O to A for life, then to B, but if B ever opens a restaurant in San Diego, then to O.

Answer 51

Shifting executory interest

Question 52

Can there be more than one condition precedent/conditions in a contingent remainder?

Answer 52

Yes. O conveys “to G for life, then if M marries, to M’s oldest son.”M has no children.”
Two conditions: If M Marries, on condition that M has a son.

Question 53

What is an alternative contingent remainder?

Answer 53

Alternative Contingent Remainders occur when each transferee waits patiently for possession, but only one gets it. Their conditions precedent are opposite of one another. One vesting precludes the other from vesting. Even though alternative contingent remainders are mutually exclusive and will exhaust all possibilities, the transferor still carries a reversion because at common law, contingent remainders were destructible.
Example: O to A for life, then to B if B has graduated from law school, but if B has not graduated from law school, then to C.

Question 54

What is an executory interest?

Answer 54

A future interest that can only take effect by divesting (cutting off) another’s interest
Note: When you see a third-party sneaking into the conveyance, there is going to be an executory interest

Question 55

What is the definition of the Rule Against Perpetuities (RAP)?

Answer 55

No interest is good unless it must vest, if at all, no later than twenty-one years after some life in being at the creation of the interests.

Question 56

What three types of future interests are subject to the Rule Against Perpetuities?

Answer 56

Contingent remainders, executory interests, and vested remainders subject to open.

Question 57

Who are the “lives in being” in a Rule Against Perpetuities analysis?

Answer 57

Must be persons who are alive at the time the instrument becomes effective (a child in gestation is considered if later born alive)

Question 58

What is the unborn widow (spouse) doctrine?

Answer 58

The rule implies that at the time an instrument is effective, a widow is not an ascertainable human being.
- Under RAP, to “A for life then to A’s widow”, this is valid because when A dies, we know who his widow is. Compare this to to “A for life, then to A’s widow’s kids.” A dies. The widow might have a kid in 50 years. Violates perpetuity window.
Also, for RAP, because we don’t know who the widow is, they are not a life in being.

Question 59

What is the concept of a woman being able to have kids at any age? How is it defined?

Answer 59

The Fertile Octogenarian rule assumes that a living person, regardless of sex, age, or physical condition, will always be capable of having more children, thus allowing an interest to vest twenty-one years after all the lives in being at the time of the grant are dead.

Question 60

What are the five steps in a RAP analysis?

Answer 60

1. Identify the interests.
2. Lists the lives in being.
3. Consider whether anyone can be born after who may impact the vesting.
4. Kill off all the lives in beings the next day and add twenty-one years.
5. Ask whether there is any possibility that the interests will vest after this point? If so, invalid.

Question 61

What are six signs that an interest may violate the Rule Against Perpetuities?

Answer 61

1. The condition is not personal to someone. Example: To “A for life then if the land is never used as a park to B.”
2. There is an identified age or time period of more than 21 years. Example: “O to A for life, then to A’s children who reach 25.” (A has 1 child, B, who is 25.)
3. An interest is given to a generation after the next generation (i.e. grandchildren). Example: “O to A for life, then to A’s grandchildren.” (A has 1 child, B, and 1 grandchild, C.)
4. A conveyance requires that a holder survive someone who is merely described rather than named. Example: Void: “O to A for life, then to A’s widow for life, then to A’s children then living.” [A is presently married to B and has one child (C).]
5. An identified event that would normally happen within 21 years but might not. Example: Void: “O to A for life, then to B for 20 years, then to the person who has received A’s land in the distribution of A’s estate.
6. The holder won’t be identified until the death of someone merely described rather than named. Example: Void: “O to A for life, then to A’s 1st child for life, then to whoever is the President of the United States.” (A has no children.)

Question 62

to Fenn and his heirs in three months
OR
O conveys “to B one year from today

Answer 62

• A springing executory interest. Because this interest divests the transferor it is a springing executory interest. And there is nothing contingent about time so it is not a contingent remainder.

Question 63

STUDY INTERVIVIOS AND CAUSA MORTIS

Answer 63

x

Question 64

If you see a Fee Simple Determinable followed by a Condition Subsequent what do you do?
Example: O to A and the heirs of her body SO LONG AS the land is farmed, BUT IF the land ceases to be farmed, then back to O.

Answer 64

The property market prefers a Fee Simple Subject to a Condition Subsequent, so choose this over a Fee Simple Determinable.

Question 65

Label the interests

O conveys “to D for life, then to B, but if B does not survive D, then to E.”

Answer 65

i. D – Life estate
ii. B – Vested remainder subject to divestment
iii. E – Shifting executory interest

Question 66

Label the interests

T devises “to A for life, then to T’s children.” T is 80 and has no children.

Answer 66

a. A – LE
b. T’s children – Contingent Remainder
c. T - reversion

Question 67

O to A for life, then to B and his heirs, then to C and his heirs.
Who has what?

Answer 67

1. A – LE
2. B – IVR
3. C- nothing
   Note - no one can have anything after it goes to someone and their HEIRS

Question 68

O conveys “to A for life, then to B for life if B learns how to play the piano, then to C for life if C learns how to play the trombone. What is C’s interests?

Answer 68

B and C - contingent remainders in life estate

Question 69

Name the interest Google has

O conveys “to F for life.” F then conveys her interest “to Google, Inc.”

Answer 69

Life estate pur autrie vie

Question 70

Name the interest.

To April for life, but if she moves to New York, then I may take my estate back

Answer 70

Life Estate Subject to a Condition Subsequent

Question 71

2. What are the interests?
   a. O to A for life, then to B, but if B ever owns an insurance agency, then to O.
   b. O to A for life, then to B; however, if B divorces after A dies, then to O.

Answer 71

i. A has a life estate (present possessory interest/estate)
ii. B has a vested remainder subject to divestment (future interest. Will vest when A dies. We can point to B and there is no condition precedent, so it is a vested remainder. However, B can be divested at some point in time—if he ever owns an insurance agency or if he divorces—so it’s a vested remainder subject to divestment)
iii. O has a right to rentry. It’s going to O, not to a 3rd party (in which case there would be an executory interest). To make it real, fast forward, and say A dies. B then has a fee simple subject to condition subsequent (FSSCS), and in a FSSCS, the grantor retains the right to reenter.

Question 72

Name the interests.

O devises “to G for life, then to H, but if H does not survive G, then to I.”

Answer 72

a. G – LE
b. H and I – are ACR
c. O has nothing – the interest either goes to H and his heirs or to I and his heirs

Question 73

Name the interests.

Bob for life, then to Dan and his heirs, but if Dan does not survive Bob, to Marshall and her heirs.

Answer 73

Alternative contingent remainders

Question 74

Name the interest.

O devises “to my grandchildren WHO reach age 21.”

Answer 74

The grandchildren have a contingent remainder, some of them may be 21 at the time the instrument is effective; some may not be 21. Note that the interests vest at the time the instrument is effective; not 10 years later. It is contingent because they are not yet ascertainable. They have to be 21 at the time the instrument is effective.
If this said “WHEN” they reach - then they are cutting off, and it’s an executory interest.

Question 75

O conveys “to F for life, and then to G for life.”

Answer 75

O has a reversion.

a. F has a life estate
b. G has an indefeasibly vested remainder in life estate

Question 76

O to A for life, then to B’s heirs, but if B has no heirs, then to C’s heirs.

Answer 76

Alternative contingent remainders

Question 77

What is the ONLY language that can trigger joint tenancy with right of survivorship rules?

Answer 77

“joint tenants with right of survivorship”

Have to see word “survivorship”

Question 78

What is a tenancy in common?

Answer 78

• Undivided, fractional interest in the property
• Each has the right to use and possess the whole parcel
• Proceeds of sales are proportionate shares
• Freely alienable, transferable, and devisable
• If an owner dies, ownership is transferred to the person named in their will.

Question 79

Here is an example of a tenancy in common.

Answer 79

A & B are “tenants in common” in fee simple absolute in Greenacre, a 100-acre farm. A holds a 75% undivided interest and B holds the remaining 25%. B is entitled to possession of all 100 acres, as is A. However, upon sale of Greenacre, the proceeds will be divided in proportion to the fractional shares.

Question 80

Here are other examples of a tenancy in common.

Answer 80

• O conveys Greenacre “to A and B”
• O conveys Greenacre “to A and B as tenants in common”
• O dies intestate, leaving to children A and B as her only surviving relatives.

Question 81

What is a joint tenancy with a right of survivorship?

Answer 81

Joint tenancy with a right of survivorship is a type of property ownership giving co-owners survivorship rights upon another co-owner’s death. It is neither devisable or descendible, and the joint tenants have an undivided right to use and possess property. A creation of a joint tenancy requires the four unities, and a transfer of interest severs the joint tenancy. If interest is transferred, the new owner has a tenancy in common with the others.
If an owner dies, ownership is transferred to the remaining owner.
PITT
Possession - the right to possession.
Interest - must hold equal type of interest (FSA) - not equal shares of interest
Title - must receive interest via same instrument.
Time - ownership must be received at the same time.

Question 82

What is an example of violating the unities?

Answer 82

Violating the unity of time - receiving the interest at the same time.
Let’s say that O conveys a “one half undivided share of Greenacre as a joint tenant” to E on Monday and then conveys a similar interest to F on Tuesday. E and F are NOT joint tenants because the unities of time and title are missing. Instead, they are tenants in common.

Question 83

What language do we need for a joint tenancy with right of survivorship?

Answer 83

Joint tenancy with right of survivorship.

Question 84

What is a tenancy by entirety?

Answer 84

• O conveys Greenacre “to A and B as tenants by the entirety.”
• Must be a married couple
• Undivided right to use and possess the whole property and right of survivorship
• Ended by death, divorce or the agreement of both spouses

Question 85

What are the three types of concurrent ownership?

Answer 85

• Tenancy in common
• Joint tenancy with right of survivorship
• Tenancy by the entirety

Question 86

How can a joint tenancy with right of survivorship be severed and how does a mortgage or lease impact a joint tenancy with right of survivorship?

Answer 86

• A joint tenancy is severed if one cotenant transfers her interest during her lifetime
• The majority of jurisdictions state a lease does NOT sever the joint tenancy
• Depending on jurisdiction, mortgage may sever the joint tenancy
• In a Title Theory jurisdiction, a mortgage is seen as the conveyance of title to the mortgagee.
• In a Lien Theory Jurisdiction, a mortgage is viewed as a lien to secure repayment of the debt.

Question 87

What is a partition?

Answer 87

An action to end the co-tenancy and distribute the assets.

Question 88

What is a partition in kind?

Answer 88

Occurs when the property is PHYSICALLY divided, equitably and fairly, between the multiple owners.

Question 89

What is a partition by sale?

Answer 89

Courts may order a sale of the entire property and the proceeds from the sale will be divided up among the co-owners.

Question 90

What are the three factors a court looks to balance when determining whether to conduct a partition by sale?

Answer 90

• First, the property cannot be conveniently partitioned in kind
• Second, the interests of one or more of the parties will be promoted by the sale
• Third, the interests of the other parties will not be prejudiced by the sale

Question 91

What are the two rights and duties of cotenants?

Answer 91

• Each cotenant has the right to use and enjoy all of the property.
• Each cotenant has the right to use and enjoy all of the property.
• Each cotenant is responsible for payment of his pro-rata share of operating expenses

Question 92

Do the cotenants in possession of the property have to pay rent to the person who is not using the property?

Answer 92

• The majority rule is that no rent is owed by cotenants in possession to co-tenants not in possession, UNLESS there is an ouster
• Minority rule is that rent is owed

Question 93

What is an ouster?

Answer 93

• Anousteroccurs when a cotenant in possession refuses to allow another cotenant to occupy the property.
• The individual committing the ouster is liable for the pro rata share of the rental value of the individual’s occupancy to the ousted.

Question 94

What are the two main ways waste factors into concurrent ownership?

Answer 94

One concurrent owner may bring an action in waste against another concurrent owner of property (voluntary waste)
Concurrent owners do not have to contribute to improvements made to property by other concurrent owners (ameliorative waste)

Question 95

What is a partition action?

Answer 95

Cotenant seeks to both partition the property and have the court settle the financial affairs of the cotenants.

Question 96

What is a contribution action?

Answer 96

Cotenant seeks reimbursement from other cotenants for certain expenses she has paid for the operation of the property (the mortgage, taxes and insurance)

Question 97

What is an accounting action?

Answer 97

Cotenant seeks to obtain her share of the rents or profits that the property has generated. In a majority of jurisdictions, improvements and repairs are covered here.

Question 98

How is an accounting action based on fractional interests?

Answer 98

If one of four tenants in common rents commonly owned property, all four tenants in common are entitled to share in the revenue. If the rent equals $100, then, unless the grant to the four tenants in common specifies unequal ownership percentages, each owner is entitled to $25.