Estates in Land

Question 1

What are indefeasible present possessory interests?

Answer 1

Indefeasible interests are not subject to early termination.

This includes:

a. Fee simple absolute (“to A and his heirs” or “to A”)
b. Life estate (“to A for life” or “to A for the life B”)

Question 2

What are defeasible present possessory interests?

Answer 2

a. Determinable (“for so long as,” “until,” “while,” “during”)—automatically reverts to grantor

b. Subject to condition subsequent (“but if,” “upon condition that,” “provided
that”)
—subject to the grantor’s right of entry, which must be exercised

c. Subject to an executory interest (“to A for so long as . . . , and if not . . . , to B,”
“to A, but if . . . , to B”)
—divests in favor of a third party

Question 3

What are future possessory interests?

Answer 3

1. Interests retained by the grantor
   a. Reversion—grantor transfers a shorter estate than she owns (grantor with a fee simple transfers a life estate)
   b. Possibility of reverter—grantor transfers a determinable estate

c. Right of entry (power of termination)
—reserved on the grant of an estate subject to a condition subsequent

Question 4

What is the Rule Against Perpetuities?

Answer 4

Any future interest that is not certain to vest or fail within a life in being plus 21 years is void. Only the interest that violates the Rule is stricken.

Cases that always violate the common law Rule:
1) Executory interest following a defeasible fee—executory interest is stricken

2) Gift to an open class conditioned on members surviving to an age beyond 21—entire class gift is stricken (“bad as to one, bad as to all”)
3) Remainder to A’s children living at his widow’s death (“unborn widow” problem)—contingent remainder is stricken
4) Gift conditioned on an administrative contingency is stricken
5) Options that might be exercised (not created) later than the Rule’s period are stricken

Question 5

What is a tenancy in years?

Answer 5

Tenancy for years are for a fixed period of time (e.g., 10 days, 10 years).

These are created expressly and end automatically on its termination date (no notice).

Question 6

What is a periodic tenancy?

Answer 6

A periodic tenancy is for a fixed period that continues for succeeding periods (e.g., month to month).

These are created expressly or when a lease draws periodic rent payments, terminated on proper notice (appropriate time period).

Question 7

What is a tenancy at will?

Answer 7

Tenancy at will has no stated duration, as long as parties desire. It is created expressly and terminated on proper notice.

Question 8

What is a tenancy at sufferance?

Answer 8

Tenancy at sufferance (hold-over doctrine) is when the tenant remains in possession after tenancy expires.

Landlord may evict tenant or create a periodic tenancy by accepting rent.

Question 9

At common law, a conveyance of property from O “to O and A as joint tenants with right of survivorship” creates a __________.

Answer 9

A conveyance of property from O “to O and A as joint tenants with right of survivorship” creates a tenancy in common.

Four unities are required to create a joint tenancy: (i) time (interests vested at the same time), (ii) title (interests acquired by the same instrument), (iii) interest (interests of the same type and duration), and (iv) possession (interests give identical rights to enjoyment). If these four unities are not present, a joint tenancy cannot be created at common law. Instead, a tenancy in common results.

Question 10

If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, who owns the property?

Answer 10

Only A owns the property.

If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, A only owns the property. A testamentary disposition by one joint tenant will not sever a joint tenancy. B’s will doesn’t work with ending a joint tenancy because when the co-tenant who is the testator dies (which is when the will becomes effective), her rights in the joint tenancy property are extinguished, and the will has no effect on them.

Question 11

Two partners bought a commercial building from an owner. They paid cash for the building and took title as joint tenants with right of survivorship. Several years later, the first partner executed a mortgage on the building to secure a personal loan to a bank. The second partner had no knowledge of the mortgage to the bank. The state in which the commercial building is located recognizes the lien theory of mortgages. The first partner died before paying off his loan. He left all of his property by will to his daughter, his only heir.

Who has title to the commercial building?

Answer 11

The second partner has title free and clear of the mortgage. When the partners bought the property, they took title as joint tenants with right of survivorship. If the joint tenancy continued until the first partner’s death, then the property would pass immediately on death to the second partner. Because the second partner did not sign the mortgage, she would not be subject to it, regardless of whether she knew about it.

Whether a mortgage creates a severance or not depends on whether the state follows the lien theory or the title theory of mortgages. Lien theory means no severance; title theory means severance. Because this is a lien theory state (majority rule on the MBE), there was no severance; thus, the joint tenancy remained intact. On the first partner’s death, the joint tenancy ended and the first partner’s interest instantly passed to the second partner. The first partner’s estate got nothing; so, the daughter could get nothing.

Question 12

In which of the following situations must the tenant continue to pay a portion of the rent?

A - The landlord takes possession of an unused barn on the leased premises and stores farm equipment in it.

B - A paramount title holder obtains a judgment in an ejectment action against the tenant.

C - A paramount title holder takes possession of an unused barn on the leased premises and stores farm equipment in it.

D - The landlord obtains a judgment in an ejectment action against the tenant.

Answer 12

If a paramount title holder takes possession of an unused barn on the leased premises and stores farm equipment in it, the tenant must continue to pay a portion of the rent. Every lease contains an implied covenant that neither the landlord nor someone with paramount title will interfere with the tenant’s quiet enjoyment and possession of the premises. This covenant is breached by the tenant’s total or partial actual eviction from the leased premises.

Total actual eviction occurs when the landlord or a paramount title holder excludes the tenant from the entire leased premises. This terminates the tenant’s obligation to pay rent. Partial actual eviction occurs when the tenant is excluded from only part of the leased premises. Partial eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder of the premises. Partial eviction by a paramount title holder results in an apportionment of rent; i.e., the tenant is liable for the reasonable rental value of the portion that he continues to possess. A paramount title holder’s taking possession of an unused barn constitutes partial actual eviction. Thus, rent will be apportioned.

Question 13

If a landlord’s breach of duty renders the premises unsuitable for occupancy, under the doctrine of constructive eviction, the tenant may:

Answer 13

If a landlord’s breach of duty renders the premises unsuitable for occupancy, the tenant may vacate the premises, terminate the lease, and sue for damages.

Under the doctrine of constructive eviction, if the landlord’s breach makes the premises untenantable, the tenant may terminate the lease and also may seek damages if the following conditions are met:

1. The breach must be by the landlord or by persons acting for him. 
2. The breach must substantially and materially deprive the tenant of her use and enjoyment of the premises (e.g., flooding, absence of heat in winter). 
3. The tenant must give the landlord notice and a reasonable time to repair. 
4. The tenant must vacate the premises within a reasonable time.

Question 14

What is failure to disclose a latent defect?

Answer 14

If, at the time the lease is entered into, the landlord knows of a dangerous condition that the tenant could not discover upon reasonable inspection, the landlord has a duty to disclose the dangerous condition. Failure to disclose the information about the condition results in liability for any injury resulting from the condition.

Question 15

What happens if the landlord breaches the implied warranty of habitability?

Answer 15

If the landlord breaches the implied warranty, the tenant may: (i) terminate the lease, (ii) make repairs and offset their cost against future rent, (iii) abate rent, or (iv) seek damages.

Question 16

J “to K and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to E and her heirs.”

Answer 16

K: fee simple subject to executory limitation (liquor consumption)

J: no interest

E: shifting executory interest

After operation of Rule Against Perpetutities:
K: fee simple determinable
J: possibility of reverter
*It could be generations (or beyond LIB + 21 years) before liquor is consumed on the premises

Question 17

T/F: If the interest is executory and it is about something that is an effect on the land, the grant is typically void as violating RAP.

Answer 17

True.

Question 18

T dies with a will devising land to A for life, then to such of A’s children as reach 21. A has no children at time of T’s death. At the time of the conveyance, how do we classify the interests?

Answer 18

A: life estate
A’s children: contingent remainder
O: reversion in fee simple

RAP does not void A’s children because A is a life in being. By A’s death, we’ll know which children are 21 years old.

Question 19

T dies with a will devising land to A for life, then to A’s children who reach 25. At the time of T’s death, A has two children. At the time of conveyance, how do we classify the interests?

Answer 19

A: life estate
A’s children: contingent remainder
T: reversion

The contingent remainder will not be valid under RAP because A could have more children and the kids currently alive could die before 25.

Question 20

O gives land “to the local YMCA for so long as the premises are used for YMCA purposes; and when they shall cease to be so used, then to the American Cancer Society.”

What are the interests of the parties?

Answer 20

YMCA has a fee simple subject to executory limitation.

American Cancer Society has a shifting executory interest.

ACS’ interest does not violate RAP because of the charity-charity exception.

Question 21

X conveys to O for life, then to O’s widow for life, and on the death of O’s widow, to such of O’s descendants who are still living.

How do we classify the interests?

Answer 21

O has a life estate.

O’s widow has contigent remainder (might not be a widow/dies before O).

O’s descendants have a contingent remainder.

X has reversion.

At time of conveyance, O is married. There is a RAP issue with O’s descendants. We don’t know the identity of the widow and the lives might not be in being at time of this conveyance.

Question 22

J, P, R, and G are joint tenants. In 1980, J dies.

What are the interests?

Answer 22

J, P, R, and G as joint tenants had a 1/4 undivided interest in the land.

When J died, P, R, and G held 1/3 undivided interests.

Surviving joint tenants take automatically on the death of a joint tenant - they do not inherit the share. Due to the right of survivorship, the shares are not devisable or inheritable.

Question 23

How is a joint tenancy created?

Answer 23

A joint tenancy requires: time, title, interest, and possession; must be equal and created at same time.

Time: all interests must have vested at the same time

Title: grant to all joint tenants must be by the same instrument of title

Interest: all joint tenants must take the same type and size of interest

Possession: all must have identical rights of possession

**Language must clearly make joint tenancy intent known OTHERWISE it is a tenancy in common

Question 24

“to J, P, R, and G jointly” =

Answer 24

tenancy in common

Question 25

“to J, P, R, and G as joint owners” =

Answer 25

tenancy in common

Question 26

What language is needed to convey a joint tenancy?

Answer 26

Must indicate a right for survivorship such as “joint tenants, with the right of survivorship” or “in joint tenancy with right of survivorship.”

Question 27

What is a fee simple absolute (FSA)?

e.g. “to A”

Answer 27

FSA is the largest estate recognized by law. It can be sold, divided, devised, or inherited and has indefinite or possibly indefinite duration.

*This is presumed in absence of express contrary intent.

Question 28

What is a fee simple determinable (FSD)?

e.g. “to A and his heirs, for so long as…”

Answer 28

FSD terminates upon the happening of a stated event and automatically reverts to the grantor. It is seen with words limiting duration (“for so long as,” “while,” “during,” or “until.”)

Question 29

What is a fee simple subject to condition subsequent?

“to A and his heirs, but if…”

Answer 29

This is when the grantor reserves the right to terminate the estate (and has a right of entry to do this) upon the happening of a stated event. It is created with conditional language.

Question 30

T/F: A life tenant is entitled to any ordinary uses and profits of the land but cannot do anything that injures the interests of a remainderman or reversioner.

Answer 30

True, e.g. see why in oil and gas law a person with a present interest must get the consent of the person who has remainderman (3rd party interest) or reversioner (original grantor) interest in the drilled oil.

Question 31

What is a trust?

Answer 31

A trust is fiduciary relationship where the trustee holds legal title to the property subject to enforceable equitable rights in a beneficiary. RAP applies.

Trusts are created by will, inter vivos transfer, or inter vivos declaration. Trusts of real property must be in writing.

Question 32

What is a charitable trust?

Answer 32

It is fiduciary relationship where the trustee holds legal title to the property subject to enforceable equitable rights in a beneficiary. It must have a charitable purpose.

It must have indefinite beneficiaries, it may be perpetual (RAP doesn’t apply), and cy pres applies.

Question 33

For interests granted by will, when does the Rule Against Perpetuities period start running?

Answer 33

If interests granted by will, it runs from the date of the testator’s death. The interest in property will not be valid if it does not vest within 21 years from a life in being at testator’s death.

Question 34

For deeds, when does the Rule Against Perpetuities period start running?

Answer 34

The date of delivery

Question 35

For irrevocable trusts, when does the Rule Against Perpetuities period start running?

Answer 35

from the date it is created

Question 36

For revocable trusts, when does the Rule Against Perpetuities period start running?

Answer 36

from the date it becomes irrevocable

Question 37

T/F: Grantor’s interests (reversions, possibilities of reverter, and rights of entry) are safe from RAP.

Answer 37

True.

Question 38

Does this violate the Rule Against Perpetuities?

O “to A for as long as no liquor is consumed on the premises, then to B”

Answer 38

Yes. B’s executory interest may not vest in 21 years and thus it violates RAP. A would have a fee simple determinable and O would have a possibility of reverter.

Question 39

Does this violate the Rule Against Perpetuities?

O “to A, but if liquor is ever consumed on the premises, then to B”

Answer 39

Yes. B’s executory interest and the condition are stricken, and this would be a fee simple absolute to A.

Question 40

Does this violate the Rule Against Perpetuities?

“to A for life, then to A’s children who attain the age of 22.”

Answer 40

Yes. The remainder in A’s children violates RAP and is void - it would be a life estate to A.

Question 41

Does this violate the Rule Against Perpetuities?

“to A for life, then to A’s children for life, then to A’s grandchildren in fee.”

Answer 41

This violates RAP. The remainder in A’s grandchildren may not vest in 21 years. (A’s life is the life in being)

Question 42

Does this violate the Rule Against Perpetuities?

“to A for life, then to A’s widow for life, then to A’s surviving issue in fee.”

Answer 42

This violates RAP. A is the life in being and it is uncertain if A’s widow might be a spouse who was not in being when the interest was created.

Compare with “to A’s children” - which would be valid. Unlike issue, children would be determined at A’s death.

Question 43

T/F: RAP does not apply to such a option contract (purchase beyond the perpetuities period) held by a current tenant or his assignee.

Answer 43

True.

Question 44

Does this violate the Rule Against Perpetuities?

“to A for life, then to A’s children for their lives; and upon the death of the last survivor, to B.”

Answer 44

No. This is a valid interest because B’s interest is vested because B has a vested remainder subject to total divestment (to A’s children’s interests.)

Question 45

Does this violate the Rule Against Perpetuities?

“to B for life, remainder to those of B’s siblings who reach age 21.”

Answer 45

No. B’s parents can be used as a measuring life and 21 years after B’s life the currently alive siblings will be at least 21 years old.

Question 46

Does this violate the Rule Against Perpetuities?

“to X Orphanage for so long as it is used to house orphans; if it fails to do that, then to the Red Cross.”

Answer 46

Charities aren’t subject to RAP if it’s from charity to charity.

Question 47

Does this violate the Rule Against Perpetuities?

“to A for life, and on his death to his wife W for life, upon W’s death to A’s children then living.”

Answer 47

No. W’s life is used for measuring and she is currently alive - there is no unborn widow problem.

Question 48

Does this violate the Rule Against Perpetuities?

“to Red Cross for so long as the premises are used for the Red Cross; when they cease to be used, then to Jane.”

Answer 48

Yes. Charity-charity exception does not apply and Red Cross could be around for 100 years.

Question 49

Does this violate the Rule Against Perpetuities?

“the residue of my estate to my descendants who are living when my estate is distributed.”

Answer 49

Yes. This is an administrative contingency problem.

Question 50

Does this violate the Rule Against Perpetuities?

“to B for life, then to such of B’s children who become lawyers.”

Answer 50

Yes. B may have a child born after this and who becomes a lawyer 22 years after B’s death.

Question 51

Does this violate the Rule Against Perpetuities?

“to A for life, then to A’s children for their lives; and upon the death of the last survivor, to A’s grandchildren”

Answer 51

Yes. A may have more children after this interest is created so she could have children beyond the perpetuities period.

Question 52

What are transactions that may not severe a joint tenancy?

Answer 52

1. judgment liens
2. mortgages
3. leases
4. testamentary disposition (will)
5. if one joint tenant murders another (but some states put a constructive trust because they don’t want the JT to benefit)

Question 53

T/F: Typically, a co-tenant in possession has the right to retain profits from her own use of the property.

Answer 53

True, unless it is net rents from third parties and net profits gained from exploitation of land.

Question 54

An elderly grandfather included the following clause in his will: “I give my house in the city to my son, but if he ever tries to sell it while he is alive, I want it taken away from him and given to my grandson.”

When the grandfather dies, what interests do the son and grandson have in the property?

Answer 54

“I give my house in the city to my son, but if he ever tries to sell it while he is alive, I want it taken away from him and given to my grandson.”

Grandfather attempted to give his son a fee simple, but the restraint on alienation “but if he ever tries to sell…” is void. Direct restraints on alienation of a fee simple are void.

The grant should be read as if it had been “O to A in fee simple.” The grandson gets nothing.

Question 55

A woman owned 400 acres of land, half of which was densely wooded and the other half was almost entirely occupied by a large gravel pit which supplied gravel for a landscaping business. A small house in poor condition is located on the edge of the pit and have been vacant for many years. The woman transferred the 400 acres to her son for life, with the remainder to a local charity.

The son wants to increase gravel production and expand the pit by tearing down the house. He also wants to cut the trees and sell them for profit. The charity sues the son from doing any of these things.

How will the court likely rule?

Answer 55

The court will likely rule that the charity can stop the tree cutting, but not the gravel mining or the destruction of the house.

Generally, a life tenant (like son) can only maintain the land and not sell off any natural resources, such as trees and gravel. But there is an existing exploitation of these resources - the gravel. Because the gravel business predated son’s life estate, the son is not liable for continuing the gravel business. The trees do not fall under this exception and the charity can prevent the son from doing anything with the trees.

The destruction of the house might be considered ameliorative waste - make the gravel mining more profitable. Generally a life tenant cannot tear down improvements to make more profitable use of the land, but an exception exists when changed conditions have made the destruction of the improvement reasonably necessary. Changed conditions (excavation of the pit) have made the house reasonably unsuitable so the life tenant can tear it down.

Question 56

O owned Blackacre in fee simple. He executed a will leaving the property to S for life, with remainder to N’s children. At time of execution, N had one daughter Do. Then N had a son Sa. A year later, O died.

Then Do died in a plane crash, leaving all of her estate to husband H. N had another daughter, De. S died. N has son Si.

Who owns Blackacre?

Answer 56

H, Sa, and De take Blackacre in equal terms.

When Do died, her vested remainder (as N’s daughter) went to H.

When De was born, she joined Sa and H in holding a vested remainder in fee simple. Si (N’s last son) does not qualify because he did not exist until after S’s life.

Question 57

Uncle owned a large tract of land in fee simple. On his 75th birthday, he conveyed the land to his niece and nephew. The deed was a general warranty deed conveying the property in fee simple absolute.

The uncle then executed a written agreement with nephew stating that the conveyance of land to niece and nephew was in trust for the benefit of a local hunting club for 10 years, with the niece and nephew as trustees, and then to both in fee simple. The uncle died.

Nephew and niece disagree about using the property for the hunting club. The niece threatened to have nephew and others arrested for trespass. The nephew brought an action and enforce the rights of the hunting club.

What relief should the court provide?

A - Partition the land into two separate tracts so that nephew may permit the hunting club to use his half.

B - Order niece to permit the hunting club on the land because the uncle made an inter vivos trust with the requisite formalities.

Answer 57

(A) Court should partition the land into two tracts. A court will presume that the niece and nephew were given the property as tenancy in common (no right of survivorship mentioned) on uncle’s 75th birthday. TiC have a right to possess all portions of the property and neither can exclude the other to another part. TiC also has a right to judicial partition of the property (either by kind or sale) if the co-tenants cannot come to an agreement, like here.

(B) is wrong because the uncle did not own the land at the time to convey the property in trust. The nephew and niece were also TiC. The uncle did not have the power to create a trust.

Question 58

If joint tenants convey 10% of the property to another, is the joint tenancy destroyed?

Answer 58

No. The joint tenants keep their joint tenancy and the person with the 10% is a tenancy in common.

Question 59

A brother and a sister held record title to a home as joint tenants with right of survivorship. The brother moved out of the home shortly after conveying his interest in the home to his friend by quitclaim deed. The friend did not record his deed. Several years later, the sister died, leaving her adopted daughter as her sole heir. Shortly after the sister died, the brother asked his friend to return his deed and give up his interest in the home. The friend agreed and returned the deed, which the brother destroyed.

Who has title to the home?

Answer 59

The friend and the daughter own the home as co-tenants. A joint tenancy is an estate between two or more co-tenants who have a right of survivorship. When one joint tenant dies, the property is freed from her concurrent interest and the survivor or survivors retain an undivided right in the property. An inter vivos conveyance by one joint tenant of his undivided interest destroys the joint tenancy so that the transferee takes the interest as a tenant in common and not as a joint tenant.

Here, when the brother conveyed his interest to the friend, the joint tenancy between the brother and the sister was severed. At that point, the friend and the sister held title to the home as tenants in common. The adopted daughter then inherited the sister’s interest upon the sister’s death. Because delivery of a deed cannot be canceled, the friend’s return and subsequent destruction of his deed has no effect.

Question 60

A landlord owned a prestigious downtown office building. A law firm leased the entire building from the landlord for a term of 20 years. The lease included a provision that taxes on the building would be paid by “the lessee, his successors, and assigns.” The law firm occupied the building and paid the rent and taxes for eight years. At the end of the eight-year period, the law firm assigned the balance of the lease to an accounting firm and vacated the premises. The assignment was written, but there was no provision concerning the accounting firm’s assumption of the duties under the lease.

The accounting firm occupied the building and paid the rent and taxes for five years. At the end of the five-year period, the accounting firm subleased the building for five years to an investment company and vacated the premises. The sublease was written, but there was no provision concerning the investment company’s assumption of the duties under the lease. The investment company now occupies the building and has paid the rent but not the taxes. The landlord has sued all three (i.e., the law firm, the accounting firm, and the investment company) for failure to pay the taxes.

The landlord should prevail against whom?

A The law firm only.

B - The law firm and the accounting firm, but not the investment company.

C -The accounting firm and the investment company, but not the law firm.

D - The law firm, the accounting firm, and the investment company.

Answer 60

The law firm and the accounting firm are liable.

After an assignment, the original tenant is no longer in privity of estate with the landlord. However, a tenant may still be held liable on its original contractual obligations to the landlord on privity of contract grounds. Here, the law firm is liable because it made the original deal with the landlord, which included the obligation to pay taxes on the building. The law firm remains in privity of contract with the landlord throughout the term of the lease unless it is otherwise discharged. In an assignment, the assignee stands in the shoes of the original tenant in a direct relationship with the landlord. Each is liable to the other on all covenants in the lease that run with the land, which would include the obligation of the lessee to pay taxes on the property. Here, the accounting firm is liable because as an assignee it is in privity of estate with the landlord. The accounting firm remains in privity of estate until it assigns to someone else.

The sublease to the investment company is not an assignment. A sublessee is not personally liable to the landlord for rent or for the performance of any other covenants made by the original lessee in the main lease (unless the covenants are expressly assumed) because the sublessee does not hold the tenant’s full estate in the land (so no privity of estate). Here, the investment company is not liable because, as a nonassuming sublessee, it is not in privity of contract or estate with the landlord. Therefore, (B) is the correct choice.

Question 61

A man and a woman lived together for many years but never got married. Although the state in which they reside does not recognize common law marriage, it has statutes that prohibit discrimination on the basis of marital status. The man and the woman purchased a large property, taking title as joint tenants. Subsequently, the woman accumulated a $20,000 debt. She was too embarrassed to tell the man. She went to a bank and took out a loan to pay the debt and secured the loan with a mortgage on the property. The bank was willing to accept the woman’s signature alone, and the man never learned about the mortgage. Two years later, the woman died without having paid off the mortgage. She left no will, and her only heir at law is her sister. The state in which the property is located is a “lien theory” mortgage state.

Who has title to the property?

Answer 61

The man takes sole title to the property under his right of survivorship. A joint tenancy carries the right of survivorship. Thus, when one joint tenant dies, the property is freed of her interest and the surviving joint tenant holds the entire property. Therefore, the man owns the property.

Most states, like the one in this question, regard a mortgage as a lien on title. In these states, a mortgage of the property by one joint tenant does not, by itself, sever a joint tenancy until default and foreclosure proceedings have been completed. The bank’s rights were lost when the woman died prior to foreclosure. When the woman died, her interest in the property evaporated, and with it the bank’s security interest.

Question 62

father executed a deed to his art gallery “to my daughter for her life, and on my daughter’s death to her children; provided, however, that if my daughter stops painting, to my brother.” The daughter has two children and is still painting.

At the time of the grant, what is the best description of the interest of the daughter’s two children?

A - A contingent remainder.

B - A vested remainder subject to open and to total divestment.

C - A vested remainder subject to open.

D - An executory interest.

Answer 62

The daughter’s two children have a vested remainder subject to open and subject to complete divestment.

A remainder is a future interest created in a transferee that is capable of taking in possession on the natural termination of the preceding estate. A remainder is vested if the beneficiaries are ascertainable and their taking in possession is not subject to a condition precedent. A vested remainder created in a class of persons that is certain to take but is subject to diminution by reason of others becoming entitled to take is a vested remainder subject to open. Vested remainders may be subject to total divestment if possession is subject to being defeated by the happening of a condition subsequent. Here, the daughter’s two children have a remainder because, on the expiration of the daughter’s life estate, they will be entitled to possession of the property. The remainder is not subject to a condition precedent and the beneficiaries are in existence and ascertained, so the remainder is vested, not contingent. The remainder is subject to open because the daughter may have more children. Finally, the remainder is subject to total divestment because the daughter’s children’s right to possession is subject to being defeated by the daughter’s ceasing to paint.

Question 63

A landowner included in his will a provision giving “all of my property, both real and personal, wherever situated, to my widow for life, and after her death to any of our children who may survive her.”

What is the gift to the children?

A - A contingent remainder.

B - A vested remainder.

C - A shifting executory interest.

Answer 63

The children have a contingent remainder. A remainder is a future interest created in a transferee that is capable of taking in present possession on the natural termination of the preceding estate created in the same disposition. Note that, as a rule of thumb, remainders always follow life estates. A remainder will be classified as contingent if its taking is subject to a condition precedent, or it is created in favor of unborn or unascertained persons. Here, the interest in the children follows a life estate and is a remainder because it is capable of taking in possession on the natural termination of the preceding estate. It is subject to the condition precedent of surviving the landowner’s widow and, additionally, is in favor of unascertained persons (the children who survive the landowner’s widow will not be ascertained until her death). Thus, the interest is a contingent remainder.