Estates & Trusts Flashcards
Present Estate
possess now
Future Estates
possess in future under certain circumstances
Devisees
entitled to property under will
Heirs
inherit property if no will (if no relatives, estate)
Basic Rules
- You cannot give what you do not have
- Unless you say so specifically, you give whatever you have
- But you keep what you do not give away
- Future interests generally pass on death like other interests – so go to one’s devisees if owners has will or heirs if one doesn’t
Rules of Construction
In favor of intent of grantor
Against future interest
Against forfeiture
Against creation of new estates (numerous clauses rule)
Property interests must fit within limited set of established categories to be enforced (form and subsistence)
Fee Simple Absolute
(default) PE that could last forever (no future interest)
Defeasible
PE that could last forever BUT can be lost by trigger event
Fee simple determinable (PE)
(1) FI in grantor AND (2) transfers automatically upon trigger event (words of duration)
FI = possibility of reverter (grantor)
SOL for adverse possession begins upon trigger event (fee simple determinable becomes trespasser)
Fee simple absolute subject to a condition
(1) FI in grantor AND (2) stays with PE upon trigger event until FI (grantor) asserts right to rentry (words of condition)
FI = right of entry (grantor)
SOL for AP begins after right is asserted (not upon event)
Usually must specify “right of entry” (or the like) in transfer to create such FI but sometimes will not be required if “on express condition that”
Laches
Fee Simple subject to executory limits (PE)
1) FI in third party AND (2) transfers automatically upon trigger event
FI = executory interest (3rd party)
Life Estate
potentially forever; always PE
Has no right to determine future owner – if property sold, will go to remainder/reversioner upon identified person’s death
Future Interest of Life Estate
Reversion
FI in grantor
Future Interest of Life Estate; Third Party
Contingent remainder
depends on condition precedent or unascertained person
(1) Event happens that is unsure to happen OR
(2) Will go to person that cannot yet be ascertained (unknown who)
Only applies if no one in class gift is ascertained (goes to children and none have been born)
Future Interest of Life Estate; Third Party
Vested remainder
know exactly who it will go to and that it will go
Future Interest of Life Estate; Third Party
Vested remainder subject to open
class gift with someone already identified but more could be added
Rule of convenience
(some courts)
close class when person whose life is attached to life estate dies (no more people can be added) in absence of grantor intent
If not adopted, class closes when no possible to vest in anyone else
Future Interest of Life Estate; Third Party
Vested remainder subject to disinvestment
vested now but may lose if an event uncertain to happen occurs
Class gift
grant to group describe but not named
Trust
separates legal title (trustee) and equitable title (beneficiary)
Requires (1) designate trust property; (2) designate beneficiary; (3) intent to have property used by another to benefit beneficiary
Human beneficiaries need not be alive so long as they can be ascertained in reasonable time after creation
Trustee
FD to administer trust in interest of beneficiary (cannot have conflict of interest)
Private
serve personal goals/beneficiaries
Charitable
achieve charitable interest (unspecified charitable purpose sill enforceable
Do not need ascertained beneficiary – indefinite group
Cy Pres
if trust purpose if no longer reasonable, will be applied to purpose consistent with grantor’s intent
Honorary
beneficiaries are not legal people (pets) or created for specific purpose (maintain family cemetery lot)
Value of trust > amount needed for purpose, surplus goes to creator’s estate
Resulting Trust
when trustee refuses/cannot use for intended purpose, may required trust property be returned
