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Property Law > Future Interest > Flashcards

Future Interest Flashcards

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1
Q

What is a future interest?

A

Future interests are the right to take possession of a certain piece of property in the future if certain conditions have been satisfied.

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2
Q

What is a testator or testatrix?

A

A testator or testatrix is someone who dies without leaving a valid will.

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3
Q

What does it mean to die intestate?

A

Someone dies intestate if they die without a will.

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4
Q

Who inherits the property of someone who dies intestate?

A

Their heirs inherit their property.

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5
Q

Who is typically classified as an heir?

A

A person’s heirs are, in order:

  1. Their spouse
  2. Their children
  3. Their parents
  4. Their siblings
  5. Certain other relatives
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6
Q

What happens if someone dies intestate and has no heirs?

A

The property will escheat to the State.

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7
Q

What is escheat?

A

Escheat is when property reverts back to the State.

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8
Q

What is someone called who is entitled to real property under a will?

A

Someone entitled to real property under a will is called a devisee.

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9
Q

What is a trust?

A

A trust is a legal arrangement where one person or entity holds title to property for the benefit of another.

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10
Q

What are the three ways to divide future interests?

A
  1. Fee Simple Estates
  2. Life Estates
  3. Term of Years (Leases)
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11
Q

What is a Fee Simple Estate?

A

A Fee Simple Estate is a future interest that does not end because of lapse of time or death.

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12
Q

What is a Life Estate?

A

A Life Estate is a conveyance for the life of the grantee.

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13
Q

What is a Term of Years Estate?

A

A Term of Years Estate is a Leasehold (see Landlord-Tenant Law).

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14
Q

What are the types of Fee Simple Estates?

A
  1. Fee Simple Absolute
  2. Fee Simple Determinable
  3. Fee Simple Subject to a Condition Subsequent
  4. Fee Simple Subject to Executory Limitation
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15
Q

What is Fee Simple Absolute (FSA)?

A

Fee Simple Absolute (often just called Fee Simple) is a Fee Simple without an associated future interest.

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16
Q

How can you convey a Fee Simple Interest?

A

“O to A”
“O to A and her heirs”
“O to A in fee simple”

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17
Q

Why is “O to A” or “O to A and her heirs” a fee simple interest?

A

It is a fee simple interest because there is no time limit established in the grant.

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18
Q

What is a Defeasible Fee?

A

Any present interest that terminate at the happening of a specified event, other than the death of the current owner, is called a defeasible fees.

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19
Q

What are the two categories of defeasible fees?

A
  1. Whether the future interest is in the grantor or in a third party.
  2. Whether the future interest becomes possessory automatically when the stated event occurs or becomes possessory only if the future interest holder chooses to assert his property rights.
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20
Q

What is a Fee Simple Determinable (FSD)?

A

A Fee Simple Determinable (FSD) is when the future interest reverts automatically to the grantor on the happening of the stated event.

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21
Q

How do you create a Fee Simple Determinable?

A

“O to A so long as used for residential purposes.”

“O to A while used for residential purposes.”

“O to A during residential use.”

“O to A so long as used for residential purposes; if used for a nonresidential purpose, the property shall revert to O.”

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22
Q

What is a Fee Simple Subject to a Condition Subsequent (FSSCS)?

A

A Fee Simple Subject to a Condition Subsequent (FSSCS) creates a condition, that if satisfied, allows but does not automatically require, the property to revert to the grantor.

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23
Q

How do you create a Fee Simple Subject to a Condition Subsequent (FSSCS)

A

“O to A on condition that the property is used for residential purposes; in the event it is not so used, O shall have a right of entry.”

“O to A, but if used for nonresidential purposes, O shall have the power to terminate the grant.”

“O to A, provided that the property is used for residential purposes; if this condition is violated, O shall have a right of entry.”

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24
Q

What is Right of Entry in relation to Future Interests?

A

Right of Entry in relation to Future Interests results from a Fee Simple Subject to a Condition Subsequent containing a condition that is no longer satisfied. It allows, but does not require, the grantor to take possession of the property.

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25
Q

What is Fee Simple Subject to Executory Limitation (FSSEL)?

A

When a future interest in a defeasible fee belongs to a third party, the future interest is a Fee Simple Subject to Executory Limitation (FSSEL).

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26
Q

How do you create a Fee Simple Subject to Executory Limitation (FSSEL)?

A

“O to A so long as used for residential purposes, then to B.”

“O to A on condition that it is used for residential purposes, then to B.”

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27
Q

Why does “O to A so long as used for residential purposes, then to B,” and “O to A on condition that it is used for residential purposes, then to B,” constitute a Fee Simple Subject to Executory Limitation (FSSEL)?

A

Because both of these conveyances create a fee simple with a condition and in the event that said condition is not satisfied, the property automatically reverts to a third party.

28
Q

What is a Life Estate?

A

A Life Estate is a conveyance of property for the life of the grantee.

29
Q

What happens to a property conveyed in a Life Estate after the death of the grantee?

A

It reverts.

30
Q

What if the grantor designates a third party to obtain ownership when the grantee dies?

A

The property reverts to the third party who is called the remainder.

31
Q

How do you create a Life Estate without a remainder?

A

“O to A for life.”

32
Q

How do you create a Life Estate with a remainder?

A

“O to A for life, then to B.”

33
Q

What is a Life Estate Determinable (LED)?

A

A Life Estate Determinable (LED) is a Life Estate with a condition that automatically goes into reversion upon violation of the condition.

34
Q

How do you create a Life Estate Determinable (LED)?

A

“O to A for life if used for residential purposes.”

35
Q

What happens if the condition is violated?

A

The estate automatically goes into reversion to O.

36
Q

What is a Life Estate Subject to Condition Subsequent (LESCS)?

A

A Life Estate Subject to Condition Subsequent (LESCS) is a life estate with a condition that confers the right of reentry upon violation of the condition. This is also a form of reversion.

37
Q

How do you create a Life Estate Subject to Condition Subsequent (LESCS)?

A

“O to A for life on condition that the property is used for residential purposes; in the event it is not so used, O shall have a right of entry.”

“O to A for, but if used for nonresidential purposes, O shall have the power to terminate the grant.”

“O to A for life, provided that the property is used for residential purposes; if this condition is violated, O shall have a right of entry.”

38
Q

What is a Life Estate Subject to Executory Limitation (LESEL)?

A

A Life Estate Subject to Executory Limitation (LESEL) is a life estate with a condition that upon violation grants a remainder in a third part.

39
Q

How do create a Life Estate Subject to Executory Limitation (LESEL)?

A

“O to A for life, then to B.”

40
Q

What must a future interest problem always end with?

A

Fee Simple Absolute.

41
Q

What is is the future interest of a Fee Simple Determinable (FSD) called?

A

Reverter

42
Q

What is the future interest of a Fee Simple Subject to Condition Subsequent (FSSCS) called?

A

The Right of Reentry

43
Q

What is the future interest of a Fee Simple Subject to Executory Limitation (FSSEL) called?

A

Executory Interest

44
Q

What is the future interest of a life estate called if it goes back to the grantor?

A

Reversion

45
Q

What is the future interest of a life estate called if it goes to a third party?

A

Remainder

46
Q

Are all remainders the same?

A

No, there are vested remainders and contingent remainders.

47
Q

What is a vested remainder?

A

A vestered remainder is a remainder that is a person that we know will be able to gain the benefit.

48
Q

What is an example of a vested remainder?

A

O to A for life, then to B.

49
Q

Why is B a vested remainder in “O to A for life, then to B.”

A

B is a vested remainder because we know who B is and B is guaranteed the estate.

50
Q

What is an example of a contingent remainder?

A

“O to A for life, then to B’s first-born child.” if B does not have children.

“O to A for life, then to B’s children if they survive A.”

51
Q

Why is B’s first-born child a contingent remainder if B does not have children in “O to A for life, then to B’s first-born child.”

A

B’s first-born child is a contingent remainder because we do not know who they are yet.

52
Q

Why are B’s children who survive A a contingent remainder in “O to A for life, then to B’s children if they survive A.”

A

B’s children are all contingent remainders because we do not know if any of them will survive A.

53
Q

What is the Rule Against Perpetuity (RAP)?

A

“No interest is good unless it must vest, if at all, no later than 21 years after the death of some life in being at the creation of the interests.”

54
Q

How can we tell if a future interest violates RAP?

A
  1. Assume everyone involved dies.
  2. Will the future interest be satisfied within 21 years after the death of the measuring life?
55
Q

What is an example of how to solve a RAP problem?

A

Problem: “O to A for life, then to A’s children, then A’s grandchildren.”

Q1. What kind of future interest is this?
A1. This is a life estate.

Q2. What kind of conditions are there for this future interest to vest?
A2. There are no conditions.

Q3. Who are the measuring lives in this?
A3. A is the measuring life, because A is the only person specified.

A’s children and grandchildren are not specified.

If it said O to A then to B and C, then A, B, and C, would all be measuring lives.

Q4. Do we know if the future interest is certain to vest within 21 years of the death of the measuring life?
A4. Assume A dies.

All of A’s children are certain to vest within 21 years of the death of A, because they’re already alive.

If there is any possibility that A would not have children within 21 years (e.g., due to his children all dying at the same time), then this future interest (“and then to A’s grandchildren”) must be stricken for violating RAP.

56
Q

What are the three historical rules limiting contingent remainders?

A
  1. Destructibility Rule
  2. The Rule in Shelley’s Case
  3. The Doctrine of Worthier Title
57
Q

What is the Destructibility Rule?

A

A contingent remainder will be destroyed if it is still contingent at the time the preceding estate ended.

58
Q

What is an example of the Destructibility Rule?

A

“O to A for life, then to B if B at least 21.”

Under the Destructibility Rule, if B is under 21 at the time of A’s death, then his future interest in the property is destroyed and the property would take the property in FSA.

59
Q

What happens if the Destructibility Rule is not followed for purposes of “O to A for life, then to B if B at least 21.”

A

If B is not 21 at the time of A’s death, then O would hold the property until B is 21.

Once B is 21, B would take the property.

60
Q

What is the Rule in Shelley’s Case?

A

Interpret “O to A for life, remainder to A’s heirs” as “O to A in FSA.”

61
Q

What is the Doctrine of Worthier Title?

A

In “O to A for life, then to O’s heirs”, the ‘then to O’s heirs’ is unnecessary because a life estate would end with reversion.

62
Q

What are the State Modifications?

A
  1. Wait and See Approach
  2. Cy Pres
  3. 90-Year Approach
  4. Statutory Cut-Offs
  5. Recording Statutes
63
Q

What is the Wait and See Approach state modification??

A

Wait to see if interest vests in 21 years after death of last life in being and I fit does not, strike the future interest and leave it in the current possessor’s hands.

64
Q

What is the Cy Pres state modification?

A

Change the period and reduce to 21 years if necessary (if original period was close).

65
Q

What is the 90-year Approach state modification?

A

Just wait 90 years (or whatever statute says) after the conveyance and see if the interest vested within that time.

66
Q

What is the Statutory Cut-Offs state modification?

A

Statutory cut-offs for rights of re-entry and reverter (interests O has).

67
Q

What is the Recording Statutes state modification?

A

Marketable title acts may require recording the interests according to specified periods.

Property Law (8 decks)

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