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Property > Future Interest in Transferee > Flashcards

Future Interest in Transferee Flashcards

1
Q

Retained by Transferor (3)

A
  1. Reversion
  2. Possibility of Reverter
  3. Right of Entry
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2
Q

Passed to Transferee (2)

A
  1. Remainder

2. Executory Interest

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3
Q

Types of Remainders (2)

A
  1. Vested

2. Contingent

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4
Q

Types of Vested Remainders (3)

A
  1. Indefeasibly Vested
  2. Vested Subject to Total Divestment
  3. Vested Subject to Open (or Partial Divestment)
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5
Q

Reversion

A

Transfers a lesser estate

– also effectively a catch all for other unspecified residual interests where grantor transfers less than full interest in property

Fully transferrable at life and death

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6
Q

Possibility of Reverter

A

She creates a determinable estate of the SAME QUANTUM

Most likely fully transferrable (but some states retain CL restrictions)

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7
Q

Right of Entry

A

Follows an estate SUBJECT TO CONDITION SUBSEQUENT

Often fully transferrable but more likely subject to CL restrictions

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8
Q

Remainder

A

Must be possible (but not certain) to take effect at natural end of prior estate

– Tip: never follows a fee simple estate because a fee has no “natural” end

NOTE: also possible to have a combination Vested Subject to Open and Subject to Divestment

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9
Q

Executory Interest

A

Divests or cuts short prior estate or interest

– Tip: generally has to follow a vested estate/interest

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10
Q

Vested

A

Given to at least one ascertained person AND not subject to any condition precedent

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11
Q

Contingent

A

Given only to unascertained persons OR subject to some condition precedent occurring other than natural termination of preceding event

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12
Q

Indefeasibly Vested

A

All identified takers, cannot be divested

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13
Q

Vested Subject to Total Divestment

A

Where a shifting interest in a transferee can divest a vested remainder before it becomes possessory (think condition subsequent)

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14
Q

Vested Subject to Open (or Partial Divestment)

A

Remainder in a class of persons in which one member is ascertained and there is no condition precedent, but new class members may still be identified

• Note: Unborn children have some contingent interest until the class closes – what is it? (In the clouds?)

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15
Q

“O TO A FOR LIFE, THEN TO B IF B GRADUATES FROM LAW SCHOOL.” B has not been to law school. Identify any future interests.

A
  • B has a contingent remainder in FSA (subject to condition precedent of B graduating from law school before vesting)
  • O has a reversion in FSA.
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16
Q

“O TO A FOR LIFE, THEN TO THE MEMBERS OF SHOEMAKER’S PROPERTY CLASS IN 2026.”

Conveyance occurs in 2017. Identify any future interests.

A
  • Future property class members have a contingent remainder in FSA. (There are no identified takers in this group yet! Remainder “in the clouds”?)
  • O has a reversion in FSA.
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17
Q

Vested vs. Contingent:
Why Does This Distinction Matter?
[P.T.D.R.S.]

A
  • When Take POSSESSION: vested accelerates in possession whenever and however preceding estate ends, contingent cannot if contingency still exists
  • TRANSFERABILITY During Life: CL said only vested transferable; modern rule both transferable
  • DESTRUCTIBILITY: CL said contingent remainders destroyed if still contingent when preceding estate terminated; modern rule says remain valid and take effect at end of contingency (see reading on Doctrine of Destructibility of Contingent Remainders for next week)
  • RAP Rule Against Perpetuities: generally only contingent interests subject to Rule Against Perpetuities (but we will cover this in much more nuanced detail soon—there are important exceptions)
  • STANDING of Interest Holder: some states recognize vested interest holders have greater standing re: the property than contingent interest holders; vested interest holders may also have stronger claims in situations like waste or other property use conflicts
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18
Q

Vested vs. Contingent:
Why Does This Distinction Matter?
[P.T.D.R.S.]

A
  • When Take POSSESSION: vested accelerates in possession whenever and however preceding estate ends, contingent cannot if contingency still exists
  • TRANSFERABILITY During Life: CL said only vested transferable; modern rule both transferable
  • DESTRUCTIBILITY: CL said contingent remainders destroyed if still contingent when preceding estate terminated; modern rule says remain valid and take effect at end of contingency (see reading on Doctrine of Destructibility of Contingent Remainders for next week)
  • RAP Rule Against Perpetuities: generally only contingent interests subject to Rule Against Perpetuities (but we will cover this in much more nuanced detail soon—there are important exceptions)
  • STANDING of Interest Holder: some states recognize vested interest holders have greater standing re: the property than contingent interest holders; vested interest holders may also have stronger claims in situations like waste or other property use conflicts
19
Q

Vested vs. Contingent:
Why Does This Distinction Matter?
[P.T.D.R.S.]

A
  • When Take POSSESSION: vested accelerates in possession whenever and however preceding estate ends, contingent cannot if contingency still exists
  • TRANSFERABILITY During Life: CL said only vested transferable; modern rule both transferable
  • DESTRUCTIBILITY: CL said contingent remainders destroyed if still contingent when preceding estate terminated; modern rule says remain valid and take effect at end of contingency (see reading on Doctrine of Destructibility of Contingent Remainders for next week)
  • RAP Rule Against Perpetuities: generally only contingent interests subject to Rule Against Perpetuities (but we will cover this in much more nuanced detail soon—there are important exceptions)
  • STANDING of Interest Holder: some states recognize vested interest holders have greater standing re: the property than contingent interest holders; vested interest holders may also have stronger claims in situations like waste or other property use conflicts
20
Q

“O TO A FOR LIFE, THEN TO A’S CHILDREN AND THEIR HEIRS.”
A has one child, B.
What is B’s interest?

A
  • A has life estate.
  • B has a vested remainder subject to open in FS.

• Note: Unborn children have some contingent interest until the class closes – what is it? (In the clouds?)

21
Q

“O TO A FOR LIFE, THEN TO B AND HER HEIRS, BUT IF B DOES NOT SURVIVE A TO C AND HER HEIRS.”

  • B has a vested remainder in fee simple subject to divestment
  • C has an executory interest in fee simple
A

A has a life estate
• B has a vested remainder in fee simple subject to divestment
• C has an executory interest in fee simple

22
Q

DISTINGUISHING REMAINDERS – CONTINGENT VS. VESTED SUBJECT TO DIVESTMENT.
A CONDITION PRECEDENT (CONTINGENT): generally is…

A

A condition that must be satisfied before remainderman has right to claim actual possession

23
Q

DISTINGUISHING REMAINDERS – CONTINGENT VS. VESTED SUBJECT TO DIVESTMENT. A CONDITION SUBSEQUENT (VESTED SUBJECT TO DIVESTMENT): generally is…

A

A condition that applies after an interest becomes possessory and determines how long the interest may last

24
Q

DISTINGUISHING REMAINDERS – CONTINGENT VS. VESTED SUBJECT TO DIVESTMENT. Practical Test:

A

will generally be a condition precedent if (1) express AND (2) either in the same clause creating the remainder or in the preceding clause

25
Q

DISTINGUISHING REMAINDERS – CONTINGENT VS. VESTED SUBJECT TO DIVESTMENT Typical Patterns

A

– Life Estate -› Contingent Remainder(s) -› Reversion
– AND: Contingent Remainder in Fee Simple -› Contingent Remainder in Fee Simple

– Vested Defeasible Estate or Vested Remainder Subject to (Partial/Total) Divestment -› Executory Interest
– AND: Vested Remainder in Fee Simple Subject to (Partial or Total) Divestment -› Executory Interest

26
Q

When/how does title transfer for reversion?

A

AUTOMATIC title transfer/possession at end of preceding estate

27
Q

When/how does title transfer for a possibility of reverter?

A

AUTOMATIC title transfer/possession upon violation of defeasible estate’s special limitation

28
Q

When/how does title transfer for a right of entry?

A

O must act to Re-take

Must elect to retake possession upon violation of preceding defeasible estate’s condition subsequent

29
Q

Rule of Construction: Do we prefer a Contingent or Vested Remainder?

A

Prefer vested over contingent

30
Q

“O TO A FOR LIFE, THEN TO B IF B GRADUATES FROM LAW SCHOOL.”

B has not been to law school. Identify any future interests.

A
  • B has a contingent remainder in FSA (subject to condition precedent of B graduating from law school before vesting)
  • O has a reversion in FSA.
31
Q

State of Title: “O TO A FOR LIFE, THEN TO B AND HIS HEIRS.”

A

– A has a life estate.

– B has an indefeasibly vested remainder in FSA.

32
Q

“O TO A FOR LIFE, THEN TO A’S CHILDREN AND THEIR HEIRS.”
A has one child, B.
What is B’s interest?

A
  • A has life estate.

* B has a vested remainder subject to open in FS.

33
Q

State of Title: “O TO A FOR LIFE, THEN TO B AND HER HEIRS, BUT IF B DOES NOT SURVIVE A TO C AND HER HEIRS.”

A

• B has a vested remainder in fee simple subject to divestment
• C has an executory interest in fee simple
O has reversion

34
Q

State of Title: “O to A so long as used for school purposes.”

A

A - FSD, O - PoR in FSA

35
Q

State of Title: “O to A, but if not used for school purposes, then O may re-take and re-enter.”

A

A - FSSCS, O - RoE in FSA

36
Q

State of Title: “O to A so long as used for school purposes, then to Z.”

A

A - FSD, Z EI in FSA

37
Q

State of Title: “O to A, but if not used for school purposes, then Z may re-take and re-enter.”

A

A - FSSEL, Z - EI in FSA

38
Q

A fee simple determinable ends when?

A

Automatically upon the happening of the stated condition

39
Q

State of Title “O to A as long as the land is used for a school.”

A

A - FSD, O has PoR

40
Q

A fee simple subject to condition subsequent does not end _____ but may be cut short or _______ at the transferor’s election when?

A
  1. Automatically
  2. divested
  3. Upon the happening of the stated condition
41
Q

State of Title: “O to B, but if the land ceases to be used for a school, then O may re-enter and re-take the land.”

A

B - FSSCS, O - RoE in FS

42
Q

State of Title: “O to A as long as the land is used for a school, then to Z”

A

A - FSD, Z - EI in FS

43
Q

State of Title: “O to B, but if the land ceases to be used for a school, then Z may re-enter and re-take the land”

A

B - FSSEL, Z - EI in FS

44
Q

What are the magic words with determinable?

A

Words with a durational aspect e.g. so long as, while, during, until

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