Future Interests Flashcards
3 Interests retained by the transferor
Reversion
Possibility of reverter
Right of entry
3 Interests created in a transferee
1) Vested remainder (indefeasibly vested, vested remainder subject to complete defeasnce, vested remainder subject to open)
2) Contingent remainder
3) Executory interests (springing and shifting)
Interests retained by the transferor - reversion
1) It is called a version because the land would revert to grantor
2) Reversion is the interest remaining in the grantor who transfers a vested estate of a lesser quantum than that of the vested estate which he has
3) All reversions are retained interests which remain vested in the grantor
EX: O conveys, “To A for life” - O has a reversion in fee simple absolute
Interests retained by the transferor - possibility of reverter
1) Fee simple determinable (FSD) —> Possibility of reverter (POR)
2) POR only accompanies FSD
3) O conveys “To A [and their heirs] as long as ____” or “during ____” or “until ___”
a) O has a possibility of reverter in fee simple absolute
As soon as limitation as been breached reversion is automatic
Interests retained by the transferor - Right of entry
1) Right of entry accompanies only the fee simple subject to condition subsequent
2) O conveys “To A but if X event occurs, grantor reserves the right to renter and retake”
O has right of entry in fee simple absolute also the power of termination in fee simple absolute
Interests created in a transferee - Indefeasibly vested remainder
- Holder is certain to acquire an estate in the future with no strings or conditions attached
- O conveys, “To A for life, then to B and their heirs” A & B are alive
A has a life estate, B has an indefeasibly vested remainder in fee simple absolute
Interests created in a transferee -Vested remainder subject to open
} Remainder is vested in group, category or class of takers at least one of whom is qualified to take possession
} If no one is yet qualified to take then it would be a contingent remainder
} “To A for life, then to B’s Children” A is alive, B is alive & has two children C and D
C and D have vested remainders in fee simple absolute subject to open, their share can be decreased if B has another child
Interests created in a transferee - Vested remainder subject to complete defeasance
- Remainder exists and her taking is not subject to any condition precedent but her right to possession could be cut short because of a condition subsequent
- Vested remainder subject to complete defeasance is always followed by an executory interest
- Class is either open or closed which is determined by rule of convenience or the natural closing of the class
RC = When time designated in conveyance for distributing to a class has arrived and at that time there exists a member of the class entitled to take distribution
NC = when the possibility of births or adoption ends
Interests created in a transferee - Contingent remainder
Created in unascertained person or unknown person or is subject to a condition precedent or both
- O will always have a reversion in fee simple incase unknown person doesn’t take
COMMA RULE
If it is unclear from the language of the conveyance that the remainder is contingent or vested, courts apply the comma rule as an interpretive device
[Words creating remainder along with words creating condition] = Contingent remainder in FS
[Words creating remainder] , [words creating condition] = vested remainder in FS subject to complete defeasance
Executory interests
A future interest created in a transferee which is not a remainder and takes effect by divesting another interest
Either springing or shifting
Executory interests - springing
Follows a defeasible fee and cuts short someone other than O the grantor or follows certain vested remainders
Executory interests - shifting
Takes effect by cutting short or divesting O the grantor
