Future Interests

Question 1

Fee Simple Absolute: Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 1

C/L = None
FI = None
FI 3 = None

Question 2

Fee Simple Determinable Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 2

CL = Indefinite
FIG= Possibility of Reveter
FI3 = None

Question 3

Fee Simple Subject to a Condition Subsequent Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 3

CL - Indefinite
FIG = Power of Termination or Right of re-entry
FI3 = None

Question 4

Fee Simple Subject to an Executory Limitations Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 4

CL = Indefinite
FIG = None
FI3 = Shifting Executory (if no condition precedent) or Springing Executory Interest (Condition precedent)

Question 5

Life Estate or Terms of Years Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 5

CL = Definite
FIG = Reversion
FI3 = Vested remainder absolute or vested remainder subject to open or a contingent remainder on conditional event or on unascertained persons

Question 6

Fee Tail Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.

Answer 6

CL = Indefinite
FIG = Reversion
FI3 = None

Question 7

Future Interests ALWAYS subject to RAP

Answer 7

• Contingent remainders
• Executory Interests
• Vested Remainders subject to open

Question 8

Future Interests NEVER subject to RAP

Answer 8

Vested remainders
Possibilites of reverter
Reversions
Powers of Termination

Question 9

Future interests sometimes subject to RAP

Answer 9

Options to purchase
Pre-emptive rights
Rights of first refusal

Question 10

RAP Rule

Answer 10

RAP is a rule against remote vesting of a contigent future interest based on the fundamental principal that free alienation of property is vital for a thriving economy

Question 11

RAP Application

Answer 11

Interest must fail or vest within 21 years AFTER death of life in being

Life in being = someone whose life affects whether it will vest or fail being alive at creation of interest

If voided the law implies a reversion back to the grantor

Question 12

Cy Pres

Answer 12

• Rap reformation allowing a trust porvision to be reformed when an unacnticipated circumstance causes trut to fail

Question 13

Wait and see

Answer 13

Postpones determining question of validty of a future interest that hasnt vested until circumstances make it clear whether it will fail or vest

Question 14

RAP for Trusts

Answer 14

States adopted rules limiting actual duation of trusts to deal with duration issue

Mostly same time period for RAP but some extened to 90-100 years

Question 15

Application of RAP for PA

Answer 15

a. A presently exercisable general power of appointment is valid if the power is certain to become exercisable during the perpetuities period
b. A special or testamentary general power of appointment is valid only if the power must be exercised, if at all, within the perpetuities period

Question 16

2 Types of Classes for Class Gifts

Answer 16

• Classes that open and close physiologically
  Classes open when 1st of group is born and closes when relevant person dies
• Classes that open and close instantaneously
  When it closes it takes in all members who meet relevant definition at time

Question 17

Executory Interests

Answer 17

Follow fee interests subject to indefinite conditions

• If subject to a condition precedent it is a springing executory interest
• If no condition other than termination of prior they are shifting executory interests

Question 18

Remainders

Answer 18

Follow present estates subject to definite conditions like a life estate or terms of years

Question 19

Vested Remainder Subject to Open

Answer 19

Identifies a remainder interest in a class of people in which some are known but some are not yet in being

Question 20

Precedent Conditions

Answer 20

Condition that must occur before interest to vest

Question 21

Subsequent conditions

Answer 21

Upon condition cause an interest or estate to terminate