Future Interests Flashcards
Fee Simple Absolute: Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
C/L = None
FI = None
FI 3 = None
Fee Simple Determinable Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
CL = Indefinite
FIG= Possibility of Reveter
FI3 = None
Fee Simple Subject to a Condition Subsequent Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
CL - Indefinite
FIG = Power of Termination or Right of re-entry
FI3 = None
Fee Simple Subject to an Executory Limitations Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
CL = Indefinite
FIG = None
FI3 = Shifting Executory (if no condition precedent) or Springing Executory Interest (Condition precedent)
Life Estate or Terms of Years Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
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
Fee Tail Conditions/Limitations, Future Interest in Grantor, Future Interest in 3rd Party.
CL = Indefinite
FIG = Reversion
FI3 = None
Future Interests ALWAYS subject to RAP
- Contingent remainders
- Executory Interests
- Vested Remainders subject to open
Future Interests NEVER subject to RAP
Vested remainders
Possibilites of reverter
Reversions
Powers of Termination
Future interests sometimes subject to RAP
Options to purchase
Pre-emptive rights
Rights of first refusal
RAP Rule
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
RAP Application
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
Cy Pres
- Rap reformation allowing a trust porvision to be reformed when an unacnticipated circumstance causes trut to fail
Wait and see
Postpones determining question of validty of a future interest that hasnt vested until circumstances make it clear whether it will fail or vest
RAP for Trusts
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
Application of RAP for PA
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
2 Types of Classes for Class Gifts
- 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
Executory Interests
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
Remainders
Follow present estates subject to definite conditions like a life estate or terms of years
Vested Remainder Subject to Open
Identifies a remainder interest in a class of people in which some are known but some are not yet in being
Precedent Conditions
Condition that must occur before interest to vest
Subsequent conditions
Upon condition cause an interest or estate to terminate
