Future Interests Flashcards
What is a future interest?
Future interests are presently existing property rights that may become possessory in the future which give legal rights to the holder.
What can a transferee do with a future interest?
A transferee may sell, give away, and devise his/her future interest.
What rights does a transferee have against an adverse possessor or trespasser?
A transfere may sue a third party injuring the land or trying to hostilely claim title.
What rights does a transferee have against predecessors in possession?
The transferee can enjoin its predecessor in possession from committing waste on the property.
O to A for life, then to B and his heirs. B can enjoin A.
Through what type of succession can future interests be conveyed?
Through testate and intestate succession
Mahrenholz v. County Board of School Trustees: the for school purposes only case
Is restraint on sale or transfer a valid condition?
No, not a valid condition under a defeasible fee.
Mountain Brow Lodge v. Toscano: the parking lot case
What are the three interests retained by the transferor?
- Reversion
- Possibility of reverter
- Right of entry
Reversion
Reversions occurs following the natural termination of a life estate, term of years, or fee tail. It gives the rights back to the transferor.
Possibility of reverter
An automatic reversion to the transferor after a condition is met in a fee simple determinable
Right of entry
Gives the transferor the discretion of whether or not to take back the property rights after a conditoin is met in a fee simple subject to condition subsequent
What are the three interests retained by the transferee?
- Vested remainder
- Contingent remainder
- Executory interest
What is a vested remainder?
It is a future interest in a third party following a life estate, term of yeras, or fee tail given to an ascertained person (born and identified) and not subject to a condition precedent.
O to A for life, then to B. A has a life estate, and B has a vested remainder.
Does O retain a reversion if there is a vested remainder?
No
What is vested subject to open?
If a party has a vested remainder, but more people could be joined
O to A for life, then to A’s children who shall reach 21. A’s oldest child is B, who is 21. A could still have more children, so B’s remainder is vested subject to open.
What is a contingent remainder?
A remainder where the takers are unascertained or the remainder is subject to a condition precedent. Not certain to become possessory.
- O to A for life, then to the heirs of B. A has a life estate, and the heirs of B have a contingent remainder because they are unascertained people.
- O to A for life, then to B and her heirs if B survives A. A has a life estate, and B has a contingent remainder because B’s remainder is subject to condition precedent.
If a remainder is contingent, does O retain a reversion?
Yes
Condition precedent vs. condition subsequent
Condition precedent is a condition or event that must happen before the remainderman can take the property or become vested. Condition subsequent is a condition or event that may occur after the estate has become vested or possessory, and results in the property being lost to someone else.
Condition precedent = condition inside the punctuation
Condition subsequent = condition outside the punctuation
What is the doctrine of destructibility of contingent remainders?
If the remainderman hasn’t satisfied the condition before the preceding life estate ends, the contingent remainder is destroyed.
What effect does abolishing the doctrine of destructibility have?
The contingent remainderman will have a chance to meet the condition. O will have a FSSEL (babysitting the property) while waiting for the condition to be met. The remainderman now has an executory interest. When the condition is met, it becomes a fee simple absolute.
What is an executory interest?
A future interest following (1) a fee simple determinable, (2) a fee simple subject to executory limitation, or (3) a vested remainder in fee simple that, upon the occurrence of a stated event that may occur, automatically divests the possessory fee simple or vested remainder.
O to A for life, then to B and his heirs, but if B dies under the age of 21, to C and her heirs. B is age 15. A has a life estate, B has a vested remainder because B is ascertained and there is no condition precedent. So B’s vested remainder is subject to executory limitation and C has an executory interest.
If the first future interest created is a contingent remainder . . .
then the second future interest in a transferee is a contingent remainder also.
If the first future interest created is a vested reaminder . . .
the nthe second future interest in a transferee is an executory interest.
When must a remainder be created?
At the same time as the life estate, term of years, or fee tail
Are either vested or contingent remainders transferable?
At early common law, contingent remainders were thought of as the mere possibility of becoming an interest and were not assignable or capable of being reached by creditors. Vested remainders have always been transferable during life and at death. The modern treand is now to allow contingent remainders to be transferred during life and reachable by creditors.
