Future Interests

Question 1

What is a future interest?

Answer 1

Future interests are presently existing property rights that may become possessory in the future which give legal rights to the holder.

Question 2

What can a transferee do with a future interest?

Answer 2

A transferee may sell, give away, and devise his/her future interest.

Question 3

What rights does a transferee have against an adverse possessor or trespasser?

Answer 3

A transfere may sue a third party injuring the land or trying to hostilely claim title.

Question 4

What rights does a transferee have against predecessors in possession?

Answer 4

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.

Question 5

Through what type of succession can future interests be conveyed?

Answer 5

Through testate and intestate succession

Mahrenholz v. County Board of School Trustees: the for school purposes only case

Question 6

Is restraint on sale or transfer a valid condition?

Answer 6

No, not a valid condition under a defeasible fee.

Mountain Brow Lodge v. Toscano: the parking lot case

Question 7

What are the three interests retained by the transferor?

Answer 7

1. Reversion
2. Possibility of reverter
3. Right of entry

Question 8

Reversion

Answer 8

Reversions occurs following the natural termination of a life estate, term of years, or fee tail. It gives the rights back to the transferor.

Question 9

Possibility of reverter

Answer 9

An automatic reversion to the transferor after a condition is met in a fee simple determinable

Question 10

Right of entry

Answer 10

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

Question 11

What are the three interests retained by the transferee?

Answer 11

1. Vested remainder
2. Contingent remainder
3. Executory interest

Question 12

What is a vested remainder?

Answer 12

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.

Question 13

Does O retain a reversion if there is a vested remainder?

Answer 13

No

Question 14

What is vested subject to open?

Answer 14

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.

Question 15

What is a contingent remainder?

Answer 15

A remainder where the takers are unascertained or the remainder is subject to a condition precedent. Not certain to become possessory.

1. 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.
2. 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.

Question 16

If a remainder is contingent, does O retain a reversion?

Answer 16

Yes

Question 17

Condition precedent vs. condition subsequent

Answer 17

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

Question 18

What is the doctrine of destructibility of contingent remainders?

Answer 18

If the remainderman hasn’t satisfied the condition before the preceding life estate ends, the contingent remainder is destroyed.

Question 19

What effect does abolishing the doctrine of destructibility have?

Answer 19

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.

Question 20

What is an executory interest?

Answer 20

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.

Question 21

If the first future interest created is a contingent remainder . . .

Answer 21

then the second future interest in a transferee is a contingent remainder also.

Question 22

If the first future interest created is a vested reaminder . . .

Answer 22

the nthe second future interest in a transferee is an executory interest.

Question 23

When must a remainder be created?

Answer 23

At the same time as the life estate, term of years, or fee tail

Question 24

Are either vested or contingent remainders transferable?

Answer 24

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.