Future Interests Flashcards
What does a future interest give its holder?
The right of possibility of future possession of an estate
What is a future interest legally?
A present, legally protected interest.
What future interests are retained by a transferor/grantor?
1) possibility of reverter
2) right of entry
3) reversion
What future interests are retained by a third party other than the original transferor/grantor?
1) contingent remainder
2) vested remainder
3) executory interest
What does a possibility of revert-er accompany?
1) fee simple determinibles
What future interest accompanies fee simple subject to condition subsequent?
2) right of entry
What is a reversion? example?
The estate left in grantor who conveys less than what they own
ex: to a for life
What does a reversion arise by?
An operation of law
What are the characteristics of a reversion?
It’s transferrable
devisable
descendible
What can a holder of a reversion sue for?
Waste and tortious damage to reversion interest
What does a right of entry arise by?
Activation by the grantor exercising his right of entry
What is a reversionary interest vesting status? What does this implicate?
All reversionary interests are vested.
This means it is not subject to RAP.
What must a remainder be?
Expressly created.
What are the vesting status of remainders? what does this implicate?
They can either be vested or contingent. If it is contingent it is subject to RAP.
What can’t a remainder be crafted to do time wise?
It cannot follow a time gap after the preceding estate. If there is a gap of even 1 minute, it reverts back to original grantor.
What do remainders always accompany?
A preceding estate of known fixed duration.
Because a remainder can’t cut short its preceding estate, what can’t it follow?
A fee simple estate.
When is a remainder a contingent remainder?
When it:
1)is created in UNBORN OR UNASCERTAINED persons
2) it’s SUBJECT TO A CONDITION PRECEDENT
3) or both
In plain English, what may a remainder be contingent on?
1)a person
2) event
Why is a remainder created for unborn or unascertained people contingent?
Because there is no discernible remaindermen.
2) Until a remaindermen is ascertainable, no one is ready to take possession if the preceding estate ends.
At common law, what was the rule destuctability rule? What is the modern rule
If it failed to vest before or upon termination of a preceding freehold estate.
It will be converted to an executory interest.
What order should a condition subsequent appear in the language around it?
Before the language creating the remainder.
What is the rule in shelley’s case?
At CL:
1) if the same instrument created a life estate in A
2) and gave the remainder to A’s heirs,
3) the remainder was void and A took life estate and remainder.
What is the rule in shelley’s case most often on the MBE?
A wrong answer,
What is the doctrine of worthier tile?
A remainder in the grantor’s heirs was invalid.
Remainder becomes a reversion to the grantor.
How does modern courts treat doctrine of worthier title?
Grantor’s heirs have a contingent remainder.
If a rule violates the destructability of contingent remainder, what do modern courts do?
1) Property reverts to grantor
2) Transferee’s children have a
3) springing executory interest
What is DOWT treated as?
A rule of construction
What is a rule of construction?
It does not apply if an intent to create a remainder in heirs has been clearly manifested
What does DOWT apply to?
Inter vivos transfers
2) not wills
3) and only if word heirs is used
What is a vested remainder?
One created in:
1) existing and ascertained persons
AND
2) not subject to condition precedent?
What are the types of vested remainders?
1) indefeasibly vested remainders
2) vested remainders subject to total divestment
3) vested remainders subject to open
What is an indefeasibly vested remainders?
A vested remainders
2) that is not subject to
3) divestment or
4) dimunition
What is true about the holder of an indefeasibly vested remainders?
They are certain to acquire an estate in the future
What is a vested remainders subject to total divestment?
a vested remainders
2subject to
3) a condition subsequent
What does a condition precedent create
a contingent remainder
What does a condition subsequent create?
a vested remainder subject to total divestment
What is the comma rule?
When conditional language in a transfer
2) follows language that
3) taken alone and set off by commas
4) would create a vested remainders
5) it’s a condition subsequent
You have a vested remainder subject to complete defeasance.
If language is vague, what is the legal preference?
Vested remainders subject to complete divestment.
What is a vested remainders subject to open?
A vested remainders created in a class of persons
2) that is CERTAIN to become possessory
What are vested remainders subject to open vulnerable to?
Dimunition
In plain English, what is a vested remainders subject to open?
1_There is a groop of persons
2) at least one is qualified to take possession of an estate
3) but each group member’s share could get smaller with additional people who become eligible
What is a class?
A group of persons with common characteristics
When is a class gift vested subject to open?
When at least one group member already currently exists
When is a class gift contingent?
When all group members are unascertained.
What is the rule of convenience?
A class closes when some member of the class can call for distribution of their share of the class gift.
In a class gift, must a class member who makes it to the time of closing survive to share in a future gift?
No, unless survival was an expres condition.
What does “to a for life, remainder to those of b’s children who survive a” create?
A contingent remainder.
What is an executory interest?
1) a future interest
2) in a third party
What does a shifting executory interest always follow?
a Defeasible fee.
What does a shifting executory interest always cut short?
someone’s interest other than the grantor
What are the future interests in Transferee’s subject to RAP?
Vested remainders subject to open
2) contingent remainder
3) shifting executory interest
4) springing executory interest
“To A for life, remainder to B and her heirs; but if B predeceases A, then to C and his heirs”
What is an example of a shifting executory interest?
To a when and if he becomes a doctor
Example of a springing executory interest?
To A for life, then two years after A’s death, to B
What is a springing executory interest
What does a springing executory interest cut short?
The grantor’s interest
Grant from O: “To A and her heirs when A marries B”
Springing executory interest
In grant from O “to A for life, then to B and his heirs, but if B predeceases A, then to C and his heirs
C has a shifting executory interest
If B does not out live A, C will take and deprive B’s estate of B’s interest
