Future Interests Flashcards
Reversionary Interest
Back to original grantor if something left over at the end – always considered vested (ex. O in a life estate)
Restraints on Alienation
Absolute restraints = bad prevent someone from selling
Absolute restraints on alienation are void as a matter of law (ex will says cannot sell property during their lifetime – prohibit owner from transferring property). Partial restraints may be valid under the circumstances (ex. property cannot be sold to a non-family member – restrict transfer in certain ways). Courts will look to reasonableness.
Future Interests
A future interest is a presently owned interest in land in regard to which the right of possession is delayed until some time in the future (ex have ownership but not possession)
Present interest
(Always vested)
The interest owned by the party who is entitled to the right to possession at the present time. (Ex: O to A for life – A has the present possessor interest)
Reversion (can be created only in the grantor-grantor’s estate)
A reversion is a grantor’s interest that remains when an interest less than a fee simple ends
Right of re-entry (can be created only in the grantor-grantor’s estate)
Occurs when a fee simple subject to a condition subsequent fails and the grantor has the right to seek retaking the property, but the right must be enforced by grantor.
Remainders
A remainder (either vested or contingent) occurs after the natural expiration of the previous estate. (ex O to A for life, then to B – B has a remainder interest)
Vested Remainder (future interests in 3rd party grantees)
A remainder in an ascertained person and there are no conditions to the taking by the remainderman.
They are alienable, devisable, and descendible. (always remember death is not a condition, so a remainderman in life estate is generally vested)- alienation of vested remainder
Contingent remainders (future interests in 3rd party grantees)
Contingent remainders can occur in two different ways: (1) the beneficiary is unascertained; or (2) there is a condition that must be met for the reminder interest to be conveyed to the beneficiary
Executory interest (future interests in 3rd party grantees) reality vs CL
An executory interest takes effect only if a previous estate was terminated. The holder of the executory interest divests the previous holder of the estate. (divest- take something away) – takes effect only upon the occurrence of a specific event, which will divest (cut short) prior interest holder
Vested subject to open (type of 3 vested)
Occurs when there is a vested remainder but the terms of the conveyance may allow other vested remainders
Ex.: O to A for life, remainder to A’s children and their heirs. At time of conveyance, A has 2 children. (Note: At birth of 1st child, interest is vested – subject to open.)
Vested Remainder Subject to Complete Divestment (type of 3 vested)
A future interest that has vested, but which may be destroyed by an event that could occur after the vesting of the interest but before the interest becomes possessory.
Ex.: O to A for Life, Remainder to B and his heirs, but if B dies without a daughter surviving him, then to C and his heirs.
Absolutely Vested Remainder (type of 3 vested)
A vested remainder is the absolute right to receive title when a presently existing interest in real property ends. It is certain to transfer after the existing interest expires, and is not dependent on any conditions or other events occurring. – no conditions and holder of remainder is certain to receiving property
Ex.: O to A for Life Remainder to B and his heirs.
The Doctrine of Merger
merger occurs when two estates become held by the same person creating a fee simple / Ex: O to A for life, then to B – A sells the life estate to B, therefore B holds A’s life estate and the remainder in fee simple (B holds complete ownership)
The Doctrine of the Destructibility of Contingent Remainders
applies only to contingent remainders
A remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate / Ex: O to A for life then to B if B reaches age 21 – Presume B is only 10. If A dies before B reaches 21, the entire contingent remainder is destroyed because it’s still contingent when the preceding estate ends. O has reversion. No solutions, just a rule. (modernly it goes to O until B can get it)
