Future Interests

Question 1

Possiblity of Reverter

Answer 1

A future interest in the grantor that follows a determinable estate.

Creation:

• Automatic when a fee simple determinalbe is created

Upon the happenining of the event:

• The property automatically passes back to grantor

Question 2

Right of Reentry (Power of Termination)

Answer 2

A future interest in the grantor that follows a fee simple or life estate subject to a condition subsequent.

Creation:

• Must be spelled out in the conveyance

Upon the happening of the event:

• the property will not automatically revert back to the grantor. The grantor has to exercise the right of entry and affirmatively retake the property.

Question 3

Reversion

Answer 3

a future interest retained by the grantor when the grantor transfers less than a fee interest to a third person.

Question 4

Executory Interest

Answer 4

A future interest created in favor of a 3rd party which cuts short the preceding estate before it naturally would have terminated

Question 5

Types of Executory Interests

Answer 5

1. Shifting executory interest (passes from one 3rd party to another)
2. Sprining executory interest (passes from grantor to 3rd party)

Question 6

Remainder

Answer 6

a future interest that follows naturally the termination of the preceding estate

Question 7

Contingent Remainder

Answer 7

any remainder that is not vested

Question 8

Vested Remainder

Answer 8

Requirements:

1. Created in an ascertainable person
2. there must not be any condition precedent to the 3rd party taking other than termination of the preceding estate

Question 9

Vested Remainder Subject to Open

Answer 9

Requirements:

1. has been made to a class (e.g., “my children”); and
2. has at least one member who is ascertainable and who has satisfied any conditions precedent to vesting, but may have other members join the class later.

Question 10

vested remainder subject to complete divestment

Answer 10

A vested remainder that can be lost