Future Interests Flashcards
Future Interest
Is an interest, which is capable of becoming present, possessory at some future time.
Either Remainder or Executory
Remainder
Future interest capable of becoming possessory immediately upon the natural termination of the preceding freehold estate.
Common Law - Remainder cannot follow and estate for years because an estate for years is nonfreehold and there is no siesin
Modern Law - Contra
Executory Interest
Future interest that is not a remainder.
Shifting - Cut short an estate
Springing - Express gap in seisin
Common Law - Executory interest were void.
Vested Remainder
Remainder in an ascertained person, with no condition precedent. There can be condition subsequent.
Absolutely Vested - O to A for life then to B
Subject to Partial Divestment - O to B then to B’s Children who reach age of 25
Subject to Total Divestment - O to A for Life then to B but if Bar Exam abolished then to C
Contingent Remainder
Remainder to an unascertained person, or an ascertained person with a condition precedent.
Alternative Contingent Remainder
Two Remainders or two executory interests stemming from the same condition. O to A for life, then to B if he quits smoking, if not, then to D.
Technical Rules
Shelley Must Walk Down Purfoys Road
Shelly's Case - Grantee Merger Worthier Title - Grantor Destructibility of Contingent Remainders Purfoy v Rogers Rule Against Perpetuities
Shelley’s Case (Common Law)
If one instrument creates a life estate or fee tail and also attempts create a remainder in favor of the grantee’s heirs or heirs of body, and where both estates are either legal or equitable, the remainder becomes the remainder in the grantee.
O to A for life, then the heirs of A apply shelly's rule resulting in: O to A for life, then to A and his heirs apply Merger: O to A and his heirs
Merger
When there are two successive vested estates of the same land owned by the same person, smaller of the two estates will be absorbed.
Worthier Title
Prohibits remainder and executory interest in heirs of grantor. Must use “heirs”, if “children” used, do not apply
O to A for life then to heirs of O
apply rule:
O to A for life
Destructibility of Contingent Remainders (Common Law)
If contingent remainder did not vest at the expiration of the preceding freehold estate, then it is destroyed.
Modern Law - abolished in most jurisdictions
Rule Against Perpetuities (RAP)
No interest is good unless it must vest, or fail to vest, if at all, within 21 years after some life in being at the creation of the interest.
Applies to contingent remainders, executory interests and class gifts, does not apply to Vested interests, possible reverter/right of entry or charity to charity.
Special Rules
Fertile Octogenarian Rule - To C then to C’s children then to C’s grandchildren. Will fail due to RAP as C can have more grandchildren that will extend pass the perpetuities period.
Unborn Widow Rule - To B for life then to B’s widow then to B’s children. Fail as B can marry a women not yet born.
Wait and See Doctrine - If the interest does vest or fail within perpetuities period, interest is valid even if potentially violated RAP.
Class Gifts
Class gifts require an application of RAP.
If an afterborn child can enter the class with a grant that is invalid due to RAP.
Rule of Convenience - The class closes when it is time for distribution and a qualified member is ready to take.
If Open: Will class close within 21 years, if no invalid.
