future interests Flashcards
how many future interest are there
6
how many future interests that are capable of creation in grantor
3)
Future interests capable of creation in the grantor
1) possibility of reverter
2) right of entry
3) reversion
what does the possibility of reverter accompanied by
fee simple determinable
what does the right of entry accompanied by
fee simple subject to condition subsequent
- NOT AUTOMATIC
the 3 future interests in transferees
1) vested remainder
2) contingent remainder OR
3) executory interest (2 types
(a) shifting
(b) springing
what do remainder interests follow?
life estates or term of years
- remainderman always accompanies a preceding estate of fixed duration
what does a remainder never follow
a defeasible fee
what if the present estate is a defeasible fee, what type of future interest will it be if held by 3rd party
executory interest
when is a remainder VESTED
if BOTH
1) ascertained person (KNOWN) AND
2) NOT subject to any condition PRECEDENT
when is a remainder CONTINGENT
if it is created in either
1) UNKNOWN person (unascertained person) OR
2) IS subject to condition PRECEDENT or both
contingent remainders and RULE OF DESTRUCTIBILITY OF CONTINGENT REMAINDERS
at CL a contingent remainder was DESTROYED if it was
1) CONTINGENT at the time of
2) PRECEDING ESTATE ended
ML for destructibility
has been abolished. O or O’s heirs would hold the estate subject to B’s springing executory interest
has IL abolished the Rule in Shelley’s case
YES
- Thus, today when O conveys “To A for life, then to A’s heirs”
A has: life estate
A’s not yet known heirs: contingent remainder
O: has reversion
doctrine of Worthier Title (also known as rule against a remainder in grantor’s heirs)
(still applies in most states today) applies when
O who is ALIVE, tries to create a future interest in her heirs
- O , who is alive, conveys to “A for life, then to O’s heirs” if doctrine of WORTHIER TITLE DID NOT APPLY
A: life estate
O heirs: contingent remainder
if did apply
A: life estate
O: reversion
is doctrine of worthier title abolished in IL
YES
is the Doctrine of Worthier Title a rule of construction?
YES, not a rule of law
- Grantor’s intent controls. If grantor intends to create a contingent remainder in his heirs, that intent is binding
3 types of VESTED remainders
1) indefeasibly vested remainder
2) vested remainder subject to total divestment
3) vested remainder subject to open
what is the indefeasibly vested remainder
holder of the remainder is CERTAIN to acquire an estate in future with NO STRINGS ATTACHED
what makes a vested remainder subject to total divestment
no condition precedent but CONDITION SUBSEQUENT that could cut estate
what is the comma rule for vested remainder subject to total divestment
when conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent
when is a vested remainder subject to open
when at least ONE group of takers is qualified to take BUT 2) each class members share is subject to partial diminution b/c additional members can still join
when is a class open
if others can join
when is a class closed
when others cannot join
when is a class closed at CL (rule of convenience)
class closes w/e any member CAN DEMAND POSSESSION
x/c to rule of convenience (when a class is closed at CL)
the womb rule, if a child is in child at death of parent, will share with other children who can demand possession
what is an executory interest
a future interest created in transferee (a 3rd party) which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or heirs (springing)
what must a SHIFTING executory interest follow
defeasible fee
what does a SHIFTING executory interest cut short (whoms interest)
a THIRD PARTIES interest
- NEVER GRANTOR’S
what rule to always think of with executory interests
RAP rules against perpetuates
what does a SPRINGING executory interest cut shot (whoms interest)
GRANTOR’S rights
the rule against perpetuties (RAP)
any interest MUST vest or MUST fail within a life in being plus 21 years.
what are the only future interests that RAP applies to
1) contingent remainders
2) executory interests
3) certain vested remainders subject to open
what rights does RAP NOT apply to
1) any future interests to grantor or heirs
2) indefeasible vested remainders
3) vested remainders subject to total divestment
4 steps for RAP
1) classify future interest
2) Identify conditions precedent to the vesting of suspect future interest
3) find all possible measuring life (alive at time of conveyance)
4) ask if we will know in 21 years of death of measuring life if can take or will fail
2 bright line rules for RAP
1) a gift to an OPEN class that is conditioned on the members surviving to an age BEYOND 21 violates CL RAP
2) many SHIFTING executory interests violate RAP. An executory interest with no limit on the time w/i which it must vest violates RAP
what happens if violates rap
entire conditional clause is stricken
charity- charity X/C rap
a gift from one charity to another charity does NOT violate rap
- To red cross, so long as the premises are used for Red cross purposes, and if they cease to be so used, then to YMCA
wait and see or second look doctrine for RAP
majority reform, future interest is determined on the basis of the facts as they now exist AT END OF MEASURING LIFE
uniform statutory rule against perpeutities (USRAP)
90 year waiting period
cr pres doctrine
as near as possible
- if violates RAP a court may reform it in a way that most closely matches grantors intent, while complying with the RAP
what is the IL approach for rap
the reduction of any offensive agent contingency is reduced to 21 years
is language in a deed “for the purpose of” constitute a fee simple determinable
NO. MERELY expresses the grantors MOTIVE fro conveying the property. Not express.
- need words like “for so long as” or “until” to create
what does a life tenant have to pay on the mortgage
pay the interest on any encumbrances on the land, but does not pay anything on the principal of the debt; reversioners or remainderman must pay the principal
if future interests can be transferred voluntary can they also be reached involuntary by creditors
YES.
- all vested remainders fully transferable during life.
