Future Interests Flashcards
reversions
a reversion is the estate left in a grantor who conveys less than she owns. A reversion is alienable, devisable, and inheritable. these are vested and not subject to RAP
remainders
a future interest in a third person that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate, and it cannot follow a time gap after the preceding estate. a remainder must be expressly created in the instrument
Ex. of Remainder
O conveys to A for life, then to B and his heirs
O conveys to A for life, then to B and his heirs one day after A’s death - B does not have a remainder because there is a gap.
indefeasibly vested remainder
a vested remainder is one created in an existing and ascertained person and not subject to a condition precedent
Vested Remainder subject to open
remainder created in a class of persons that is certain to become possessory, but is sibject to diminution ex. O conveys to A for life, then to the children of B. A and B are living and B has one kid C. C has a vested remainder subject to open
Vested Remainder subject to total divestment
this is a vested remainder that is subject to a condition subsequent.
ex. O conveys to A for life, then to B and his heirs; but if B dies unmarried then to C and his heirs. B has a vested remainder subject to complete divestement by C’s executory interest.
contingent remainder
contingent remainders are those created in unborn or unascertained persons, or subject to a condition precedent.
condition precedent
must be satisfied before the remainderman has a right of possession
Contingent remainder examples.
- O conveys to A for life, then to B and his heirs if B marries C.
- to A for life, then to B and his heirs if B marries C, otherwise to D and his heirs. B and D have alternative contingent remainders.
Unborn or unascertained persons
a remainder created in unborn or unascertained persons is contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding estate ends.
Doctrine of Merger
When one person acquires all of the present and future interests in land except a contingent remainder, under the common law, the contingent remainder is destroyed
ex. of Merger
O conveys to A for life, then to B’s children. If before B has any children, O purchases A’s life estate then O will have a life estate pur autre vie and a reversion and the contingent remainder in B’s unborn child is destroyed.
rule in shelleys case
will be a wrong answer choice on MBE - if the same instrument created a life estate in A and gave the remainder only to A’s heirs, the remainder was not recognized, and A took the life estate and the remainder
doctrine of worthier title
A remainder in the grantor’s heirs is ineffective, so the grantor gets a reversion ex. to A for life, then to my heirs at law.
Executory interests
future interests in third parties that either divest a transferee’s preceding freehold estate (shifting) or follow a gap in possession or cut short a grantor’s estate (springing) Subject to RAP because not vested
ex. of springing interest
In a grant from O “to A and his heirs when A marries B, A has a springing executory interest because it divests the grantor’s estate.
ex. of shifting executory interest
In a 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 because it divests a transferee’s preceding estate.
class gifts
a class is a group of persons having a common characteristic. The share of each member is determined by the number of persons in the class. may be open or contingent
when does class close
a class closes when some member of the class can call for distribution of her share ie. life tenant’s death
Survival
survival of a class member to the time of closing is usually unnecessary to share in a future gift unless survival was made an express condition ( to A for life and then to his surviving children) anti lapse statute will save gift for party’s descendants even if there is an express survival condition.
ex. of contingent remainder
to a for life, remainder to those of B’s children who survive A, this looks like vested remainder subject to open but its not because it is contingent on B surviving A.
RAP applies to
contingent remainders, executory interests, vested remainders subject to open, options to purchase, rights of first refusal, and powers of appointment.
when does perpetuities period begin to run
by will - the testators death
deeds- date of delivery
irrevocable trust - date created
revocable trust - date it became irrevocable.
Charity to Charity exception
RAP does not apply when one charity gives to another.
To A for so long as no liquor is consumed on the premises, then to B
violates RAP, executory interest is stricken , A has fsd and O has POR
To A for life, then to those of A’s children who attain the age of 25
gift to an open class on the condition they live beyond 21 violates rule
to A for life, then to A’s children for life, then to A’s grandchildren in fee
A’s grandchildren violates RAP
O conveys to A for life then to A’s widow for life, then to A’s surviving issue in fee.
gift to A’s issue is invalid absent a statute because A’s widow might be a spouse who nos not in being when the interest was created. To A’s children however would be ok.
a gift to my issue surviving at the distribution of my estate
invalid bc estate may be distrubuted beyond RAP
Right of first refusal
if a seller receives a third party’s offer to purchase the property, the right of first refusal gives its holder the right to purchase the property, usually on the same terms as the offer.
Rights of first refusal not person to the holder
if given to holder’s heirs and assigns will violate RAP.
Current lessee or tenant
RAP does not apply. Rule against restraints on alienation applies. valid if it does not impose an unreasonable restraint on alienation.
Bad as to One, Bad as to all Rule
If the interest of any class member may vest too remotely, the whole class gift fails. For the class gift to vest, the class must be closed and all conditions precedent must be satisfied for every member.
gift to subclass
each gift to a subclass may be treated as a separate gift under the Rule.
Per capita gift exception
a gift of a fixed amount to each member of a class is not treated as a class gift under the Rule. ex. 1k to each of my great-grand children, whether born before or after my death.
