Future Interests Flashcards
Future Interests Dividing time
- Law separates the notion of ownership from the think owned. (we own the interest in the land, not the dirt itself). 2. we can divide our interests to different people as to when they have the right to use the land. 3. these interests have unique characteristics and behave in different ways.
Fee Simple Absolute
an interest that extends forward in time for infinity.
(this interest can be divided into smaller interests)
Present interest
Present interest: the right to posses the interest now
Future Interest
Future interest: gives ownership NOW but the right to posses is in the future. you can have a future interest becoming a present interest followed by other future interests.
- look for 2 labels:
a) on the ouside is the term identifying the type of future interest.
b) hidded inside of the clause is the present interest waiting to appear.
Present interests
- FSA- you own everything, (circle)
“and her heirs”. words of limitation describing the estate granted.
Defeasible Fees
- this can be lost in 2 ways. a) through expiration (durational language). b) through divestment (conditional language).
Fee simple determnable (FSD)
executory interest in that third party.
durational language, limits the estate from the start.
- Ask yourself: who does O specify gets the estate. if none then possiblilty of reverter. (it is a posibility because hte event many not happen)
- if fsd to third person the there is an executory interest in that third party.
Fee Simple Subject to conditions Subsequent
Conditional langauge, “provided that”, “on condition that”, “but it” , “provided however”
- if no third party then Grantor has “right of entry”
Interests in Grantor are reversionary
(1. Possibility or reverter (FSD), right of entry (CS) and reversion for life estates or LE w/contingent remainders)
Distinguishing Conditions Precedent and Subsequent
ALWAYS read the clause as a whole! (between the commas
Do the words of ___condition _attached to the ____Future interest come
Come before or after the designation of the taker???
If the designation of the___taker comes first____, it is usually (NOT ALWAYS) a condition___ ____subsequent_________________.
- EX: To B for life then to C and his heirs, But if C fails to reach 17 then to D and his heirs. (remember D had it first then it was ripped away)
Distinguishing Conditions Precedent and Subsequent PART II
If the___ _condition comes first______________, then the____taker is designated _, it is usually, (NOT ALWAYS) a condition ___PRECEDENT.
EX: To B for life , Then if C turns to see in her hiers. That’s a contingent remainder see has to turn 21 before they can take because the condition precedent is turning 21.
O would have a reversion and C would have a springing executory interest.
Alternative Contingent Remainders: you do not know this
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Alternative Contingent Remainders
A pair of contingent remainders that have __opposite conditions precedent.
GENERAL rule: if the first is a ___contingent remainder__remainder, and the one that follows is _a contingent ____________on the outcome of the_____first______________, it is an_____alternative contingent ____remainder.
The general rule is if the first is a contingent remainder. And the one that follows is contingent on the first. So they’re dependent on one another. It’s an alternative contingent remainder
example of Alternative Contingent Remainders: you do not know this
O conveys “To A for life, then to B after she marries C”
B is currently 8 years old and unmarried.
O conveys “To B for life, then to C’s children and their heirs.” At the time of conveyance, B has 1 child, D.
Executory Interests:
Shifting and Springing part I
An executory interest is a future interest that __cuts short _____or __divests a a PRIOR estate___
If a future interest in __a TRANSFERREE___ (any_3RD PARTY__) is NOT a__REMAINDER______________________, it is an ___EXECUTORY INTEREST_.
If a ____TRANSFEREE___(___3RD PARTY___________) is__DIVESTED ___, it is a __SHIFTING____ executory interest.
_POSSESSION____immediately follows the end of a__3rd party__, it is __shifting____executory interest_________.
this is an odd note about spring exec interest after reversion to O on a CONTINGENT REMAINDER, SHE ONLY MENTIONED THIS ONCE!
(if you have a contingent remainder And O, is acting as a placeholder for that condition to be met. Then what comes after is a springing executory interest. So if you have a contingent remainder and the condition is not met, but may be met, then O has a reversion and whoever was supposed to have the contingent remainder has a springing executory interest that rips it away from O who is acting as a placeholder.
SPRINGING EXECUTORY INTEREST
An executory interest divests the _Transferor O___it is __SPRINGING_______
O conveys “to B for life, and then one year after B’s death, to D and his heirs”
B has LIFE ESTATE
O has REVERSION FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION
D has a SPRINING EXECUTORY INTETERT
How can executory interest come after a death?
when death is the condition. It’s not considered the natural end of the prior estates.
number 22 page 7
Death isn’t always a “natural” end to a prior estate!
Death__sometimes can “cuts short” an estate that would have been of potentially infinite duration.
O devises “to G for life, then to H, but if H does not survive G, then to I”
I has an EXECUTORY INTEREST following H’s Death
Notes: · “Then to H but if he does not survive G”, ( will not surviving G is a condition)
That condition on H is holding which would otherwise have been fee simple absolute, this
Means it’s ripped away from H And I gets an executor interest.
If it’s not a REMAINDER it has to be and EXECUTORY INTEREST:
Executory Interest:
In grantee
Follows the divestment of the prior estate
DEATH CAN BE DIVESTMETN IF IT CUTS SHORT THE PRIOR ESTATE: To A but it B outlives A then to C (A death is a condition that signal Executory Interest. (HINT: if it would have been a Fee Simple and death was the condition that makes it not a FS, then Death is a divesting event)
Rules Furthering Marketability- 3 different types of rules.
Rules Furthering Marketability- 3 different types of rules.
Designed to make land easier to transfer
Certain Future interests decrease marketability of land.
We want free alienability (can not have uncertainty in ownership)
Also try to keep people from creating tax fraud
Common Law restricted contingent remainders and executory interests because they are based on uncertainty.
Who is going to get this in the future?
Can this land be sold ? What are the conditions?
Uncertainty makes land difficult to transfer.
Rule Against Perpetuities:
1) No interest is valid
a) an interest is a condition on a transfer.
2) unless it may vest OR fail
a) An interest is “Vested” when we know for sure that someone will receive or fail to receive the interest.
3) Within a life in being + 21 years + 10 months
a) this is a somewhat arbitrary time limit.
b) a “life in being” is measuring life, or someone causally
connected to the interest, that we can use to test whether the condition will fail or vest
c) A measuring life is someone alive now or in the past who we can point to and say that we will know for sure within that person’s
lifetime plus 21 years whether or not the interest will vest.
Rule Against Perpetuities
if it says the grandchildren of X. X is going to be your measuring life or your life and being. if X never has children, then they can never have grandchildren. Therefore,
They have controlled whether this ever happens and it’s failed. You can’t ever have grandchildren of x, if x has never had children so that conveyance has failed. Absolutely. Within the measuring life.
the other thing to look:
forever events, so long as it is used as so long as it is used as a farm is going to be really problematic because that could potentially be a condition that lasts forever.
Group gifts that include unborn people
You’re going to have a rule against perpetuity problem because it’s neither going to fail, nor vest within one life.
A parent of a grantee that is still alive causes a problem. Again, this is the fertile octogenarian and the unborn widow problem that you can have a child as long as you are living
Rule Against Perpetuities:
The Create, Kill, Count Test
Count 21 years from the death of all the measuring lives at the time of the
conveyance, and see if the interest will vest or fail within that time.
If yes, Then we are good
If no, can Vest or fail OUTSIDE that time period, VOID
If it fails completely or vests completely then completely, then it does not violate rules perpetuity. And you don’t need create kill count.
Types of concurrent tenancies (see your textbook)
- Joint Tenancy (suvivorship)
- Tenancy in common
- tenancy by the entirity (married)
Joint tenancy- ahs suvivorship
Joint tenancy-
Requires the requires 4 unities (time, title, interest in possession)
Right of survivorship: the surviving tenant becomes the sole owner when the co- tenant dies
nothing divisible or inheritable in a joint tenancy because all of the interest goes to the joint tenant through survivorship. When the tenant dies. If you have multiple joint tenants, then the multiple surviving tenants share the deceased tenants interest.
Joint Tenancy
How is a joint tenancy conveyed?
O conveys ¾ of Greenacre to A, B, and C as joint tenants with right of survivorship.
So how is a joint tenancy conveyed O conveys three quarters of green ACRE TO A, B and C.
So let’s call that small green acre. So now, A, B, and C own small green acre in equal shares. They each own a third of small green acre as joint tenants. With the right of survivorship.
The next day, O changes their mind and wants to convey the last quarter of green ACRE TO D as joint tenants with A, B and C.
You can’t do that. It is breaching the unity of time. It’s you breaching the unity of deed.
What does D have? D has a tenancy in common with A, B and C.
holds one quarter interest in green acre as a tenant in common.
the same happend is A conveys their share. the new tenant call them F is joint tenant in commom with B can C. B and C still have Joint Tenancy, if F dies their portion goes to their heirs.
What are the “unities”? (for joint tenancy you must have all four unities
- Time – must be acquired at the same time
- Title- It must be acquired on the same deed,
- Interest: for a joint tenancy the interests must be equal
- Possession - here is an equal white to use and enjoy the whole property of all the joint tenants. This is true of joint tenancy tenancy in common and tenancy by the entirety.
Tenancy in common
Requires only default under the law
only requires the unity of possession, which simply means the equal right to possession enjoyment of the land.
Alienable ; can be devised by will , mortgages , and transferred by dead, without the consent of co-tenants
Tenancy in common what it looks like
How do you convey a tenancy in common to two (or more) people?
“O conveys to A and B as Tenants in Common”
O owns a vacation property, Greenacre. Suppose O conveys 25% interest in Greenacre to A, 25% interest in Greenacre to B, and 50% interest in Greenacre to C.
- How much of the parcel may A use when she visits Greenacre? A can use all, you have 100% right to use and enjoy estate
- A, B, and C decide that owning Greenacre is too much work. They put Greenacre on the market, and sell each for $1 million dollars. How are the proceeds of the sale distributed amongst A, B, and C?
- when they sell they get according to their fractional share. So a own 25% gets 250,000 be on 25% gets $250,000. And lastly, see gets half a million dollars because they own half
YOU MUST CHOOSE your tenancy!
When you PURCHASE something, you get to choose your tenancy.
When a property is _devised or conveyed, the GRANTO_R chooses the tenancy for the grantees.
married three times what type of estate do you want
what you will see in second marriages and third marriages, especially, is that the married couple chooses to take by tenancy in common. The reason is if the surviving spouse doesn’t want their partner share because their partner wants to give it to their children. The only way they can hold is to hold in tenancy in common.
