Future Interests Flashcards
Possibility of Reverter
Correlative Present Interest:
- Fee Simple Determinable
Rights of Grantor:
- Estate automaticall reverts to grantor upon concurrence of stated event.
Alienability:
- Transferable, descendible, devisible.
Example:
- To A so long as alcohol is not used on the premises.
Right of Entry
Correlative Present Interest:
- Fee Simple Subject to Condition Subsequent
Rights of Grantor:
- Estate does not revert automatically; grantor must exercise his right of entry.
Alienability:
- Descendible and devisible, but some courts hold nnot transferable inter vivos.
Example:
- “To A on condition that if alcohol is used on premises, O shall have the right to reenter and retake premises.”
Reversion
Defined: A reversion is the estate left in the grantor who conveys less than she owns (O -> “A to life”).
Alienability: Alienable, devisable, and inheritable.
NOTE: All reversion interests are vested and therefore not subject to the RAP.
Remainders
Defined:
- A reaminder is 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 a preceding estate.
- Must be expressly created in the instrument.
Types of Remainders:
- Indefeasibly vested remainder
- Vested remainder subject to open
- Vested remainder subject to total divestment
- Contigent Remainder
Executory Interests
Defined:
- Executory interests are future intrest in third parties that either divest a transferee’s preceding freehold estate (“shifting”), or follow a gap in possession or cut short grantor’s estate (“springing”).
Note: Executory interests are not considered vested, and therefore RAP applies.
Indefeasibly Vested Remainder
Defined:
- A vested remainder created in an existing and ascertained person, and not subject to a condition precedent.
- Indefeasibly vested remainder is a vested remainder that is not subject to divestment or diminution.
- RAP does not apply.
Vested Remainder Subject to Open
Defined:
- A vested remainder created in a class of persons (e.g. children) that is certain to become possessory, but is subject to diminution (e.g. birth of additional child, who will share in the reaminder of the class).
- RAP applies if class remains open.
Example: “To A for life, then children of B.” A and B are living and B has on child, C. C has a vested remainder subject to open.
Vested Remainder Subject to Total Divestment
Defined:
- A vested remainder that is subect to a condtion subsequent.
- RAP does not apply.
Example:
- 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 divestment by C’s executory interest.
Contingent Remainder
Defined: Contingent remainders are those created in:
- Unborn or unascertained persons; OR
- Subject to a condition precedent.
- RAP applies.
Contingent Remainder Subject to Condition Precedent
Defined: A condition is precedent if it must be satisfied before the remainderman has a right to possession.
Examples:
- O conveys “to A for life, then to B and his heirs if B marries C.” B’s remainder is contigent because he must marry C before he can take possession.
- O conveys, “to A for life, then to B and his heirs if B marris C, otherwise to D and his heirs.” B and D have alternative contigent remainders.
Contingent Remainder (Unborn or Unascertained)
Defined:
- A remainder created for unborn or unascertained persons is contigent because until the reaminderman is ascertained, no one is ready to take possession if the preceding state ends.
Example:
- “To A for life, then to the children of B.”
- If B is childless at the time, the remainder is contigent.
Rule in Shelley’s Case
Rule: A remainder in a life tenant-grantee’s heirs is deemed to be in the life tenant herself.
Example: “To A for life, remainder to A’s heirs.”
- A has a fee simple.
Modern Status: Abolished in most jurisdictions.
Modern Result: A’s heirs have a contigent remainder.
Doctrine of Worthier Title
Rule: A reaminder in the grantor’s heirs is ineffective, so grantor has a reversion.
Example: “To A for life, then to my heir’s at law.”
- A has a life estate; grantor has a reversion.
Modern Status: DOWT treated as rule of construction only (i.e. it doesn’t apply if an intent to create a reaminder in heirs has been clearly manifested). Applies only to inter vivos transfers, not wills, and only if the words “heirs” is used.
Modern Result: Grantor’s heirs have a contigent remainder.
Destructibility of Contigent Remainders
Rule: Contigent remainders are destroyed if not vested at at time of termination of preceeding estate.
Example: “To A for life, remainder to A’s children who reach 21.”
- If A has no choldren who are at least 21 at time of her death, property reverts to grantor.
Modern Status: Abolished in most jurisdictions.
Modern Result: Property reverts to grantor; A’s children have a springing executory interest.
Rule of Convenience
Rule: In the absence of express contrary intent, a class closes when some member of that class can call for distribution of her share of the class gift.
EXCEPTION: Person in gestation at the time the class closes are included in the class.
