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Real Property > Future Interests > Flashcards

Future Interests Flashcards

1
Q

The three future interests capable of creation in the grantor

A
  • Possibility of Reverter
  • Right of Entry (a.k.a Power of Termination)
  • Reversion
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2
Q

The life estate that accompanies possibility of reverter

A

Fee simple determinable

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3
Q

The life estate that accompanies right of entry

A

FS subject to condition subsequent

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4
Q

VA SoL clock starts to run when this happens

A

Starts to run when the condition happens with a fee simple on a condition subsequent, NOT when the right of entry is exercised.

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5
Q

When an estate has a future interest of reversion

A
  • Grantor transfers estate of lesser duration or magnitude than she started with
  • Estate is neither FS determinable or FS subject to a condition subsequent
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6
Q

The three types of future interests held by someone other than grantor

A
  1. Vested remainder
  2. Contingent remainder
  3. Executory interest
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7
Q

Remainder

A

A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.

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8
Q

Remainders are sociable

A

Remainders never travel alone. In other words, remain-ders always accompany a preceding estate of known fixed duration (such as a life estate or term of years)

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9
Q

Remainders are patient and polite

A

A remainder never cuts short or divests the prior taker. Instead, it patiently waits its turn and won’t take until the present life estate or term of years comes to its conclusion.

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10
Q

Contingent remainder

A

A remainder is this if:

  1. It is created in an unascertained or unknown person, or
  2. it is subject to an unmet condition precedent, or both.
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11
Q

Examples of a contingent remainder created in an unascertained or unknown person

A
  • “To A for life, then to B’s first child.” A is alive. B, as yet, has no children.
  • “To A for life, then to B’s heirs.” A is alive. B is alive. Because a living person has no heirs, while B is alive his heirs are unknown.
  • “To A for life, then to those children of B who survive A.” A is alive. We don’t yet know which, if any, of B’s children will survive A.
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12
Q

When a condition is a condition precedent

A

when it appears before the language creating the remainder or is woven into the grant to the remainderman.

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13
Q

Example of contingent remainder that is subject to an unmet condition precedent

A

“To A for life, then, if B graduates from college, to B.” A is alive. B is still in high school. Before B can take, he must graduate from college. He has not yet satisfied this condition precedent. B has a contingent remainder.

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14
Q

A remainder never follows this type of estate

A

defeasable fee. The holder of a remainder cannot cut short or divest a prior transferee.

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15
Q

When a remainder becomes possessory

A

On the natural expiration or conclusion of a prior possessory estate created by the same conveyance in which the remainder is created.

Typically, a remainder is the future interest that becomes possessory at the natural conclusion of a preceding life estate or term of years.

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16
Q

Vested remainder

A

The remainder is is both created in an ascertained person and not subject to a condition precedent.

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17
Q

Condition Precedent

A

Think of a this as a prerequisite to remainderman’s admission onto Blackacre. It is something that the holder of the remainder must do before being allowed to take.

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18
Q

The three rules that limit contingent remainders

A
  1. The Destructibility Rule
  2. The Rule in Shelley’s Case
  3. The Doctrine of Worthier Title
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19
Q

The Destructibility Rule

A

Provides that a contingent remainder would be destroyed if it was still contingent at the time the preceding estate ended.

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20
Q

Example of the destructibility rule

A
  • O conveys “To A for life, and if B has reached the age of 21, to B.”
  • A died, leaving behind B, who was 20 at the time.
  • B’s contingent remainder would be destroyed and O or O’s heirs would take in fee simple absolute.
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21
Q

The destructibility rule’s current use

A

Today, it’s been abolished.

  • Thus, if B is 20 when A dies, O or O’s heirs would hold the estate subject to B’s springing executory interest.
  • Once B reaches 21, B takes.
22
Q

VA law on destructibility of contingent remainders

A
  • This doctrine has been abolished in VA.
  • Thus, if a cotingent remainder is still contingent when the estate ends, it is not destroyed but continues as an executory interest until the contingency occurs.
23
Q

When The Rule in Shelley’s Case applies

A

Only when O conveys “To A for life, and then, to A’s heirs.” and A is alive.

24
Q

What the Rule in Shelley’s Case Does

A

Merges the present and future interests, giving A a fee simple absolute.

e.g. “To A for life, and then, to A’s heirs.” A is alive. This rule just makes this a fee simple absolute.

25
Q

Current status of the Rule in Shelley’s Case

A

It has been virtually abolished.

Nowadays, if O conveys“To A for life, then to A’s heirs,” A has a life estate and A’s as yet unknown heirs have a contingent remainder. O has a reversion, since A could die without heirs.

26
Q

VA Law on the Rule in Shelley’s Case

A
  • This rule has been abolished in VA.
  • Thus, in a conveyance from O to A for life with the remainder to A’s heirs:
    • A’s possible heirs have a contingent remainder
    • O has a reversion, since A could die without heirs.
27
Q

When the Doctrine of Worthier Title applies

A

It applies when O, who is alive, endeavors to create a future interest in his heirs.

28
Q

Effect of the Doctrine of Worthier Title

A

“To A for life, then to O’s heirs.”- If it did not apply, A would have a life estate and O’s as yet unknown heirs would have a contingent remainder.

With this doctrine, the contingent remainder in O’s heirs is void. Thus, A has a life estate and O has a reversion.

29
Q

When the Doctrine of Worthier Title does not apply to an otherwise applicable conveyance

A

When grantor clearly intends to create a contingent remainder in his heirs.

30
Q

How to convey and not apply the Doctrine of Worthier Title

A
  • “To A for life, then to O’s heirs,”
  • explicitly add: “The doctrine of worthier title is not to apply,”
  • A has a life estate and O’s as yet unknown heirs have a contingent remainder.
31
Q

Doctrine of Worthier Title in VA

A

This doctrine has been abolished in VA as a rule of law and as a rule of construction.

32
Q

Definition of vested remainder.

A

The absolute right to receive title when a presently existing interest in real property ends.

33
Q

The three kinds of vested remainders

A
  1. The indefeasibly vested remainder
  2. The vested remainder subject to complete defeasance (also known as the vested remainder subject to total divestment)
  3. The vested remainder subject to open
34
Q

Effect of the indefeasibly vested remainder.

A

The holder of this remainder is certain to acquire an estate in the future, with no conditions or strings attached.

Example: O conveys “To A for life, remainder to B.” A is alive and B is alive. A has a life estate and B has an indefeasibly vested remainder. B is known. There are no conditions attached to his taking.

35
Q

Effect of the vested remainder subject to complete defeasance, (aka vested remainder subject to total divestment.)

A
  • The holder of the remainder exists.
  • The remainder is not subject to any condition precedent, meaning that there are no prerequisites to remainderman’s admission onto Blackacre.
  • However, remainderman’s right to possession or time with the land could be cut short because of a condition subsequent.
36
Q

This creates a vested remainder subject to complete defeasance

A

Condition subsequent

37
Q

A condition is a condition subsequent when:

A
  • The conditional language follows language that would create a vested remainder taken alone and set off by commas or other punctuation.
  • Ex: O conveys “To A for life, remainder to B, but if B dies under the age of 25, to C.” A is alive and B is 20 years old.
38
Q

Definition of the vested remainder subject to open.

A
  • The remainder is vested in a group, category, or class of takers, at least one of whom is qualified to take possession. (if no one was qualified, it would be a contingent remainder)
  • Since at least one member of the given class is qualified to take the class is still open.
  • Each class member’s share is subject to partial diminution or partial decrease because additional unascertained takers can still qualify as class members.
39
Q

An example of a vested remainder subject to open.

A
  • O conveys “To A for life, then to B’s children.” A is alive and B has two children, C and D.
  • C and D have this type of remainder.
  • Their respective shares will be decreased if B has another child.
  • (Note that if instead you were told that B has no children, the as yet unborn children would have contingent remainders)
40
Q

Definition of open/closed classes

A

A class is either open or closed. A class is open if it is possible for others to enter. A class is closed when its maximum membership has been set, so that persons born thereafter are shut out.

41
Q

How to tell when a class is closed.

A
  • The class closes whenever any member can demand possession. (rule of convenience)
  • Example: “To A for life, then to B’s children.” The class closes when:
    1. B dies, or
    2. A dies, because B’s children can then take.
  • If B’s child predeceases A, the share goes to the child’s devisees or heirs.
  • Exception: the womb rule. It tells us that a child of B in the womb at A’s death will share with other heirs.
42
Q

Definition of executory interest

A
  • A future interest created in a transferee (a third party),
  • which is not a remainder because it takes effect by either:
    • cutting short a transferee’s interest (“shifting”) or
    • cutting short the grantor or his heirs’ interest (“springing”).
43
Q

The two types of executory interests

A
  1. The shifting executory interest
  2. The springing executory interest
44
Q

Definiton of the shifting executory interest

A

The shifting executory interest always follows a defeasible fee, and cuts short someone other than O, the grantor.

45
Q

Example of shifting executory interest

A
  • “To A and his heirs, but if B returns from Europe within the next year, then to B.”
  • B is in a position to interrupt, or cut short, A’s otherwise limitless time with the land.
  • B is not a remainder because the present estate is not “To A for life,” or “To A for a term of years,
  • If B doesn’t return from Europe, A and then her heirs would enjoy infinite time with the land. B will get to take only as a consequence of the disruption of A’s otherwise limitless entitlement.
  • B is the executioner—meaning, the holder of an executory interest.
46
Q

How to tell when an interest is a shifting executory interest

A

When it follows a defeasible fee and takes by interrupting the preceding estate holder’s otherwise limitless time with the land.

47
Q

The buffet analogy

A
  • The remainderman is the kind of person you want next to you in the buffet line. He waits his turn before taking the food.
  • The executioner is not the kind of person you want next to you in the buffet line. He can plot to keep you from taking the food at all, or stop you from getting a second helping.
48
Q

How the springing executory interest occurs

A

This takes effect by cutting short or divesting O, the grantor.

49
Q

Example of a springing executory interest

A
  • O conveys “To A, if and when he marries.”
  • A is unmarried.
  • If and when A marries, A cuts short O’s otherwise limitless time with the land.
  • Hence, O has a fee simple subject to A’s springing executory interest.
50
Q

Transferability of remainders and executory interests in VA

A

All future interests can be transferred inter vivos or by will, even rights of entry.

Real Property (17 decks)

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