Future Interests Flashcards
Future Interest: A present, legally protected right in property; it is not an expectancy.
O conveys land “to A for life, and on A’s death to B in fee simple.” A has a present possessory
life estate. B has a future interest. (B’s future interest is an indefeasibly vested remainder.) Upon
the termination of A’s possessory life estate, B’s remainder in fee simple will become a present
possessory estate in fee simple.
Future Interest: A present, legally protected right in property; it is not an expectancy.
2) O conveys land “to A for life, and on A’s death to B in fee simple if B survives A.” A has a
present possessory life estate. B has a future interest. (It is a contingent remainder.) Upon the termination of A’s life estate, B’s remainder in fee simple may become a present possessory estate
in fee simple. B must survive A in order to take. (In this example, O also has a future interest.
He has not conveyed away the interest represented by the contingency that B may predecease A.
If B does predecease A, on the termination of A’s life estate title to the land will revert to O. O’s
retained future interest is called a reversion.)
Future Interest: A present, legally protected right in property; it is not an expectancy.
3) After the conveyance “to A for life, and on A’s death to B,” B can transfer his remainder interest to another person. Alternatively, if B dies during A’s lifetime, his vested remainder will pass
to the devisees under his will or (if B left no will) to his intestate heirs.
Reversions
A person owning an estate in real property can create and transfer a lesser estate (in the
durational sense). The residue left in the grantor, which arises by operation of law, is a
reversion.
Remainders
A future interest created in a transferee that is capable of taking in present
possession and enjoyment (i.e., capable of becoming a present interest) upon the natural
termination of the preceding estates created in the same disposition. Unlike a reversion,
which arises by operation of law from the fact that the transferor has not made a complete
disposition of his interest, a remainder must be expressly created in the instrument creating
the intermediate possessory estate. At common law, the only preceding estates that could
support a remainder were life estates and fee tails. Because nearly all American jurisdictions
have abolished the fee tail estate, a safe rule of thumb is that remainders always follow life
estates. (Note: According to the Restatement of Property, under modern law, a remainder
can also follow a term of years. However, there is very little case law on the point, and it is so
rare that it is extremely unlikely to be tested.)
Remainders
“To A for life, and on A’s death to B and his heirs.” A has a present possessory life estate.
B has a remainder in fee simple. It is a remainder because upon the expiration of A’s life
estate (natural termination of the preceding estate), B will be entitled to present possession
and enjoyment of the property. The term “remainder” derives from the consequence that
when A’s life estate comes to an end, title “remains away” from the transferor instead of
reverting back to him.
Remainders
On Monday, O conveys Blackacre “to A for life.” On Wednesday, O conveys “all of my
right, title, and interest in Blackacre” to B. B holds a reversion, not a remainder. B’s future
interest was not created in the same disposition that gave A a life estate. The Monday conveyance gave A a life estate and raised a reversion in O. The Wednesday conveyance transferred O’s reversion to B. “Once a reversion, always a reversion.”
Remainders
_________ cannot “cut short” or divest a preceding estate prior to its normal expiration. Therefore, a remainder can never follow a fee simple, which has a potentially infinite duration. Future interests that cut short a preceding estate or follow a gap after it are called executory interests
Indefeasibly Vested Remainder
a remainder that:
(i) Can be created in and held only by an ascertained person or persons in being;
(ii) Must be certain to become possessory on termination of the prior estates (i.e.,
there is no condition that may operate to prevent the remainder from someday
becoming a present interest);
(iii) Must not be subject to being defeated or divested (compare the vested remainder
subject to total divestment, c., infra); and
(iv) Must not be subject to being diminished in size (compare the vested remainder
subject to open,
Indefeasibly Vested Remainder
“To A for life, and on A’s death to B.” A has a life estate; B has an indefeasibly vested
remainder which is certain to take in possession on the termination of A’s life estate.
What if B dies in A’s lifetime? There is no stated condition that B survive A in order to
take, and the courts do not imply such a condition. B’s indefeasibly vested remainder
passes by will or intestacy to his successors, who own an indefeasibly vested remainder.
Indefeasibly Vested Remainder
“To A for life, then to A’s first-born son in fee.” At the time of this disposition, A has
no children. The state of title: life estate in A, contingent remainder in the first son to be
born to A, reversion in fee simple in the transferor. (The reversion will take in present
possession if A never has a son.) The remainder is not vested because it is not created in
an ascertained person in being. Also, it is subject to the condition that A have a child.
Two years later A has a son, John. The state of title: life estate in A, indefeasibly vested
remainder in fee simple in John.
Vested Remainder Subject to Open
This is a vested remainder created in a class of persons (e.g., “children,” “brothers and
sisters”) that is certain to take on the termination of the preceding estates, but is subject
to diminution by reason of other persons becoming entitled to share in the remainder. It
is also called a “vested remainder subject to partial divestment.”
Reversions
O, owning land in fee simple, conveys it (i) “to A for life,” or (ii) “to A for 99 years.”
In each case, O has a reversion in fee simple. She (or her successors) will be entitled to
present possession of the land when the granted estate terminates.
Reversions
O, owning a life estate in land, leases it “to A for 20 years.” O has a reversion in a
life estate. If O is still alive when A’s lease expires, title will revert to O for life. What
happens if, 10 years after this transfer, O dies? A’s lease will come to an end, for he
was given a lease by one holding only a life estate. O cannot convey a greater interest
than she has.
Reversions
O, owning land in fee simple, conveys it “to A for life, and on A’s death to B if B
survives A.” A has a life estate, B has a contingent remainder, and O has a reversion
that will take in present possession at A’s death if B predeceases A.
Reversions are transferable, devisable by will, and descendible by inheritance. The
holder of a reversion may sue a possessory owner for waste and may recover against
third-party wrongdoers for damages to the property (to the extent of the injury to the
reversion).
outstanding interests
O conveys “to A for life, remainder to B’s children.” C wants to buy the land, and
desires to know if he can get good title if he purchases from A and all of B’s living
children. The answer is no, as long as B is alive, because it is possible for B to
have more children (no matter what B’s age). Thus, there would be outstanding
interests in the unborn children of B, and C would not get good title.
Vested Remainder Subject to Open
“To A for life, and on A’s death to her children in equal shares.” If at the time of this
disposition A has no children, the state of title is: life estate in A; contingent remainder
in the unborn children of A; reversion in fee in the transferor, which will take in possession if A never has any children.
Suppose two years later a child, Bob, is born to A. The state of title is: life estate in A,
vested remainder subject to open in Bob. Bob’s remainder is vested because he is in existence and ascertained and his taking is not subject to any contingency. But it is vested
subject to open because A may have more children.
Two years later another child, Ray, is born to A. Bob’s remainder has been partially
divested in favor of Ray, who also meets the description “children of A.” Bob and Ray
now hold the vested remainder as tenants in common (each with an undivided one-half
share) subject to open—i.e., their vested remainders will be partially divested if more
children are born to A.
Two years later Bob dies; shortly thereafter, A dies. Bob’s successors (by will or intestacy) and Ray are entitled to present possession and enjoyment of the property. Bob’s
share of the remainder was subject to partial divestment, but it was not subject to being
totally defeated. No condition of survival was attached to Bob’s interest. Bob (or his
successors) was certain to take; the only question was the size of his share.
Vested Remainder Subject to Open
Gift by will “to my wife, Rowena, for life, and on her death to my children in equal
shares.” T is survived by Rowena and by three children. At first blush this looks like
a vested remainder subject to open because it is a remainder to someone’s children.
In reality, though, it is indefeasibly vested. T, being dead, can have no more children.
(Slight qualification of answer: If Rowena is pregnant with T’s child at T’s death, the
posthumous child, if born alive, will share in the gift.)
Vested Remainder Subject to Total Divestment
Arises when the remainderman is in existence and ascertained and his interest is not subject to any condition precedent, but his right to possession and enjoyment is subject to being defeated by the happening of some condition subsequent.
Vested Remainder Subject to Total Divestment
“To A for life, remainder to B and his heirs, but if at B’s death he is not survived
by issue, to C and his heirs.” Here, B has a vested remainder in fee simple, but his fee
simple interest is subject to being divested if at his death he is not survived by issue. (C
has a shifting executory interest.)
Vested Remainder Subject to Total Divestment
“To A for life, then to B for life.” A has a life estate. B has a vested remainder in a life estate subject to total divestment. The transferor has a reversion in fee. B’s remainder is vested even though (as a practical matter) he must survive A in order to take. But this practical requirement does not make B’s remainder contingent. The only condition to B’s taking is the natural termination of A’s life estate, and this “condition” is inherent in any remainder life estate. There is no other condition precedent. However, B’s remainder life estate is not indefeasibly vested, for it will be defeated if he dies in A’s lifetime. Therefore, it is a vested remainder subject to total divestment.
Vested Remainder Subject to Total Divestment
“To A for life, and on A’s death to B; but if B predeceases A, on A’s death to C.” A
has a life estate. B has a vested remainder subject to total divestment. Although B’s
taking is contingent on his surviving A, that contingency is expressed as a condition
subsequent—meaning that B’s remainder is vested subject to total divestment. (C has a
shifting executory interest.)
