Future Interests

Question 1

Future Interests Capable of Creation in the Grantor

Answer 1

Possibility of Reverter: accompanies Fee Simple Determinable

Right of Entry/Power of Termination: accompanies Fee Simple Subject to Condition Subsequent

Reversion: grantor who transfers an estate of less quantum than she started with – other than Fee Simple Determinable or fee Simple Subject to Condition Precedent

Question 2

Future Interests in the Transferees

Answer 2

1. Vested Remainder: - Indefeasibly Vested Remainder - Vested Remainder Subject to Complete Defeasance/Vested Remainder Subject to Total Divestment -Vested Remainder Subject to Open 2. Contingent Remainder 3. Executory Interest - Shifting Executory Interest - Springing Executory Interest

Question 3

Remainder

Answer 3

New York: Any future interest in a transferee that is subject to a condition precedent is called a remainder subject to a condition precedent

Always accompany preceding estate of: known, fixed duration.

NEVER follows defeasible fee

Question 4

Vested Remainder

Answer 4

created in an ascertained person AND is not subject to any condition precedent

Three kinds:

Indefeasibly Vestid Remainder

Vested Remainder Subject to Open

Vested Remainder Subject to Total Divestment

Question 5

“To A for life, then if B graduates from college, to B.” A is alive, B is in high school. OR “To A for life, if B has reached the age of 21, to B.”

Answer 5

B: Contingent Remainder

O: Reversion – if B never graduate’s or if B never reaches 21, O or his heirs take

If B graduates from college during A’s life time, B’s Contingent Remainder is transformed automatically into an Indefeasibly Vested Remainder.

Question 6

Indefeasibly Vested Remainder:

Answer 6

Holder is certain to acquire an estate in the future, with no strings attached

Question 7

“To A for life, remainder to B.” A is alive, B is alive

Answer 7

A has a Life Estate B has an indefeasibly vested remainder (because he is known and no strings are attached) If B predeceases A, at common law, B’s future interest passes by will or intestacy

Question 8

Vested Remainder Subject to Complete Defeasance aka Vested Remainder Subject to Total Divestment

Answer 8

New York: “Remainder Vested Subject to Complete Defeasance”

Remainderman exists, his taking could be cut short by condition subsequent if conditional language appears before the language creating the remainder, the condition is a condition precedent, and you have a Contingent Remainder

Question 9

To A for life, remainder to B, provided however that if B dies under the age of 25, to C.” A is alive, B is 20.

Answer 9

A has a Life Estate

B has a Vested Remainder Subject to Complete Defeasance

C has a Shifting Executory Interest If B is under 25 when A dies, B still takes. However, B must live to 25 for his estate to retain his interest, otherwise B’s heirs lose it to C or her heirs.

O has a Reversion, in the case that neither C nor C’s heirs exist when the condition is breached

Question 10

“To A for life, and if B has reached the age of 25, to B.” A is alive, B is 20.

Answer 10

A has a Life Estate B has a Contingent Remainder

O has a Reversion If B is still alive but under 25 when A dies, B cannot take.

Instead the estate reverts back to O or O’s heirs, who hold it subject to B’s Springing Executory Interest – if and when B reaches 25, B divests O

Question 11

Vested Remainder Subject to Open

Answer 11

Remainder is vested in a group of takers, at least one of whom is qualified to vote

Each class member’s share is subject to partial diminution because conditional takers can still join

Question 12

“To A for life, then to B’s children.” A is alive, B has 2 children (C, D).

Answer 12

C and D have Vested Remainders Subject to Open

Class closes at B’s death, and according to the Rule of Convenience, at A’s death. Because C and D can demand possession

Once A dies, a child of B born or conceived after will not share in the gift

Exception: womb rule – a child of B in the womb at A’s death will share with C and D.

Question 13

Closed Class

Answer 13

if no others can join Rule of Convenience: The class closes whenever any member can demand possession

Question 14

Contingent Remainders

Answer 14

created in an unascertained person AND/OR is subject to a condition precedent

Remember:

1. Destructibility of Contingent Remainders
2. Rule in Shelley’s case
3. Doctrine of Worthier Title

Question 15

Destructibility of Contingent Remainders

Answer 15

contingent remainder was destroyed if it was still contingent at the time the preceding state ended

“To A for life, and if B has reached the age of 21, to B.” A has died, leaving behind B who is 19.

Historically: B’s Contingent Remainder was destroyed and O or O’s heirs would take in Fee Simple Absolute

Most states have abolished (including NY): so, if B is still under 21 when A dies, O or O’s heirs holds the estate subject to B’s Springing Executory Interest. Once B reaches 21, B takes.

Question 16

The Rule in Shelley’s Case

Answer 16

common law: 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

Abolished in most states (including NY)

Example: “To A for life, then, on A’s death, to A’s heirs.”

Historically: the present and future interests would merge, giving A a Fee Simple Absolute

Today: A has a Life Estate; A’s as yet unknown heirs have a Contingent Remainder; O has a Reversion, since A could die without heirs.

Example: To A for life, then to B ofr life, then to the heirs of B

historically: remainder in A’s heirs is transformed to a remainder in A. there is no merger becausethe remainder in B in life is Vested.

Rule of Law - so would apply in face of grantor’s intent (unlike the Doctrine of worthier title which is a rule of construction)

Question 17

Doctrine of Worthier Title / rule against a remainder in the grantor’s heirs

Answer 17

Viable in most states today – when O, who is alive, tries to create a future interests in his heirs

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

• Contingent Remainder in O’s heirs is void. A has a life estate and O has a Reversion
• If it did not apply → A would have a Life Estate and O would have a Contingent Remainder (because O is alive and has no heirs)

A rule of Construction – so grantor’s intent controls. If grantor clearly intends to create a contingent remainder in his heirs, that intent is not binding.

• “O hereby clearly states that the Doctrine of Worthier Title does not apply” or “O hereby decrees that O intends to retain no reversionary interest whatsoever”

New York: Abolished, with respect to transfer taking effect after September 1, 1967

Question 18

Executory Interests

Answer 18

future interest created in a transferee which is not a remainder and which takes effect by either cutting short some interest in

Shifting (another person)

Sprining (grantor or grantor’s heirs)

Question 19

To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs. (B’s power to force A to forfeit)

Answer 19

B as a Shifting Executory Interest. B doesn’t have a Remainder because they never follow Defeasible Fees

A has a Fee Simple Subject to B’s Shifting Executory Interest

Does not violate RAP because 1 year limit

Question 20

“To A, but if A uses the land for nonresidential purposes at any time during the next 20 years, then to B.”

(B benefits from A’s premature forfeiture)

Answer 20

B has a Shifting Executory Interest
A has a Fee Simple Subject to B’s Shifting Executory Interest
Does not violate RAP because of 20 year limit

Question 21

Executory Interests and Contingent Remainders in NY

Answer 21

abolished the difference between Executory Interests and Contingent Remainders

All: Remainders Subject to Condition Precedent.

Question 22

“To A, if and when he marries.” A is unmarried

Answer 22

A as a Springing Executory Interest
O has a Fee Simple Subject to A’s Springing Executory Interest
Does not violate RAP because we will know by the end of A’s life whether

Question 23

“To A, if and when he becomes a lawyer.” A is in high school

Answer 23

A has Springing Executory Interest
O has Fee Simple Subject to A’s Springing Executory Interest
Does not violate RAP because we will know by the end of A’s life if the condition is met or not

Question 24

to a for life, then to b

Answer 24

indefeasibly vested remainder

Question 25

to a for life, and on A’s death bed to B, but if B predeceases A, then to C

Answer 25

B has a vested remainder subject to total divestment

Question 26

To a for life, then to A’s children in equal shares

Answer 26

Vested remainder subject to open

Question 27

To a for life, then to B if B marries C

Answer 27

Contingent Remainder

Question 28

To A for life, then to A’s surviving Children

Answer 28

Contingent Remainder

Question 29

To A for life, remainder to B and her heirs. but if B predeceases A, then to C and his heirs

Answer 29

C has a shifting executory Interest

Question 30

To A when and if he becomes a doctor

Answer 30

spriging executory interest

Question 31

To a for life, then two years after A’s death, to B

Answer 31

Springing executory Interest