Future Interests Flashcards
Future Interests Capable of Creation in the Grantor
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
Future Interests in the Transferees
- 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
Remainder
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
Vested Remainder
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
“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.”
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.
Indefeasibly Vested Remainder:
Holder is certain to acquire an estate in the future, with no strings attached
“To A for life, remainder to B.” A is alive, B is alive
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
Vested Remainder Subject to Complete Defeasance aka Vested Remainder Subject to Total Divestment
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
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.
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
“To A for life, and if B has reached the age of 25, to B.” A is alive, B is 20.
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
Vested Remainder Subject to Open
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
“To A for life, then to B’s children.” A is alive, B has 2 children (C, D).
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.
Closed Class
if no others can join Rule of Convenience: The class closes whenever any member can demand possession
Contingent Remainders
created in an unascertained person AND/OR is subject to a condition precedent
Remember:
- Destructibility of Contingent Remainders
- Rule in Shelley’s case
- Doctrine of Worthier Title
Destructibility of Contingent Remainders
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.
The Rule in Shelley’s Case
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)
Doctrine of Worthier Title / rule against a remainder in the grantor’s heirs
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
Executory Interests
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)
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)
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
“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)
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
Executory Interests and Contingent Remainders in NY
abolished the difference between Executory Interests and Contingent Remainders
All: Remainders Subject to Condition Precedent.
“To A, if and when he marries.” A is unmarried
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
“To A, if and when he becomes a lawyer.” A is in high school
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
to a for life, then to b
indefeasibly vested remainder
to a for life, and on A’s death bed to B, but if B predeceases A, then to C
B has a vested remainder subject to total divestment
To a for life, then to A’s children in equal shares
Vested remainder subject to open
To a for life, then to B if B marries C
Contingent Remainder
To A for life, then to A’s surviving Children
Contingent Remainder
To A for life, remainder to B and her heirs. but if B predeceases A, then to C and his heirs
C has a shifting executory Interest
To A when and if he becomes a doctor
spriging executory interest
To a for life, then two years after A’s death, to B
Springing executory Interest
