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Property > Future Interests > Flashcards

Future Interests Flashcards

0
Q

What future interests can be created in transferees?

A

Vested remainder
Contingent remainder
Executory interest

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1
Q

What future interests are capable of creation in a grantor?

A

Reversion
Possibility of Reverter
Right of Entry/Power of Termination

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2
Q

What is a remainder?

A

A future interest created in a grantee that could become a possessory interest when the prior possessory interest ends.

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3
Q

What does it mean to say a remainderman is sociable?

A

If there is a remainder, it always accompanies a possessory interest of a known, fixed duration (often a life estate).

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4
Q

What does it mean to say a remainderman is patient and polite?

A

A remainder never follows a defeasible fee - so it cannot cut short or divest the interest from a prior transferee.

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5
Q

What type of interest accompanies a defeasible fee?

A

an executory interest

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6
Q

What are the requirements for a remainder to be vested?

A

(1) created in an ascertained, known person (i.e. someone alive or the heir exists)
(2) is not subject to any condition precedent

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7
Q

What are the two characteristics that can make a remainder contingent?

A

Either it is created in an unascertained person (unborn or heir apparent) or is subject to a condition precedent, or both.

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8
Q

What is a future interest in a transferee subject to a condition precedent called in New York?

A

A Remainder Subject to a Condition Precedent.

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9
Q

What is a condition precedent?

A

a prerequisite.

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

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10
Q

What happens in the case of a contingent remainder when the remainderman satisfies the condition?

A

The remainder becomes an indefeasibly vested remainder

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11
Q

When the remainder is a conditional one, what future interests are there?

A

O has a reversion until the condition is met, when the remainderman attains an indefeasible vested remainder.

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12
Q

What is the rule of destructibility of contingent remainders?

A

If the preceding estate ends BEFORE THE CONDITION for the remainderman is met, the remainder is destroyed.

BUT THIS HAS BEEN ABOLISHED.

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13
Q

What happens today when a preceding estate ends before the condition on a remainderman is met?

A

The property reverts to O, and B has a springing executory interest.

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14
Q

What is a springing executory interest?

A

To A for life, then to B if B graduates from law school.
A dies before B graduates.
The property reverts to O or O’s heirs, and B has a springing executory interest: the property automatically transfers to B when he graduates from law school (i.e. satisfies the condition)

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15
Q

Facts: “To A for life, then to B if he marries.”
A dies before B is married.

What does B have?

A

A springing executory interest.

The property reverts to O or O’s heirs, and if B ever marries, the property will automatically transfer to him.

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16
Q

What is the Rule in Shelly’s Case?

A

“To A for life, on A’s death, to A’s heirs.” A is alive. The present and future interests MERGE and A has a fee simple absolute.

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17
Q

What is the status of the Rule in Shelly’s Case today?

A

Abolished.

18
Q

What is the doctrine of worthier title?

A

“O to A for life, then to O’s heirs.”
The contingent remainder in O’s heirs is void.
A gets a life estate, and O has a reversion.

19
Q

What happens if the Doctrine of Worthier Title is waived?

A

O’s attempt to create a contingent remainder in his heirs is enforceable. It can be waived by clear statement.

20
Q

“To A for life, remainder to B” A is alive and B is alive. What does B have?

A

An indefeasibly vested remainder.

21
Q

What does it mean to have an indefeasibly vested remainder?

A

the holder will certainly acquire the estate in the future, with no strings attached.

22
Q

What does New York call a vested remainder subject to complete defeasance?

A

a remainder vested subject to complete defeasance

23
Q

What does it mean to have a vested remainder subject to complete defeasance/subject to total divestment?

A

The remainderman’s right to the estate could be cut off or cut short by a condition subsequent.

24
Q

“to A for life, remainder to B, provided that if B dies before age 25, to C” What does B have? What does C have? O?

A

B: vested remainder subject to complete defeasance
C: shifting executory interest
O: reversion

25
Q

What is the comma rule?

A

If conditional language comes after a phrases that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent and you have a vested remainder subject to complete defeasance.

26
Q

What does it mean to have a vested remainder subject to open?

A

The remainder is vested in a group of takers, at least one of whom is qualified to take. Each member’s share is subject to partial diminution by new members - until the group is closed.

27
Q

“To A for life, then to B’s children.” A is alive. B has two kids, C & D.
What do C & D have?

A

C & D have a vested remainder subject to open.

28
Q

“To A for life, then to B’s children.” A is alive. B has two children, C & D. After A dies, B has another child, E.
Who takes?

A

C & D but not E. The group CLOSED when A died.

29
Q

“to A and her heirs, but if B’s team wins the World Series, to B and his heirs.” What interests do A, B, and O have?

A

A has a fee simple subject to B’s shifting executory interest.
B has a shifting executory interest.
O has nothing.

30
Q

“To A if and when A opens a restaurant.” A has not opened a restaurant. What interests do A and O have?

A

A has a springing executory interest.

O has a fee simple subject to A’s springing executory interest.

31
Q

What does NY call executory interests and contingent remainders?

A

remainder subject to condition precedent

32
Q

What is the Rule Against Perpetuities?

A

Future interests are void if there’s any chance, however remote, that the interest could vest more than 21 years after the death of a measuring life.

33
Q

What are the only kinds of interests the RAP applies to?

A

Contingent remainders
Executory interests
Some vested remainders subject to open

34
Q

What are the future interests the RAP does NOT apply to?

A

Any future interest in the grantor
Indefeasibly vested remainders
Vested remainders subject to complete defeasance

35
Q

How has NY modified the Fertile Octogenarian Rule?

A

Any woman who is age 55+ cannot have children (disregards possibility of adoption).

36
Q

Does a gift to an open class conditioned on members surviving to an age older than 21 ever violate the RAP?

A

Yes, always. Bad to one, bad to all.

This would be void as to all members of the group.

37
Q

What if you have an executory interest without a limit on the time within which it must vest?

A

It’s void because it violates the RAP.

38
Q

“To A and his heirs, but if the land ceases to be used for farming, to B and his heirs.” What happens?

A

A has a fee simple absolute. This violates the RAP as to B. But, when you delete the future interest, what’s left is not grammatically correct.

39
Q

“O to Red Cross so long as used for Red Cross purposes, and if they cease to be so used, to the YMCA.” What result?

A

This would violate the RAP, except the CHARITY-TO-CHARITY exception to the RAP applies.

40
Q

What is the wait-and-see (aka Second Look) doctrine?

A

RAP reform in majority of states.
Any suspect future interest is determined on the basis of the facts as they now exist.

NY has rejected this!

41
Q

What is the Uniform Statutory Rule Against Perpetuities (USRAP)?

A

codifies common law RAP and adds an alternative 90 year vesting period.

42
Q

What is the cy pres doctrine?

A

“as near as possible” - the court will presume the grantor intended to grant a valid interest, and read the suspect interest as close to that intent as possible, while complying with the RAP.

NY has rejected this doctrine!

43
Q

What is New York’s “suspension rule”?

A

Where restriction on the power to sell or transfer property is for a period longer than 21 years, it will be void.

Property (12 decks)

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