Future Interests in Freehold Estates Flashcards
What is a future interest?
It is a presently owned interest in land where the right to possession is delayed until some point in the future, if at all.
How many future interests are there and how are they divided?
There are 6 future interests divided into two classes: * Future interests retained by the grantors (transferors) * Future interests created in grantees (transferees)
What is a reversion?
Arises in a grantor whenever the grantor transfers to another a lesser estate than the grantor has, and does not at the same time transfer the balance of the estate to a third party.
What are the characteristics of a reversion?
- Vested * Alienable (transferrable) * Devisable * Inheritable
What is an example of a reversion?
Owen to Ned for life, then after Ned’s funeral, to Ted and her heirs.
What is a possibility of reverter?
Arises in a grantor when she creates a FSD estate of the same quality as her own, and does not give the balance (the future interest) to a third party in the same conveyance.
What is the right of entry?
Arises in a grantor when the grantor creates an estate subject to condition subsequent where the grant does not, in the same conveyance, give the future interest to a third party.
Compare Reversion and Possibility of Reverter.
- Both are vested interests * Neither could be transferred on an inter vivos (life) basis under common law * Modern view allows free transferability of both in most states
Under common law, when does the statute of limitation begin to run for Adverse Possession in Fee Simple Subject to Condition Subsequent?
The SOL does not run until the grantor exercises his/her right within a reasonable time of the breach.
Under common law, when does the statute of limitation begin to run for Adverse Possession in Fee Simple Determinable?
The SOL begins to run immediately against the grantor, because the grantor has title to the property.
What is the waste doctrine on future interests?
Imposes a duty on the owner of a present possessory interest to use the property in a manner that does not substantially injure the rights of the future interest holders.
What are the three types of remainders?
- Vested Remainder * Contingent Remainder * Vested Remainder Subject to Open or Divestment
What is the rule for a remainder in future interest?
It must be capable of becoming possessory immediately upon the expiration of the prior estate and does not divest any interest in a prior grantee.
What is the difference between a vested remainder and a contingent remainder?
- A vested remainder becomes possessory whenever and however the preceding estate terminates. * A contingent remainder cannot become possessory until the conditions are satisfied.
What characterizes a contingent remainder?
A remainder is contingent if its owner is not ready and able to take possession whenever and however the preceding estate terminates.
What happens to a contingent remainder if the conditions are not met?
It cannot become possessory.
What is an example of an alternate contingent remainder?
O to A for life, then if A uses the land as a farm, to B and her heirs, but if A fails to use the land as a farm, then to C and her heirs.
What is a vested remainder subject to open?
Created in a class of future interest holders whose members may increase in number before the future interest comes into present possession.
What is a vested remainder subject to divestment?
Created where the remainder is vested but is subject to a condition precedent in a clause subsequent to the clause granting the vested remainder interest.
What is an executory interest?
A future interest in a grantee (transferee) that, in order to become possessory, must divest interest held by another grantee or divest interest held by grantor.
What distinguishes a shifting executory interest?
It divests interest held by another grantee.
What is a springing executory interest?
Arises where a grantor retains an interest in the property for some period following the preceding estate, but gives a future interest to a third party.
What is the modern approach rule regarding springing executory interests?
You must look at the grantor’s intent.
What are the characteristics of a springing executory interest?
- Not subject to the Doctrine of Destructibility * Subject to Rule Against Perpetuity * Freely transferable, alienable, devisable, and descendible
