Future Intrests Flashcards
Ex: G grants LE to A. G retains reversion, because he (or his heirs) will get the land after A dies.
Reversion - doesnt need to be express in the conveyence
Future Interests retained by GRANTORS
- ReversionReversion (PI = LE)- residual future interest left in grantor.
- Right of reentry (PI = FSSCS)- interest goes back to grantor if condition of the grant is breached AND he exercises the power .
- Possibility of reverter (PI = FSD) - arises in the grantor when he grants a determinable interest (FSD).
Transferibilty of reversion
A reversion is alienable, devisable, and descendible.
Right of reentry
Condition subsequent is when the remainder is created first, and then the condition is usually in the subsequent clause.
Ex: “to E on condition that the property is not used as a commercial establishment, and if the property is used as a commercial establishment, R has the right to reenter and take the property.”
Note: grant must contain an express power of termination.
Transferibily of right of reentry
Power of termination is descendible and devisable but NOT alienable.
When does reentry become possessory?
Property is not automatically forfeited upon breach of the condition. Original grantor must exercise power of termination.
Possibility of reverter (PI = FSD) -
arises in the grantor when he grants a determinable interest (FSD).
When does reverter become possessory?
Grant does not have to explicitly create the interest, because forfeiture occurs automatically when the condition is breached. Grantor does not have to act.
Ex: “To E as long as the property is never used as a commercial establishment.” Reverter or reentry?
Reverte
Transferibily of reverter
Possibility of reverter is alienable, devisable, and descendible.
Future interests by THIRD PARTIES/GRANTEES
A. Remainder- interest in a third party that immediately follows the natural expiration of the preceding interest
B.Executory Interest (RAP!) - Occurs if the interest will ONLY follow the violation of some condition.
Key to remainder
Key is that the first interest ends naturally and is not cut short by some other event, such as violation of a condition subsequent.
3 types of remainders
1 Contingent Remainder (RAP!)
2. Vested Remainder -Vested Remainder- Occurs if the identity is known AND the remainder is not subject to a condition precedent.
Contingent Remainder (RAP!)- Occurs if:
- The identity of the remainderman is unknown OR
- The remainder is subject to a condition precedent (condition that is part of the granting clause creating the remainder or comes in a previous clause).
Indefeasibly vested remainder
If there is NO CONDITION SUBSEQUENT, then —-> Indefeasibly vested remainder.
Ex: “To Jones for life, then to Smith.”
Vested remainder subject to open
If THE CLASS OF GRANTEES COULD EXPAND IN NUMBER, then ----> Vested remainder subject to open (RAP!). Ex: "To Albert for life, then to Albert's siblings"; If Albert's parents are still alive, then the class of siblings could expand.
Class can close in 2 ways
- Class closes naturally when no new class members can be created (i.e., Albert’s parents die); OR
- Class closes due to rule of convenience when the gift can be distributed and there is at least one eligible class member.
Rule of convience
K
Vested remainder subject to complete divestment.
If there is a CONDITION SUBSEQUENT that could divest the remainderman of the entire interest, then —-> Vested remainder subject to complete divestment.
Ex: “To Jones for life and then to Smith, but if Smith uses alcohol, then to Brown.”
“To Jones for life and then to Smith, but if Smith uses alcohol, then to Brown.”
Jones: LE
Smith: vested remainder in fee simple determinable subject to complete divestment
Brown: exec. Intrest in FSA
“To Jones for life, then to Smith if Smith survives Jones, otherwise to Brown”
O: reversion (dea)
Jones:LE
Smith: contingent remainder in FSA
Brown: contigent remainder in FSA
O: “ To Jones for life, the to Jones’ children alive at his death.
Present: jones has no kids
O: reversion inFSA
Jones: LE
Kids: contingent remainder in FSA
Exec intrest
Executory Interest (RAP!) - Occurs if the interest will ONLY follow the violation of some condition. Ex: To Jones, so long as no one uses alcohol on the property, and then to Smith." Here is no natural expiration of the first interest; the violation of a condition is the only way that Smith could get the property.
O grants “to A for life, then to B for life.” Then, will gives property to C.
A: LE
B has a indefeasibly vested remainder.
C has a reversion. C stands in the place of the original grantor (O).