LAND ESTATES (What type of interest?)

Question 1

Present Estates

Freehold:

Answer 1

Freehold: offers a present possessory interest in the estate.

Question 2

Fee Simple absolute

Answer 2

conveys absolute ownership of potentially infinite duration.

Question 3

Life Estate

Answer 3

is an interest that lasts for the lifetime of a person.

Question 4

Pur Autre Vie

Answer 4

lasts for the lifetime of an identified third party.

Question 5

Fee Tail

Answer 5

lasts as long as there are lineal blood descendants of the grantee.

Question 6

Defeasible

Answer 6

Defeasible
 Subject to Condition Subsequent has the potential to terminate the estate at the occurrence of a stated event.
o Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.
Explicit language of condition sub.:
But if … Provided that … Condition that … However … Subject to condition that …

Question 7

Subject to Condition

Answer 7

Subject to Condition Subsequent has the potential to terminate the estate at the occurrence of a stated event.

Question 8

Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.

Answer 8

Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.

Question 9

Explicit language of condition sub.:

Answer 9

But if … Provided that … Condition that … However … Subject to condition that …

Question 10

Determinable automatically terminates at the occurrence of a specified event.

Answer 10

Determinable automatically terminates at the occurrence of a specified event.

Question 11

Possibility of reverter

Answer 11

Possibility of reverter is the future interest the grantor retains - if the specified event occurs the property automatically reverts back to the grantor.
“SWUD” So long as, While, Until, During

Question 12

Subject to executory

Answer 12

Subject to executory limitation automatically terminates a preceding estate at the occurrence of a stated event and passes to a third person.

Executory interest is the future interest the third party holds.

Question 13

What do Future Interests offer…

Answer 13

Future Interests offer the potential of a future interest in an estate.

Question 14

Future interests of the holder=transferor

Answer 14

Holder = Transferor

1) Right of Reentry follows a fee simple subject to a condition subsequent.
2) Possibility of Reverter follows a fee simple determinable.
3) Reversion follows a life estate.

Question 15

Executory Interest is an interest

Answer 15

• Holder = Transferee
o Executory Interest is an interest in favor of a future grantee and follows a fee simple subject to executory limitation.
• Shifting: divests the transferee/3rd party.
• Springing: divests the transferor/grantor

Question 16

Remainder is a future interest that can only become possessory upon the expiration of a prior possessory estate created by the same instrument. A remainder never follows a defeasible fee.
 Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.
• Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
• Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D).

Answer 16

o Remainder is a future interest that can only become possessory upon the expiration of a prior possessory estate created by the same instrument. A remainder never follows a defeasible fee.
 Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.
• Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
• Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D).

Question 17

Contingent

Answer 17

Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.

Question 18

Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.

Answer 18

Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.

Question 19

Alternative contingent remainder

Answer 19

Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D)

Question 20

Vested: A vested remainder is a remainder that is

Answer 20

A vested remainder is a remainder that is: (1) created in a living, ascertainable person; AND (2) not subject to any condition precedent.
o Indefeasible: 100% certainty
o Subject to Open: class may enlarge
o Subject to Divestment: -> condition subsequent

Question 21

Rule Against Perpetuities

Answer 21

No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest.

Question 22

Must vest means

Answer 22

Must vest means if there’s even a remote chance it won’t vest in time, it’s void.

Question 23

“Bad for one, bad for all”

Answer 23

“Bad for one, bad for all” – for class gifts, if the gift to any member of a class won’t vest in time, the entire class gift fails.

Question 24

The time the interest is created
Wills
Revocable trusts
Deeds

Answer 24

The time the interest is created

1) Wills create interests when the testator dies.
2) Revocable trusts create interests when they become irrevocable.
3) Deeds create interests upon delivery.

Question 25

RAP applies to: [ECO]

Answer 25

RAP applies to: [ECO] • Executory interests • Contingent Remainders • Vested Remainder Subject to Open

Question 26

5 STEPS TO DETERMINE IF THE RAP IS VIOLATED

Answer 26

STEPS TO DETERMINE IF THE RAP IS VIOLATED • Step 1: Determine whether the FI AT ISSUE is SUBJECT to the RAP • Step 2: Determine when the PERPETUITY WINDOW begins “CONVEYS OR DEVISES” • Step 3: Determine what must happen for the FI to VEST OR FOREVER FAIL to vest (and for the class to close if applicable) • Step 4: Identify who the RELEVANT LIVES IN BEING are that can be used as the initial point in our P.W. • Step 5: Look into the CRYSTAL BALL TEST each relevant life to determine if any one can VALIDATE the FI.

Question 27

Uniform Statutory Rule Against Perpetuities

Answer 27

Uniform Statutory Rule Against Perpetuities A nonvested property interest is invalid UNLESS 1) it vests or terminates within 90 years after its creation. 2) If the common law RAP is not violated, the statutory RAP is not violated.

Question 28

TWO BRIGHT REDLINE RULES FOR RAP PER BB:

Answer 28

TWO BRIGHT REDLINE RULES PER BB: 1. An executory interest with NOT LITMIT attached on the TIME within which it must vest violates the RAP. 2. A gift to an OPEN CLASS conditioned upon members surviving to an AGE PAST 21 YEARS violates the RAP.

Question 29

The Rules of Destructibility

Answer 29

The Rules of Destructibility-- A contingent remainder is destroyed if it fails to vest when then the prior estate terminates.

Question 30

Rule in Shelley’s Case

Answer 30

If a conveyance creates a life estate or fee tail in a transferee AND also creates a remainder in fee simple in that transferee's heirs, then the future interest belongs to the transferee (NOT the heirs). O to A for life, then to A’s heirs – Historically, present and future interest merge => FSA

Question 31

The Merger Rule

Answer 31

Under the doctrine of merger, the transferee's smaller interest (i.e., life estate) "merges" into his larger interest (i.e., remainder in fee simple) resulting in a fee simple absolute estate.

Question 32

The Doctrine of Worthier Title

Answer 32

When there is a transfer or devise to a person and a remainder or executory interest to the grantor's heirs or next of kin, no future interest is created in the grantor's heirs. The grantor retains a reversion.

Question 33

Class Gifts

Answer 33

Class gifts--remainder is vested in a group of takes, at least one of whom is qualified to take (Open or closes.)

Question 34

Waste

Answer 34

Waste: tenant for life entitled to ordinary uses/profits – cannot lawfully do any act that would injure future ints. If he does- FI holder may sue for damages and/or enjoin such acts

Question 35

Affirmative

Answer 35

Affirmative – created by overt conduct that causes drop in value; LT must not consume or exploit natural resources on the property unless 1 of 4 exceptions applies: (“PuRGE”)

Question 36

Affirmative waste (“PuRGE”)

Answer 36

Affirmative – created by overt conduct that causes drop in value; LT must not consume or exploit natural resources on the property unless 1 of 4 exceptions applies: (“PuRGE”) Prior use (open mines doctr); Reas repairs & maint.; Grant (explicitly given right); Exploitation (land only suitable for)

Question 37

Permissive Waste

Answer 37

Permissive (neglect) – Occurs when land is allowed to fall into disrepair or LT fails to pay req carrying charges LT must maintain in reas good repair & pay all ordinary taxes to extent of profits/rent value

Question 38

Ameliorative Waste

Answer 38

Ameliorative – LT must not engage in acts that will enhance property’s value unless all of the future interest holders are (1) known & (2) consent OR (3) substantial & permanent change in neighborhood deprives prop of reason productivity/usefulness.

Question 39

Restraints on Alienation –

Answer 39

Restraints on Alienation – Absolute restraints on alienation are void, but reasonable time-limited purpose is allowed.