M4: Future Interests Flashcards
What is a future interest?
Confers rights to the enjoyment of property at a future time
Almost every trust today involves one or more future interests
At the foundation blocks of wills and estate planning
True or false: All three future interests retained by transferor are exempt from the rule against perpetuities
True!
True or false: Once a reversion always a reversion
True!
True or false: All reversions are certain
False: Reversions are not always certain
Certain (Term of Years + Reversion): Ex: “To A for five years”
O’s Deed → A’s 5 years → O’s reversion (in FS)
Not Certain: “To A for Life, then to B if B grows to be 6 ft tall, if not to C if she becomes a botanist, then to D if D graduates from DU law”
O’s Deed—> A’s life estate —> and if B, C, D don’t meet the conditions? → O’s reversion (in FS)
H: O grants his fee simple absolute “To A for life, then to B and his heirs” –> is there a reversion?
No, B gets the remainder in fee simple absolute after A’s life ends
H: O grants his fee simple absolute “To A for life, then to B and the heirs of her body” –> is there a reversion?
No, A has a life estate. B has a remainder in fee simple absolute. “heirs of her body” –> fee tail not recognized
H: O grants his fee simple absolute “To A for life, then to B and his heirs if B attains the age of 21 before A dies” is there a reversion?
A has a life estate, B has a remainder in fee simple absolute. Reversion is not certain.
If A lives another 6 years, no reversion
If A does not live another 6 years, reversion back to O
H: O grants his fee simple absolute “To A for 20 years” - is there a reversion?
Reversion is certain back to O, there’s a term of years on the estate to A
H: O grants his fee simple absolute “To A for life, then to B for life” then O dies with a will devising all of O’s property to C. Then A dies, then B dies.
Who owns the estate?
A has a life estate
B has a successive life estate
Once A and B are dead, it reverts back to O/C in fee simple absolute
How do we know if a remainder is vested?
Both must be true!
1) Given to an ascertained person AND
2) Not subject to a condition precedent
If it is created in an ascertained person AND ready to become possessory whenever and however all preceding estates expire
How do we know if a remainder is contingent?
1/2 must be true (or both):
1) Given to an unascertained person OR
2) Made contingent upon some event occurring other than the natural termination of the precedeeding estate (subject to a condition precedent)
Either way, it’s not ready now to become possessory upon the expiration of preceding estate
What are the 3 types of Vested Remainders?
1) Indefeasibly Vested
2) Vested Remainder Subject to Divestment (VRSD)
3) Vested Remainder Subject to Open (VRSO)
Classify this type of remainder: “To A for life, then to B and her heirs”
What if B dies? Does that change B’s future interest?
+ B has an indefeasibly vested remainder certain to become possessory upon termination of A’s life estate (in FSA)
+ If B dies during A’s life, on B’s death, B’s remainder passes to B’s devisees (if B has a will) or to B’s heirs (if intestate) or to the state (eschat)
+ B (or B’s successors in) interest is certain to take possession upon A’s death, B cannot lose the property.
Note: No reversion of any kind: once you add A’s life estate to B’s FSA = nothing left
Classify this type of remainder: “To A for life, then to B and B’s heirs, but if B does not survive A, to C and his heirs.”
+ B does not have a contingent remainder, but a VRSD
+ C has a shifting EI
Why isn’t B’s interest a CR?
+ B is not subject to condition precedent, which makes it a vested remainder, not CR
+ C takes on the condition “but if B does not survive A” in his Executory Interest which can become possessory only by divesting B’s remainder –> “Is it time yet?”
Classify this type of remainder: “To A for life, then to B if B graduates from DU”
A = life estate B = contingent remainder in graduating from DU
Why is B’s interest a CR and not VR?
+ B is subject to a condition precedent, which then makes it a CR
Classify this type of remainder: “To A for life, then to B and her heirs if B survives A, and if B does not survive A to C and his heirs”
A = life estate
B = CR
C= CR
–> Alternate Contingent Remainders:
1) “If B survives A” subjects B’s remainder to the condition precedent of B surviving A
OR
2) “And if B does not survive A” subjects C’s remainder to the opposite condition precedent
When writing/examining a written conveyance, is a Contingent Remainder inside or outside the box?
Inside the Box: If the conditional element is incorporated into the description of, or into the gift to the remaindermen, the the remainder is contingent
When writing/examining a written conveyance, is a Vested Remainder inside or outside the box?
Out of the Box: If, after words giving a vested interest, a clause is added divesting it, the remainder is vested
True or false: If the first future interest created is a contingent remainder in FS, the second future interest in a transferee will also be a contingent remainder
True: FS –> CR(1) –> CR(2)
True or false: If the first future interest created is a vested remainder in FS, the second future interest in a transferee will be a VRSO
False: FS –> VR –> EI
If the first future interest created is a vested remainder in FS, the second future interest in a transferee will be a divesting executory interest
Why does the difference between CR and VR matter?
1) Acceleration
Vested Remainders = accelerate possession whenever the preceding estate ends
Contingent Remainders = cannot become possessory so long as it is contingent
2) RAP (most important difference)
Contingent remainders are subject to RAP
Vested remainders are not subject to RAP
Classify this remainder: “To A for life, then to A’s children and their heirs”
+ A has one child, Bob
+ A is still alive
Vested Remainder Subject to Open
Why?
+ We have one ascertained person
+ No condition precedent
+ The group of people “A’s children” isn’t fully determined yet = A could still have more kids
Classify this remainder: “To A for life, then to A’s children”
+ A has no children
+ A is still alive
Contingent Remainder in Fee Simple
Why?
+ A doesn’t have any children… yet
+ No ascertained people
+ A’s Children have a CR in Fee Simple
What is the rule of destructibility and is it still used today in modern law?
Removing/Destructing CR’s if they did not vest in time, reverting back to O
Ex: To A for life, then to B if he has reached 18
destructibility: If A dies when B is 17, the property would revert back to O.
Abolished.
Instead, today this is rarely seen but instead of destruction, O would have FSSEI until B turned 18, B has a executory interest in fee simple
What is the rule of Shelley’s Law and is it still used today in modern law?
A would get the property in FSA and heirs would get nothing, according to Shelley’s Law. If unknown/ascertained remainders, they get nothing. Abolished.
Ex: To A for life, then to A’s heirs
Today, A would have a life estate, A’s heirs would have a contingent remainder
What is the Doctrine of Worthier Title and is it still used today in modern law?
To A for life, then to O’s heirs
Worthier title: After A’s life estate ends, the property reverts back to O –> abolished
Modern law: A’s life estate is followed by contingent remainder
What pairs with an Executory Interest?
Fee Simple Subject to Executory Interest
H: O conveys Greenacre to “A and her heirs.” A’s only child, B, runs up large unpaid bills. B’s creditors can attach all B’s property to satisfy their claims. Does B have an interest in Greenacre that his creditors can reach?
No, the words “and her heirs” in the transfer to A are “words of limitation” and create no interest in anyone but A.
H: O, owner of Blackacre, has two children, A (daughter) and B (son) and no surviving spouse. B dies testate (with a will), devising all his property to W (his wife). B is survived by three children, B1 (daughter), B2 (son) and B3 (daughter). A has one child, A1 (son). O then dies intestate. If O died in Colorado in 2003, who owns Blackacre?
“I’m not dead yet”
One-half to A and one-sixth each to B1, B2 and B3
This is how distribution by representation or “per stirpes” (meaning by the roots) works.
+ The two lineal descendants of O, A and B, would have each gotten 1/2 as the two children of O.
+ So, A gets 1/2 and B gets 1/2.
+ However, because B predeceased O, B’s children step into his place and share equally in B’s 1/2 shares by representation.
+ Each child of B gets 1/6 each.
+ W has no interest despite B’s will because at the time B died, he had no interest yet in Blackacre to leave by will, either to W or anyone else! Blackacre came to B only later, when O died, and passed directly to B’s children by representation.
H: O, owner of Blackacre, has two children, A (daughter) and B (son) and no surviving spouse. B dies testate (with a will), devising all his property to W (his wife). B is survived by three children, B1 (daughter), B2 (son) and B3 (daughter). A has one child, A1 (son). O dies O dies intestate. If O died in England in 1800, who owns Blackacre?
B2, the only son of the only son.
In 1800 and in England, primogeniture still governed and it requires property to pass only to first born sons.
H: O conveys Blackacre to “A and his heirs in fee simple absolute.” A dies without a will and without heirs. O survives. Who owns Blackacre?
The State by escheat, O gave away his whole estate to A by giving A a fee simple absolute. When A dies without any heirs, the state takes by escheat.
H: O conveys Blackacre to “A for life, then to B and her heirs in fee simple absolute.” B dies without a will and without heirs of any kind. A dies survived by a spouse, H. O survives. Who owns Blackacre?
The State by escheat
O gave B the entire fee simple absolute. There was nothing left for O when B died without a will/heirs.
A doesn’t get it because A had a life estate, enjoyed it during their life.
H: O conveys property to “A and her heirs, but if, at any time, A endeavors to sell or otherwise transfer the property, title shall pass immediately to B.” What type of restraint is this?
This is a forfeiture restraint on alienation.
if A tries to sell, title is automatically forfeit over to B. It isn’t just that the transfer would be void and null (as in the case of a disabling restraint), but A would lose title to someone else!
H: O conveys property to “A and her heirs, provided, however, that A absolutely lacks the power to sell, transfer or give” the property “in any manner whatsoever.” This is a . . .
This is a disabling restraint on alienation
This one is pretty close to an absolute disabling restraint on alienation in that A is not allowed to do anything! It is probably void.
True or false: Executory Interests and Reversions are mutually exclusive
True: Reversions can only be created in grantor whereas EI’s are usually created in grantee (shifting EI)
H: To Alfredo for life, then to Beatrice if B gives A the best party ever with Taylor swift performing”
A = LE B = NOT a CR, but a springing EI. B is not capable of going into possession immediately when the preceding estate ends. There's a gap in time between when B can organize this badass party with Taylor Swift O = Reversion until/if the party happens
If the future interest following a life estate is in the grantee, what is it called?
Remainder
If the future interest following a term of years is in the grantee, what is it called?
Remainder
What is the name of the grantee’s future interest that “waits patiently” for the prior estate to end naturally?
Remainder
How can you recognize a contingent remainder?
Unascertained OR condition precedent (or both)
What defines a vested remainder?
Ascertained AND no condition precedent (must have both)
What is a condition precedent?
Inside the box: must be satisfied before estate becomes possessory
Is a reversion vested or contingent?
vested
Is a right of entry vested or contingent?
vested
Is a possibility of reverter vested or contingent
vested
To whom does a reversion belong?
Grantor
To whom does a remainder belong?
Grantee
What is the difference between a remainder and a reversion?
A reversion is a future interest retained by a grantor who has transferred an inherently limited possessory estate.
If the grantor transfers the future interest to a second grantee in the same instrument, the future interest is called a remainder.
O: “To A and her heirs until B marries” –> what do A and O have respectively?
A = FSD B = EI O = POR
O: “To A while A serves in the US armed forces, then to B”
A = FSD B = EI O = POR
O: To A and her heirs, however if B marries, then to B
A = FSSEI B = EI
O: To A, however if A uses the land for a tavern, then to O
A = FSSCS O = ROE
If the future interest following a fee simple determinable is in a second grantee, what is it called?
Executory Interest
What do we call a second grantee’s future interest when it follows a conveyance like “To A and her heirs until B retires from the Army”
Executory interest
O: To A for life, then to B for life, then to C, but if B sells liquor on the property, then to D.
A = Life Estate B = VR (life estate) C = VRSD D = EI
VRSD = prevents possession to C, if B ever messes up and sells liquor on the property
O: To A for life, then to B after she writes O’s obituary
A= life estate
B = Springing EI
O: Reversion subject to EI
O: To A for life, then to B if B is alive at A’s death, but if B is not alive at A’s death, then to C’s children
A = LE
B: CR
C’s children: CR b/c not ascertainable and subject to condition precedent
O: Reversion b/c C may never have kids
O: To A and her heirs, but if A divorces her wife, then to B for life, then to O and his heirs
A: FSSEI
B: Shifting EI in Life Estate
O: reversion in FSA
O: To A for as long as she shall live, then to my other surviving children
A = LE
O’s Children = CR
O = reversion in FSA
O: to A for life, then to A’s oldest child for life, provided that if A or A’s oldest child should join a cult during either of the life estates, then to C for life
(A has one child, B)
A = LE B = VRSD in LE C = shifting EI
O: To my brother if and when he survives his wife
Brother: FSSEI
O = springing EI
What do we call a second grantee’s future interest that follows a life estate determinable
Remainder
O: “To A for life, then to B and her heirs.” Is there a reversion?
NO,
A has a life estate, B has a remainder in FSA
There’s nothing left to revert back to O
O: “to A for life, then to B and her heirs if B reaches 21 before A dies.” At the time of the conveyance B is 15. Is there a reversion?
A = Life Estate B = CR O = Reversion
The law hates gaps in possession. Someone should have the right to possess the land at all times. So, here O’s reversion is implied and represents the possibility that B might not reach 21 before A dies. O holds this implied reversion in such a case until and if B reaches 21.
O: “to A for life, then to B and her heirs if B reaches 21 before A dies.” At the time of the conveyance B is 15. B lives to be 21 and A throws her a big birthday party. Is there still a reversion?
NO, Once B celebrates his 21st birthday, he has met the condition of reaching 21 during A’s life (A threw him the party), so his contingent remainder becomes indefeasibly vested. Once that happens, the implied reversion in O disappears.
O: “O conveys Blackacre “to A for life, then to B if B gives A a proper funeral.” What should we call the interest B has. Hint: Think about what would happen if B failed to give A a proper funeral.
A = life estate B = springing EI O = reversion
Because it takes some time for a proper funeral to be organized and completed, O has another technical, implied reversion until the funeral takes place. Thus, for B’s executory interest to take possession, B must meet the condition and divest O’s reversion. To be more precise, this makes B’s future interest a springing executory interest because it divests the grantor, O.
O: “to A for life, and in the event of A’s death to B and her heirs.”
A = LE B = VR in FSA
The ascertained person part is hopefully not in question. The key is if the death of the previous life estate holder a real condition? It is not. Death is certain. The moment A dies, we will know the identity of the person who gets the right to immediate possession, which would be B.
O: “to A and B for their joint lives, then to the survivor in fee simple.”
Successive life estates, followed by Alternate Contingent Remainders.
The identity of the taker (either A or B) is uncertain because you don’t know who will survive.
O: “to A for life, then to B for life, then to C and her heirs.” What interest does B have?
A = life estate B = life estate C = VR in FSA
A future interest that could be called either a vested remainder for life or a successive life estate. It is vested because it is created in an ascertained person and is not subject to a condition precedent. Keep in mind that a future interest can be called vested but never actually come into possession. This is the case here. We call B’s remainder vested now because the identity of the taker is ascertainable and there are no conditions precedent. However, B could die before A dies and in such case, his vested remainder for life will never become possessory, and upon A’s death, Blackacre will go directly to C’s vested remainder in fee simple absolute.
O: “to A for life, then to A’s children who shall reach 21.” The oldest of A’s three children, B, is 17. The remainder O created is . . .
Contingent!
Reaching 21 is a condition precedent.
O: “to A for life, then to A’s children who shall reach 21.” At the time of the conveyance, A’s oldest child, B, is 17. B reaches 21 and A throws him a big birthday party. After the party, the remainder B has is . . .
VRSO
At least one of A’s children reaches the condition and so it’s officially vested. A threw the party so A is still alive. A could have more children. Those children, should they reach 21 will take a share with B. Thus, B’s share is vested in B but subject to open or sharing with other siblings who reach 21.
T devises Blackacre “to my son A for life, then to A’s children and their heirs.” At the time of T’s death, A has one child, B. What interests has T created?
A = Life Estate B = VRSO
VR because B is alive and ascertained. Subject to open because A could have more children.
O conveys “to A and B for their joint lives, then to the survivor in fee simple.” what are the titles in A and B?
A = CR, B = CR, but NOT pair of alt. CR’s because of the language
The identity of the taker (either A or B) is uncertain because you don’t know who will survive. This differs from Question 5 where you know for sure B will vest.\
O = backup reversion
O conveys “to A for life, then to A’s children who shall reach 21.” The oldest of A’s three children, B, is 17. The remainder O created is . . .
CR = because reaching 21 is a condition precedent.
T devises Blackacre “to my son A for life, then to A’s children and their heirs.” At the time of T’s death, A has one child, B. Two years later A has another child, C. Then B dies, leaving a husband, D, and a child, E. B’s will devises all her property to her husband, D. What interest exist after the death of B?
Present possessory life estate in A, vested remainder subject to open in C and D
A is still alive and can have more children
T devises Blackacre “to my son A for life, then to A’s children and their heirs.” At the time of T’s death, A has one child, B. Two years later A has another child, C. Then B dies, leaving a husband, D, and a child, E. B’s will devises all her property to her husband, D. Then A dies, survived by C, D and E. Who owns Blackacre?
D and C in equal shares.
Devise = upon death
Why does per stirpes not apply?
1) T died with a will, there would be no future interests created if he did not have a will
2) B died after T, so B had possession of the property at the time of their death. S.he can will the property to whomever they like
T devises Blackacre “to my son A for life, then to A’s children and their heirs, and if any child dies during the lifetime of A, such child’s share shall go to his or her issue who survive A.” At the time of T’s death, A has two children B and C. What interest has T created in B and C?
All of these:
VRSD = B or C may die before A, “such child’s share shall go to his/her issue who survives A” –> creating EI in surviving issue
VR = B and C are known, not subject to condition precedent
VRSO = A is still alive, A may have more children
T devises Blackacre “to my son A for life, then to A’s children and their heirs, and if any child dies during the lifetime of A, such child’s share shall go to his or her issue who survive A.” At the time of T’s death, A has two children B and C. Then B dies, leaving a husband D and a child E. B devises all her property to D. What interest does D have?
D has whatever B devised to him in their will, E has an executory interest in B’s share of the property. E does not come into possession until A dies (E has to survive A) - condition precedent.
A could also still have more children, so we don’t even know what share will be split.
T devises Blackacre “to my son A for life, then to A’s children and their heirs, and if any child dies in the lifetime of A, such child’s share shall go to his or her issue who survive A.” At the time of T’s death, A has two children B and C. Then B dies, leaving a husband D and a child E. B devises all her property to D. What interest does E have?
Nothing, unless she survives A.
E has an executory interest, subject to condition precedent to outliving A.
A could have more children and A could outlive E
T devises Blackacre “to my son A for life, then to A’s children and their heirs, and if any child dies during the lifetime of A, such child’s share shall go to his or her issue who survive A.” At the time of T’s death, A has two children B and C. Then B dies, leaving a husband D and a child E. B devises all her property to D. Then C dies, leaving a wife, F, and no issue. C devises all her property to F. Then A has another child, G. Then - finally - A dies, survived by D,E,F and G. Who owns Blackacre?
E, F and G each have a one third interest.
At long last, A dies. Of her children, B, C and G, only B left a child capable of divesting B’s share. Here E finally satisfied the condition of surviving A and takes his parent B’s 1/3 share. So, E elbows out D. F gets C’s 1/3 share by will. G, as a living child of A, gets his 1/3 share.
T devises Blackacre “to my son A for life, then to A’s children and their heirs.” At the time of T’s death, A has one child, B. Two years later A has another child, C. Then B dies, leaving a husband, D, and a child, E. B’s will devises all her property to her husband, D. What interest exist after the death of B?
Present possessory life estate in A, vested remainder subject to open in C and D.