M4: Future Interests

Question 1

What is a future interest?

Answer 1

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

Question 2

True or false: All three future interests retained by transferor are exempt from the rule against perpetuities

Answer 2

True!

Question 3

True or false: Once a reversion always a reversion

Answer 3

True!

Question 4

True or false: All reversions are certain

Answer 4

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)

Question 5

H: O grants his fee simple absolute “To A for life, then to B and his heirs” –> is there a reversion?

Answer 5

No, B gets the remainder in fee simple absolute after A’s life ends

Question 6

H: O grants his fee simple absolute “To A for life, then to B and the heirs of her body” –> is there a reversion?

Answer 6

No, A has a life estate. B has a remainder in fee simple absolute. “heirs of her body” –> fee tail not recognized

Question 7

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?

Answer 7

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

Question 8

H: O grants his fee simple absolute “To A for 20 years” - is there a reversion?

Answer 8

Reversion is certain back to O, there’s a term of years on the estate to A

Question 9

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?

Answer 9

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

Question 10

How do we know if a remainder is vested?

Answer 10

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

Question 11

How do we know if a remainder is contingent?

Answer 11

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

Question 12

What are the 3 types of Vested Remainders?

Answer 12

1) Indefeasibly Vested
2) Vested Remainder Subject to Divestment (VRSD)
3) Vested Remainder Subject to Open (VRSO)

Question 13

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?

Answer 13

+ 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

Question 14

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.”

Answer 14

+ 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?”

Question 15

Classify this type of remainder: “To A for life, then to B if B graduates from DU”

Answer 15

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

Question 16

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”

Answer 16

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

Question 17

When writing/examining a written conveyance, is a Contingent Remainder inside or outside the box?

Answer 17

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

Question 18

When writing/examining a written conveyance, is a Vested Remainder inside or outside the box?

Answer 18

Out of the Box: If, after words giving a vested interest, a clause is added divesting it, the remainder is vested

Question 19

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

Answer 19

True: FS –> CR(1) –> CR(2)

Question 20

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

Answer 20

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

Question 21

Why does the difference between CR and VR matter?

Answer 21

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

Question 22

Classify this remainder: “To A for life, then to A’s children and their heirs”

+ A has one child, Bob
+ A is still alive

Answer 22

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

Question 23

Classify this remainder: “To A for life, then to A’s children”
+ A has no children
+ A is still alive

Answer 23

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

Question 24

What is the rule of destructibility and is it still used today in modern law?

Answer 24

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

Question 25

What is the rule of Shelley's Law and is it still used today in modern law?

Answer 25

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

Question 26

What is the Doctrine of Worthier Title and is it still used today in modern law?

Answer 26

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

Question 27

What pairs with an Executory Interest?

Answer 27

Fee Simple Subject to Executory Interest

Question 28

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?

Answer 28

No, the words "and her heirs" in the transfer to A are "words of limitation" and create no interest in anyone but A.

Question 29

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?

Answer 29

"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.

Question 30

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?

Answer 30

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.

Question 31

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?

Answer 31

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.

Question 32

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?

Answer 32

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.

Question 33

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?

Answer 33

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!

Question 34

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 . . .

Answer 34

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.

Question 35

True or false: Executory Interests and Reversions are mutually exclusive

Answer 35

True: Reversions can only be created in grantor whereas EI's are usually created in grantee (shifting EI)

Question 36

H: To Alfredo for life, then to Beatrice if B gives A the best party ever with Taylor swift performing"

Answer 36

``` 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 ```

Question 37

If the future interest following a life estate is in the grantee, what is it called?

Answer 37

Remainder

Question 38

If the future interest following a term of years is in the grantee, what is it called?

Answer 38

Remainder

Question 39

What is the name of the grantee's future interest that "waits patiently" for the prior estate to end naturally?

Answer 39

Remainder

Question 40

How can you recognize a contingent remainder?

Answer 40

Unascertained OR condition precedent (or both)

Question 41

What defines a vested remainder?

Answer 41

Ascertained AND no condition precedent (must have both)

Question 42

What is a condition precedent?

Answer 42

Inside the box: must be satisfied before estate becomes possessory

Question 43

Is a reversion vested or contingent?

Answer 43

vested

Question 44

Is a right of entry vested or contingent?

Answer 44

vested

Question 45

Is a possibility of reverter vested or contingent

Answer 45

vested

Question 46

To whom does a reversion belong?

Answer 46

Grantor

Question 47

To whom does a remainder belong?

Answer 47

Grantee

Question 48

What is the difference between a remainder and a reversion?

Answer 48

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.

Question 49

O: "To A and her heirs until B marries" --> what do A and O have respectively?

Answer 49

``` A = FSD B = EI O = POR ```

Question 50

O: "To A while A serves in the US armed forces, then to B"

Answer 50

``` A = FSD B = EI O = POR ```

Question 51

O: To A and her heirs, however if B marries, then to B

Answer 51

``` A = FSSEI B = EI ```

Question 52

O: To A, however if A uses the land for a tavern, then to O

Answer 52

``` A = FSSCS O = ROE ```

Question 53

If the future interest following a fee simple determinable is in a second grantee, what is it called?

Answer 53

Executory Interest

Question 54

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"

Answer 54

Executory interest

Question 55

O: To A for life, then to B for life, then to C, but if B sells liquor on the property, then to D.

Answer 55

``` 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

Question 56

O: To A for life, then to B after she writes O's obituary

Answer 56

A= life estate B = Springing EI O: Reversion subject to EI

Question 57

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

Answer 57

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

Question 58

O: To A and her heirs, but if A divorces her wife, then to B for life, then to O and his heirs

Answer 58

A: FSSEI B: Shifting EI in Life Estate O: reversion in FSA

Question 59

O: To A for as long as she shall live, then to my other surviving children

Answer 59

A = LE O's Children = CR O = reversion in FSA

Question 60

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)

Answer 60

``` A = LE B = VRSD in LE C = shifting EI ```

Question 61

O: To my brother if and when he survives his wife

Answer 61

Brother: FSSEI | O = springing EI

Question 62

What do we call a second grantee's future interest that follows a life estate determinable

Answer 62

Remainder

Question 63

O: "To A for life, then to B and her heirs." Is there a reversion?

Answer 63

NO, A has a life estate, B has a remainder in FSA There's nothing left to revert back to O

Question 64

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?

Answer 64

``` 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.

Question 65

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?

Answer 65

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.

Question 66

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.

Answer 66

``` 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.

Question 67

O: "to A for life, and in the event of A's death to B and her heirs."

Answer 67

``` 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.

Question 68

O: "to A and B for their joint lives, then to the survivor in fee simple."

Answer 68

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.

Question 69

O: "to A for life, then to B for life, then to C and her heirs." What interest does B have?

Answer 69

``` 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.

Question 70

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 . . .

Answer 70

Contingent! Reaching 21 is a condition precedent.

Question 71

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 . . .

Answer 71

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.

Question 72

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?

Answer 72

``` A = Life Estate B = VRSO ``` VR because B is alive and ascertained. Subject to open because A could have more children.

Question 73

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?

Answer 73

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

Question 74

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 . . .

Answer 74

CR = because reaching 21 is a condition precedent.

Question 75

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?

Answer 75

Present possessory life estate in A, vested remainder subject to open in C and D A is still alive and can have more children

Question 76

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?

Answer 76

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

Question 77

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?

Answer 77

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

Question 78

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?

Answer 78

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.

Question 79

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?

Answer 79

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

Question 80

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?

Answer 80

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.

Question 81

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?

Answer 81

Present possessory life estate in A, vested remainder subject to open in C and D.