MK made Prop Barmax Flashcards
In a fee simple subject to condition subsequent, what
happens if the condition fails?
The estate does not terminate automatically. To terminate the estate,
Grantor or Grantor’s heirs must exercise their right of entry.
What does it mean that an interest is
devisable,
descendible, or
alienable?
A devisable interest can be passed to the beneficiaries of a will.
A descendible interest can pass to heirs through intestate succession.
An alienable interest can be transferred inter vivos by gift or deed.
What is a fee simple subject to executory limitation, and
what future interest accompanies it?
A fee simple subject to executory limitation provides for the estate to
pass to a third person upon the happening of a stated event.
E.g., “To A, but if Event X occurs, then to B.”
The future interest held by the third party (here, B) is an executory
interest.
What is an absolute restraint on alienation, and what is
its legal effect?
An absolute restraint on alienation is a condition that prohibits any_
further transfer or sale of the land. The condition is void and
unenforceable because public policy favors the free alienability of
land.
Therefore, a grant “To A and his heirs, provided they never sell
the land,” will be read, “To A and his heirs,” granting fee simple
absolute. The offending provision is effectively crossed out.
What present estate is granted by the language, “to A for
life,” or “to A, until her death?”
What future interest accompanies it?
The present interest is a life estate.
The accompanying future interest is a remainder (if the property is to
pass to a third party) or a reversion (if the property is to revert back to
Grantor or Grantor’s heirs.)
Is a life estate devisable, descendible, and/or alienable?
A life estate is NOT devisable or descendible. It CANNOT be passed
down in a will or by intestate succession because when the life tenant
dies, the interest terminates.
A life estate is alienable: it can be transferred inter vivos, but the
transferee’s interest in the land only lasts as long as the life estate
holder is alive.
In review, what are the 3 types of future interests that
may be retained by a Grantor, and when do they occur?
A Grantor may retain a:
- possibility of reverter — property reverts automatically upon
failure of a condition in a fee simple determinable;
2.r_ight of entry_ (or power of termination) — gpon failure of a
condition subseqm, a Grantor myfl to exercise the right
of entry;
- reversion — occurs automatically after termination of a life estate
or term of yfl, if no third-party recipient is specified.
What 2 future interests may be held by third parties (i.e.,
remote grantees)?
Future interests held by remote grantees are:
- remainders (following a life estate or term of years); or
- executory interests (following a fee simple subject to executory
limitation).
What is the difference between a vested and contingent remainder?
A vested remainder belongs to an ascertained person and is not subject to any condition; it becomes possessory automatically upon termination of the prior estate.
A contingent remainder belongs to unascertained parties OR is
subject to a condition precedent.
What does it mean if a vested remainder is:
- indefeasibly vested;
- subject to defeasance; or
- subject to open?
- An indefeasibly vested remainder is certain of becoming
possessory.
E.g., “To A for life, then to B.” Because A is certain to die
someday, the interest of B is certain. Even if B dies first, B’s
heirs have the interest.
- A vested remainder subject to defeasance (or subject to “total
divestment”) is a vested remainder that my be divested if a
condition occurs or fails to occur.
3.A vested remainder subject to open is vested in a class of
persons, at least one of whom is qualified to take possession, but
the shares of class members are not yet fixed because m
persons can become members of the class.
Which future interests are never subject to the Rule Against Perpetuities?
The Rule Against Perpetuities does NOT apply to
future interests retained by the Grantor (possibility of reverter,
right of entry, reversion);
indefeasibly vested remainders; or
vested remainders subject to defeasance.
What future interests my be subject to the Rule Against Perpetuities?
The Rule Against Perpetuities can affect
- contingent remainders
- executory interests
- vested remainders subject to open
What needs to happen for a contingent remainder to “vest” for RAP purposes?
A contingent remainder vests when the taker or takers are all
identified and all conditions precedent are satisfied.
If it is possible that the takers will not all be identified or the conditions not satisfied by 21 years after the end of a life in being, then the contingent remainder is invalid because it violates the common law RAP.
When does an executory interest vest?
An executory interest vests when its holder takes possession of the
land.
NOTE: An executory interest with no time limit will violate the RAP.
When does a vested remainder subject to open vest?
An interest that is still open at the time of the grant vests at the time
the class closes.
For example, a class gift to “A’s children” vests at the time A dies
(because at that point, A cannot have or adopt more children.)
