Ownership, Defeasible Fees, Life Estate, Future Interests Flashcards
What are the different ways in which property can be transferred (alienated)
- Sale
- Gift
- Devise
- Intestate Succession
When are gifts in a will (via devise) effective?
When the decedent dies
What is intestate succession?
When a person dies without a will, their heir at law (person who survives the decedent) takes by intestate succession
How are ownership interests divided
In time between present and future interests.
Key distinction: timing of possession – who has the right now and who will have the right in the future?
True or false: Someone must be ownership/possession of property at all times
True. Gaps in possession are not ideal.
Why is fee simple the largest possessory estate?
It’s capable of lasting forever.
It’s inheritable – upon owner’s death, the owner can pass it by will or intestate succession.
It’s transferrable – owner can gift or sell during the owner’s lifetime
What are the magic words for creation/identification of fee simple
“To A” (his/her heirs is now implied)
When there is an ambiguous grant, what is created?
If a grant is ambiguous, it creates a fee simple. This is the default estate b/c there’s a presumption that the grantor conveys the most s/he has.
Do words of intent or purpose hold meaning with a fee simple division?
NO. Precatory words such as “my hope and wish” are not enough to show actual intent
Is there a future interest associated with fee simple
No. Because it’s capable of lasting forever. No slicing/dicing of the interest yet.
What is the effect of a defeasible fee?
Condition or occurrence of an event will stop the fee simple
What is a fee simple determinable (FSD)?
Fee simple limited by specific durational language: “so long as” or “while” or “during” or “until”
True or false: In a fee simple determinable (FSD), the fee simple lasts while the period is in play, but as soon as the period ends, the fee simple ends
True.
What is a fee simple subject to condition subsequent (FSSCD)?
Fee simple limited by specific conditional language: “provided that” or “on the condition that” or “but if”
Is this a conditional or determinable fsd?
O conveys Blackacre “to A, but if the land is not farmed, O may reenter and retake the property”
Conditional, as O is entitled to take possession again when the the condition is met.
Focus on language to grantor
What is a possibility of reverter?
Future interest held by a grantor following a fee simple determinable
Ex: O conveys Blackacre “to A and her heirs, so long as the land is used as a public park.” O has a possibility of reverter if the land is not used as a park, his interest vests automatically.
When does the interest vest with a defeasible fee with possibility of reverter
Automatically after the durational period ends.
Fee Simple Determinable + ____________ go together
Possibility of Reverter
What happens when a future interest following a fee simple determinable is held by a third party and not a grantor?
Fee Simple Subject to Executory interest
What is the other term that equates to right of entry?
Power of termination
What is the right of entry?
Future interest held by the grantor following fee simple subject to condition subsequent.
Ex: O conveys Blackacre “to A and her heirs, but if the land is not used as a public park, O can re-enter and re-take.”
Does a right of entry vest automatically?
No, it must be reclaimed.
Fee simple subject to condition subsequent + ___________ go together?
Right of entry
Define Fee Simple Subject to Executory Interest
Fee simple ends upon the happening of an event and the future interest vests in a third party. Future interest is held in another transferee, not the grantor.
Ex: O conveys Blackacre “to A and her heirs, but if liquor is served on the premises, then to B and his heirs.” If liquor is served on Blackacre, Ben’s executory interest divests Anna of her fee simple
What is an executory interest?
A future interest that will cut short or terminate an earlier interest.
Define life estate
Present estate that is limited by a life
What is “pur autre vie”
Life estate measured against the life of someone else
True or false: A life estate is inheritable
False. A fee simple is inheritable whereas a life estate ends at the death of a measuring life
How are life estates terminated?
When the measuring life ends
True or false: Life estates are not transferrable
False. Life estates are transferrable during the measuring life.
If possession of the land goes back to the grantor after the life estate ends, the grantor retains…?
A reversion.
Ex: O conveys Blackacre “to A for life.” O retains a reversion. Upon Anna’s death, O takes the property in fee simple absolute.
If possession of land goes to a third party (transferee) after the life estate ends, the third party has….?
A remainder.
Ex: O conveys Blackacre “to A for life, then to B”.
A has a life estate. B has a remainder. Upon A’s death, B takes ownership in fee simple absolute. O has nothing left.
When does waste come into play with life estate?
when more than one party has an interest int he same piece of real property.
Ex: O conveys Blackacre “to A for life” A has been dumping hazardous materials onto the property, which have caused serious damage to Blackacre. Doctrine of waste gives O a claim to stop A from injuring the land.
Why? Because O has a reversion.
What are the three kinds of waste?
- Affirmative waste - voluntary, causes decrease in value
- Permissive – neglect, decrease in value
- Ameliorative – changing use of property, increases the value
In what situations does the doctrine of waste apply?
Landlord v. Tenant
Co-tenant out of possession v. tenant in possession (concurrent)
Mortgage (bank/lender) v. mortgageor (borrower)
Do multiple parties have simultaneous interest?
Is there a change in the value of the property due to the actions of the party in possession?
Will the waste substantially change the interests taken by the party out of possession?
What is a remainder?
Future interest that follows a present possessory life estate
True or false: A remainder cannot follow a vested fee simple
True.
A future interest following a vested fee simple would have to divest the prior interest (fee simple)
BUT a remainder does not function that way b.c it instead waits for the prior interest to end.
Remainders can be ______ or ______?
Vested or contingent
What are the two elements for a vested remainder:
Interest that is
1) Given to an ascertained person
2) NOT subject to condition precedent
Note: if either/both conditions are not met, the remainder is contingent
Is a vested remainder inheritable?
YES, if the holder of a vested remainder dies, the interest passes to the holder’s heirs
What sort of remainder are class gifts?
Vested Remainder Subject to Open
Vested remainder in class gift
Full class membership is unknown
What is required for a class gift be subject to open?
At least one person in the class must be vested
If no one in the class has vested, the remainder is contingent
What happens when all members of a class gift are identified?
The class is closed.
O conveys Blackacre “to A for life, then to A’s children who reach 21.” A has three kids: B is 25, C is 18 and D is 15.
What is B’s interest?
Why is it subject to open?
When will we know when the class closes and who the class members are?
If more of A’s children reach 21, what happens?
B’s interest is a vested remainder because he reached the age of 21 (he’s currently 25).
It is subject to open because B has vested and because C and D may make it to age 21
21 years after Anna’s death we will know when the class is closed and who the members are
Any more of A’s children who make it to 21 will partially divest B
Explain the rule of convenience
RAP applies to a vested remainder subject to open.
Rule of Convenience is a class closing mechanism to avoid RAP applying to a class gift.
If a grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession.
Explain doctrine of worthier title
Prevents against remainders in a grantor’s heirs
Creates a presumption of a reversion to grantor
O conveys, “To A for life, then to my heirs.”
What future interest does O retain under Doctrine of Worthier Title? Reversion
Explain the Rule in Shelley’s case
Prevents against remainders in a grantee’s heirs
Uses the doctrine of merger to create fee simple
O conveys, “to A for life, then to A’s heirs”
What estate does A have under the Rule in Shelley’s case? Fee simple
What are the two types of executory interests?
Springing: divests the grantor
* usually two parties (grantor + grantee) b/c grantee will divest grantor
Shifting: divests a prior grantee
** usually three parties (grantor + grantee + grantee) b/c grantee will divest another grantee
