Ownership, Defeasible Fees, Life Estate, Future Interests

Question 1

What are the different ways in which property can be transferred (alienated)

Answer 1

1. Sale
2. Gift
3. Devise
4. Intestate Succession

Question 2

When are gifts in a will (via devise) effective?

Answer 2

When the decedent dies

Question 3

What is intestate succession?

Answer 3

When a person dies without a will, their heir at law (person who survives the decedent) takes by intestate succession

Question 4

How are ownership interests divided

Answer 4

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?

Question 5

True or false: Someone must be ownership/possession of property at all times

Answer 5

True. Gaps in possession are not ideal.

Question 6

Why is fee simple the largest possessory estate?

Answer 6

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

Question 7

What are the magic words for creation/identification of fee simple

Answer 7

“To A” (his/her heirs is now implied)

Question 8

When there is an ambiguous grant, what is created?

Answer 8

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.

Question 9

Do words of intent or purpose hold meaning with a fee simple division?

Answer 9

NO. Precatory words such as “my hope and wish” are not enough to show actual intent

Question 10

Is there a future interest associated with fee simple

Answer 10

No. Because it’s capable of lasting forever. No slicing/dicing of the interest yet.

Question 11

What is the effect of a defeasible fee?

Answer 11

Condition or occurrence of an event will stop the fee simple

Question 12

What is a fee simple determinable (FSD)?

Answer 12

Fee simple limited by specific durational language: “so long as” or “while” or “during” or “until”

Question 13

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

Answer 13

True.

Question 14

What is a fee simple subject to condition subsequent (FSSCD)?

Answer 14

Fee simple limited by specific conditional language: “provided that” or “on the condition that” or “but if”

Question 15

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”

Answer 15

Conditional, as O is entitled to take possession again when the the condition is met.

Focus on language to grantor

Question 16

What is a possibility of reverter?

Answer 16

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.

Question 17

When does the interest vest with a defeasible fee with possibility of reverter

Answer 17

Automatically after the durational period ends.

Question 18

Fee Simple Determinable + ____________ go together

Answer 18

Possibility of Reverter

Question 19

What happens when a future interest following a fee simple determinable is held by a third party and not a grantor?

Answer 19

Fee Simple Subject to Executory interest

Question 20

What is the other term that equates to right of entry?

Answer 20

Power of termination

Question 21

What is the right of entry?

Answer 21

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.”

Question 22

Does a right of entry vest automatically?

Answer 22

No, it must be reclaimed.

Question 23

Fee simple subject to condition subsequent + ___________ go together?

Answer 23

Right of entry

Question 24

Define Fee Simple Subject to Executory Interest

Answer 24

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

Question 25

What is an executory interest?

Answer 25

A future interest that will cut short or terminate an earlier interest.

Question 26

Define life estate

Answer 26

Present estate that is limited by a life

Question 27

What is “pur autre vie”

Answer 27

Life estate measured against the life of someone else

Question 28

True or false: A life estate is inheritable

Answer 28

False. A fee simple is inheritable whereas a life estate ends at the death of a measuring life

Question 29

How are life estates terminated?

Answer 29

When the measuring life ends

Question 30

True or false: Life estates are not transferrable

Answer 30

False. Life estates are transferrable during the measuring life.

Question 31

If possession of the land goes back to the grantor after the life estate ends, the grantor retains…?

Answer 31

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.

Question 32

If possession of land goes to a third party (transferee) after the life estate ends, the third party has….?

Answer 32

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.

Question 33

When does waste come into play with life estate?

Answer 33

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.

Question 34

What are the three kinds of waste?

Answer 34

1. Affirmative waste - voluntary, causes decrease in value
2. Permissive – neglect, decrease in value
3. Ameliorative – changing use of property, increases the value

Question 35

In what situations does the doctrine of waste apply?

Answer 35

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?

Question 36

What is a remainder?

Answer 36

Future interest that follows a present possessory life estate

Question 37

True or false: A remainder cannot follow a vested fee simple

Answer 37

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.

Question 38

Remainders can be ______ or ______?

Answer 38

Vested or contingent

Question 39

What are the two elements for a vested remainder:

Answer 39

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

Question 40

Is a vested remainder inheritable?

Answer 40

YES, if the holder of a vested remainder dies, the interest passes to the holder’s heirs

Question 41

What sort of remainder are class gifts?

Answer 41

Vested Remainder Subject to Open

Vested remainder in class gift
Full class membership is unknown

Question 42

What is required for a class gift be subject to open?

Answer 42

At least one person in the class must be vested
If no one in the class has vested, the remainder is contingent

Question 43

What happens when all members of a class gift are identified?

Answer 43

The class is closed.

Question 44

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?

Answer 44

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

Question 45

Explain the rule of convenience

Answer 45

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.

Question 46

Explain doctrine of worthier title

Answer 46

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

Question 47

Explain the Rule in Shelley’s case

Answer 47

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

Question 48

What are the two types of executory interests?

Answer 48

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