Present Estates and Future Interests Flashcards
Present possessory estate
An interest that gives the holder the right to present possession.
- fee simple absolute
- defeasible fee
- life estate
Fee simple absolute
“To A” or “To A and his heirs”
Absolute ownership of indefinite or potentially infinite duration. Freely transferable, devisable by will, and descendible through intestacy.
Defeasible fee
Fee simple estates that can be terminated upon the happening of a stated event.
Fee simple determinable
Terminates upon happening of stated event and automatically reverts to the grantor (possibility of reverter).
“To a for so long as…” “to a while…” “to a during…” “To A until…”
Transferable, devisable, descendible but always subject to the condition.
Fee simple subject to condition subsequent
Grantor reserves the right to terminate the estate upon happening of a stated event. Estate does not automatically terminate, grantor must take some action. Grantor holds right of entry synonymous with power of termination.
Two main ingredients- conditional words like “upon condition that, but if, if it happens that” + an explicit statement of the grantor’s right to re-enter.
Most courts hold that rights of entry are not transferable inter vivos but agree they are devisable by will and all states agree they are descendible.
Fee simple subject to executory interest
fee simple estate that terminates upon the happening of a stated event and then passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate. third party holds an executory interest.
“to A but if x event occurs, then to B”
restraints on alienation
Restraints on alienation are void if they are absolute. Must be linked to a reasonable amount of time and limited purpose.
Life estate
Measured by the life or lives of one or more persons.
“To A for life.” compare “To a for 50 years.” The time limit creates a leasehold, not a life estate.
Grantor has a reversion unless they stipulate “then to B.”
Life estate per autre vie
Measures by a life other than the grantee’s “To A for the life of B”
Also created when the life tenant conveys their life to another. If A conveys their life interest to B, B has a life estate for the life of A.
grantor has a reversion interest. If the future interest is held by a third party, it is a remainder.
Life tenants rights and duties
Life tenant entitled to all ordinary uses and profits from the land.
They must not commit voluntary, permissive, or ameliorative waste. If a life tenant depletes natural resources this could constitute voluntary waste. They can take from the land when necessary for repair or maintenance, land only suitable for this use, or expressly or impliedly permitted by the grantor. Open mines doctrine- they can continue the activity but they’re limited to the mines already open.
Life tenant must preserve land and structures in a reasonable state of repair. Pay ordinary taxes on land. Pay interest on mortgages and pay special assessments for public improvements of short duration.
Life tenant not required to insure the premises for the benefit of remaindermen and not responsible for damages caused by third-party tortfeasor.
Ameliorative waste- life tenancy
Life tenant cannot engage in acts that will enhance property value unless all future interest holders are known and consent.
Exceptions that allow a life tenant to alter or demolish existing buildings
- market value of future interests is not diminished and either
- remaindermen do not object or
- a substantial and permanent change in neighborhood conditions has deprived property in current form of reasonable productivity or usefulness.
Remainder
Future interest in a third person that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate and it cannot follow a time gap after the preceding estate. Must be expressly created in instrument creating the preceding possessory interest.
Contingent remainder
- created in unborn or unascertained persons or
- subject to a condition precedent
“To A for life then to B’s heirs” or “To A for life, then to B’s children”
A condition is precedent if it must be satisfied before the remainderman has a right to possession. “to A for life, then if B graduates from college, to B”
Vested remainder
Remainder created in an existing and ascertained person, not subject to a condition precedent. Three types:
- indefeasibly vested remainder
- vested remainder subject to total divestment
- vested remainder subject to open
indefeasibly vested remainder
A vested remainder that is not subject to divestment or diminution. holder is certain to acquire an estate in the future with no strings or conditions attached.
“To A for life, remainder to B” (B is alive)
