Present Estates and Future Interests

Question 1

Fee Simple Absolute

Answer 1

“To A” or “To A and his heirs”

• presumed in the absence of express contrary intent
• absolute ownership of indefinite or potentially infinite duration
• freely transferable, devisable by will, and descendible through intestacy

Question 2

Fee Simple Determinable

Answer 2

Terminates upon happening of a stated event and AUTOMATICALLY REVERTS to grantor

• durational language (not motive or purpose)
• can be conveyed but grantee takes subject to specified event
• if stated condition violated, forfeiture is automatic and estate automatically reverts back to grantor

Possibility of reverter is transferable, devisable, and descendible

Question 3

Fee Simple subject to Condition Subsequent

Answer 3

Estate in which grantor reserves the right to terminate upon happening of stated event

• estate does not automatically terminate, grantor must take some action
• conditional words and explicit statement of right to re-enter

Accompanying future interest: right of entry. Not transferable inter vivos but devisable and descendable

Question 4

Fee Simple subject to an Executory Interest

Answer 4

terminates upon happening of stated event and then passes to a third party. Third party has an executory interest

Question 5

Rules for Defeasible Fees

Answer 5

1. Words of desire, hope, or intention do not create a defeasible fee
2. absolute restraints on alienation are void
3. conditions and limitations violating public policy are void

Question 6

Life Estate

Answer 6

Measured by the life or lives or one or more persons

Accompanying future interest:

• if held by O –> reversion
• if held by third party –> remainder

Question 7

Doctrine of Waste and Life Estates

Answer 7

Life tenant entitled to all ordinary uses and profits of the land, but must not commit waste

Exploitation of natural resources limited to situations when:

1. necessary for repair or maintenance of land
2. the land is suitable only for such use, or
3. its expressly or impliedly permitted by granor

Open mines doctrine - if mining was done on land prior to life estate, life tenant can continue mining but only he mines that are already open

Question 8

Future Interests in Transferor/Grantor - Reversionary Interests

Answer 8

1. Possibility of reverter (fee simple determinable)
2. Right of entry (fee simple subject to condition subsequent)
3. Reversions - transfers an estate of lesser duration than they started with (e.g., To A, for life)

Reversion:

• does not have to be expressly reserved
• transferable, devisable, inheritable
• holder can sue for waste and tortious damage to reversionary interest

Question 9

Future Interests in Transferees

Answer 9

Held by someone other than grantor

1. Contingent remainder
2. Vested remainder
3. Executory Interest

Question 10

Remainders

Answer 10

Note: a remainder is a future interest in a third person that can become possessory on the natural expiration of the preceding estate. Must be expressly created.

• always accompany a preceding estate of known, fixed duration
• never cuts short or divests the prior taker
• cannot follow fee simple estate which is of potential infinite duration

Question 11

Contingent Remainder

Answer 11

Remainder is contingent if:

1. created in unborn or unascertained persons, or
2. subject to condition precedent, or
3. both

IF “To A for life, remainder to A’s children who are 21” and condition is not met at time of death of preceding estate, property reverts to grantor, but A’s children have a springing executory interest

IF “To A for life, then to A’s heirs” A’s heirs have a contingent remainder

IF “To A for life, then to my heirs” grantor’s heirs have a contingent remainder

Question 12

Vested Remainders

Answer 12

One creating in an existing and ascertained person, and not subject to condition precedent

1. Indefeasibly Vested remainder - not subject to divestment or diminution. The holder of this remainder is certain to acquire an estate in the future with no strings or conditions attached
2. Vested remainder subject to total divestment - subject to condition subsequent/complete defeasance. Right to possession could be cut short because of condition subsequent
3. Vested remainder subject to open - remainder created in class of persons that is certain to become possessory, but is subject to diminution (e.g., by birth of additional persons)

Question 13

Executory Interests

Answer 13

Future interests in third parties that either divest a transferee’s preceding freehold estate, or follow a gap in possession or cut short a grantor’s estate

Shifting Executory Interest - always follows a defeasible fee and cuts short someone other than the grantor

Springing Executory Interest - cuts short the interest of O, the grantor