Present Estates and Future Interests

Question 1

Defns
fee
defeasible

reversion
reverter
remainder
vest

determinable vs. subject to condition subsequent: about AUTOMATIC vs. NOT AUTOMATIC
executory interest VS remainder: about CUTTING SHORT ARTIFICIALLY/EXPIRING NATURALLY

Answer 1

“fee” = highest form of ownership - irrevocable

“defeasible” = forfeitable, divestible, diminishable for the current holder…but it also may continue forever OR end upon an event

“reversion” = future interest left with the Owner when Owner conveys a LESSER estate than Owner owns… e.g. life estate bounces back to O who orig had fee simple

“reverter” future interest follows due to failure of condition terminating grantee’s estate… estate bounces back to owner

“remainder” future interest following life estate holder…then after dying or X Years, going to 3P: remainder can ONLY follow life estate OR LEASE…future interest created in a transferee that is capable of taking in possession on the natural termination of the preceding estate

“vest” for future interest to BECOME CERTAIN (yet vested party upon vesting is still waiting to take possession), and no longer depending on any conditions to occur or UNascertained persons to exist

vested REMAINDER… is a remainder created in an EXISTING, ASCERTAINED PERSON, and NOT SUBJECT to CONDITION PRECEDENT
* and if subject to diminution i.e. the class may grow, it is vested remainder subject to open…
* and if subject to defeat by a condition subsequent (subseqent to the original conveyance, like “O to my daughter for life, then to my kids, but if my daughter quits painting, then to my brother (not my kids)” then vested remainder subject to total divestment

remember executory is rude, interrupting, remainder is polite waiting, never interrupting

“determinable” = upon event, estate termination will occur automatically, no active action needed

CF.

“subject to condition subsequent” = upon event, another transfer will occur ONLY if active action needed, NOT automatic is taken

think of VESTING then later POSSESSION

executory interest: CONDITION being met (RUDE, INTERRUPTING)
immediately makes FI vest
and
immediately makes FI possesory
* condition being met immediately makes its previously-future interest POSSESSORY i.e. present
* immediately CUTTING the preceding interest short

CF.

contingent remainder: (POLITE, WAITS!) CONDITION being met
immediately makes FI vest,
BUT
not yet possessory
* condition being met immediately merely VESTS the remainder
* does NOT immediately become possessory i.e. does not cut preceding interest short…
* WAITS for preceding interest to naturally terminate THEN becomes POSSESSORY

Question 2

Fee Simple Absolute

Answer 2

Conveyance Language
e.g. “Owner to A and her heirs”
[and her heirs is inoperable b/c a living person has NO heirs, only prospective heirs]
e.g. “Owner to A”
e.g. “Owner to A for the purpose of”
e.g. “Owner to A to be used for”
[don’t be fooled by NON-event language like this, nor “desire” language]

Present Interest in Transferee
Transferee A has fee simple absolute, heirs have nothing
Transferee A can convey, divide, devise, descend

attempted restraints on alienation of FSA are VOID

Future Interest in Owner
n/a

Future Interest in Transferee
n/a

Future Interest in Third Party
n/a

Question 3

(Defeasible) Fee Simple, Determinable, With Possibility of Reverter

FI AUTOMATIC back to OWNER

Answer 3

Conveyance Language
Owner to A + Enduring Condition [SILENCE on WHAT HAPPENS if the Enduring Condition ends]
* so long as XYZ
* as long as XYZ
* during XYZ
* while XYZ
* unless XYZ
* until XYZ
e.g. “Owner to A so long as the property is used as a hospital”
[Note: if Enduring Condition ends, the reverter to Owner occurs **AUTOMATICALLY **even though language is silent (cf. FSSCS)

Present Interest in Transferee
Transferee A has potentially infinite present possessory interest in FSDwPR
Transferee A can convey (in most juris), devise, descend to B subject to same Enduring Condition
(but if Enduring Condition ends, property STILL reverts to Owner DESPITE the A convey/devise/descend to B)

Future Interest in Owner
Owner retains Possibility of Reverter
O can convey, devise, descend
Vested
Not subject to RAP

(but if Enduring Condition ends, property STILL reverts to Owner DESPITE the A convey/devise/descend to B)

Future Interest in Transferee
n/a

Future Interest in Third Party
n/a

Question 4

(Defeasible) Fee Simple, Subject to Condition Subsequent

NOT AUTOMATIC

Not subject to RAP

Answer 4

Conveyance Language
Owner to A + Event [language describing Owner’s RIGHT TO REENTRY aka RIGHT to TERMINATION]
* upon condition that XYZ then..
(careful: upon xyz DEATH means it is life estate)
* but if XYZ then…
* provided that XYZ then…
* if it happens that XYZ then…
* if, however XYZ then…
* however, if XYZ then…

[Owner expressly reserves right to owner’s re-entry aka right to termination upon event]

e.g. “Owner to A so long as the property is used as a hospital, AND then owner may re-enter or terminate”

[Note: if “Event” is triggered, what follows is NOT AUTOMATIC (cf. FSDwPR). Owner here reserves right, but after Event is triggered…Owner (or subsequent holder of interest!) must then affirmatively exercise the right to reentry aka right to terminate]

Present Interest in Transferee
Transferee A has potentially infinite present possessory interest in FSSCS

Transferee A can convey, divide, devise, descend

Future Interest in Owner
Owner Retains Right of Entry aka Right to Termination but must reserve and exercise
* O can devise, descend, and some courts allow convey
* Vested
* Not subject to RAP

Owner can waive right of entry (but not via inaction)

If Event occurs, Transferee A still keeps interest UNTIL Owner exercises right to re-entry aka right to termination

(yes weird that the future interest is not in the name)

Future Interest in Transferee
n/a

Future Interest in Third Party
n/a

[if language mix enduring duration language and power of termination language, construe toward FSSCS not FSDwPoR. Policy disfavors forfeiture and FSDwPoR creates automatic forfeiture.]

Question 5

O to school “if School uses Blackacre only to teach children 5 to 13.”

Answer 5

“if”
is not quite a fee simple determinable, because it is not durational and suggests a condition

and

is not quite fee simple subject to condition subsequent, because it lacks express “right of reentry” or “terminate” langauge

Therefore, you should play out both FSD and FS subject to condition subsequent, but you should say “the policy of the courts is to avoid automatic forfeiture” therefore** favor FS subject to condition subsequent which lacks power of termination” therefore FEE SIMPLE ABSOLUTE with school

Question 6

(Defeasible) Fee Simple, Subject to Executory Limitation: Shifting or Springing

Future Interest to 3P

Answer 6

Conveyance Language
Owner to A + Event 1 (and maybe Event 2) [language describing route to transfer to 3P]
* but if XYZ then…
* on the condition that XYZ then…
* provided that XYZ then…
* if it happens that XYZ then…
* if, however XYZ then…
* however, if XYZ then…

Two styles:

Shifting: transfer from A to 3P immediately upon Event 1
e.g. “Owner to A but if the property is ever used as a residence, then to B”

Springing (possible GAP i.e.PoR): revert from A back to Owner upon Event 1…but later upon Event 2, transfer from Owner to 3P immediately
e.g. “Owner to A but if the property is ever used as a residence, then to B when B gets married”

Present Interest in Transferee
Transferee A has fee simple subject to executory limitation

Transferee A can convey, divide, devise, descend

Future Interest in Owner
Springing Only: Owner retains Possibility of Reverter
* O can convey, devise, descend
* Vested
Not subject to RAP (but sprining EI in third party future is subject to RAP!)

Future Interest in Transferee
n/a

Future Interest in Third Party
3P has shifting executory interest
or
springing executory interest

3P can convey, divide, devise, descend

RAP applies! Often invalidates

Question 7

testator O to H for life, then to my surviving children

Answer 7

“surviving” is ambiguous

surviving O?
or
surviving H?

resolve this ambiguity by construing “surviving” as referring to distribution i.e. surviving H

Question 8

Life Estate with Reversion aka Traditional

Answer 8

Conveyance Language
“Owner to A for life” :

(after A dies, ownership COMES BACK to owner by reversion (default), at which time it becomes fee simple absolute – present and future interest collapse again) (implied “…then to owner”)

Present Interest in Transferee
Transferee A has life estate,
can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
* Not subject to RAP

Future Interest in Transferee
n/a

Future Interest in Third Party
n/a

Question 9

Life Estate with Remainder

Answer 9

Conveyance Language
“Owner to A for life, then to B”

(after A dies, ownership goes to B in fee simple absolute)

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
Transferee A has life estate,

can convey, cannot devise or descend

Future Interest in Owner

Future Interest in Transferee

Future Interest in Third Party
3P B has remainder
Can convey, devise, descend

Vested (not Subject to RAP)
OR
Contingent (subject to RAP)

Question 10

Life Estate Determinable

Answer 10

Conveyance Language
“Owner to A for life, or until she remarries”

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
Transferee A has life estate determinable,

can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
* Not subject to RAP

and

Owner retains possibility of reverter

Future Interest in Transferee

Future Interest in Third Party

Question 11

Life Estate Pur Autre Via (Transferee holds, but “life” is measured by Other Party lifespan)

Answer 11

Conveyance Language
“Owner to A for the life of B”

Present Interest in Transferee
Transferee A has estate for duration of life of Other Party B, and A loses estate when Other Party B dies

Other Party B has nothing

Can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
Not subject to RAP

Future Interest in Transferee

Future Interest in Third Party

Question 12

Life Estate Pur Autre Via (Other Party holds estate but “life” is measured by Transferee lifespan)

Answer 12

Conveyance Language
“Owner to A for life”

[and then A conveys her life estate to B]

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
Other Party B has estate for duration of life of Transferee A, and B loses estate when A dies

Transferee can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
Not subject to RAP

Future Interest in Transferee

Future Interest in Third Party

Question 13

Life Estate Implied

Answer 13

Conveyance Language
“Owner to B after the death of my spouse A”

(timing is attached to duration of someone’s life without saying “for life”)

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
A has life estate

Can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
Not subject to RAP

Future Interest in Transferee

Future Interest in Third Party
3P B has remainder

Can convey, devise, descend

Vested (not Subject to RAP)
OR
Contingent (subject to RAP

Question 14

Life Estate with Indefeasibly Vested Remainder

Answer 14

Conveyance Language
To A for the life of B, remainder to C

[remainderman known
AND
all conditions for taking
satisfied]

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
A has life estate for life of B

Can convey, cannot devise or descend

Future Interest in Owner

Future Interest in Transferee

Future Interest in Third Party
3P C has remainder

Can convey, devise, descend

Vested (not Subject to RAP)

Question 15

Life Estate with Vested Remainder Subject to Open

Answer 15

Conveyance Language
To A for her life, remainder to B’s children.

At the time of the conveyance, B is
alive and has one child, C.

[remainder given to an OPEN CLASS
AND
at least one class member has satisfied all conditions of taking]

note “class closing rule” when any member of the class becomes entitled to the distrib, the class closes (ie no subsequent AFTERBORNS join the class!)

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
A has life estate

Can convey, cannot devise or descend

Future Interest in Owner

Future Interest in Transferee

Future Interest in Third Party
3P B’s children have remainder

Can convey, devise, descend

Subject to RAP

Question 16

Life Estate with Vested Remainder Subject to Total Divestment (type of executory limitation)

Answer 16

Conveyance Language
To A for life, then to B, but if B should not reach the age of 21, to C.

[remainderman B is known
BUT
the taking of the remainderman B is subject to a condition subsequent (i.e., one that follows the grant to the remainderman and is separated from the grant by punctuation)]

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
A has life estate

Can convey, cannot devise or descend

Future Interest in Owner

Future Interest in Transferee

Future Interest in Third Party
3P B has remainder

Can convey, devise, descend

Vested (not Subject to RAP)

Question 17

Life Estate with Contingent Remainder

Answer 17

Conveyance Language
To A for life, remainder to B if B reaching 21 prior to A’s death

To A for life, remainder to B’s children. B has no children.

To A for life, remainder to A’s first child to reach the age of 21.” A is alive and has
two children, B, who is 20 and C who is 19.

remainder subject to a condition precedent that must…
be satisfied prior to vesting;
OR
the taker not in existence;
OR
the exact taker unknown

[note if “for 50 years” or “for life but no more than 10 years” you are looking at leasehold not life estate]

Present Interest in Transferee
A has life estate

Can convey, cannot devise or descend

Future Interest in Owner
Owner retains reversion
* O can convey, devise, descend
* Vested
Not subject to RAP

Future Interest in Transferee

Future Interest in Third Party
3P B has remainder

Can convey, devise, descend

Contingent (subject to RAP)

Question 18

Term of Years AKA Leasehold

Answer 18

Conveyance Language
Present Interest in Transferee
Future Interest in Owner
Future Interest in Transferee
Future Interest in Third Party

Question 19

Contingent (ie Unvested) Remainder (future interest presently held by transferee, NOT owner)

NOT EXISTING, OR UnASCERTAINED PERSON, OR SUBJECT to CONDITION PRECEDENT

Answer 19

(after prior taker of term of years OR life estate only)

Subject to RAP

Interest capable of creation in “remainderman” (not in O) upon expiration of preceding, finite, estate

Remainderman profile:
* Tagalong on prior taker - never travels alone
* Polite
* Never “cuts short” the prior taker i.e. never with “defeasible fee simple”

Remainderman is currently unascertainable/unborn
e.g. Owner to A for life, then to A’s children. [A is alive and A has no children]
e.g. “Owner to A for life, then to B’s first child”
e.g. “Owner to A for life, then to B’s heirs”
e.g. “Owner to A for life, then to those children of B who survive A”

OR
Remainderman is currently ascertainable/unborn BUT subject to NOT YET MET condition PRECEDENT aka prerequisite
e.g. “Owner to A for life, then if B graduates from college, to B”
[if B graduates before A dies, B has “indefeasibly vested remainder”]

Common Law had doctrines did NOT like contingent remainder - never correct answer!

Question 20

Vested Remainder (3 types) (future interest presently held by transferee, NOT owner)

is a remainder created in an EXISTING, ASCERTAINED PERSON, and NOT SUBJECT to CONDITION PRECEDENT

Answer 20

(3 types of Vests)
(typically after prior taker of term of years OR life estate only)

Interest capable of creation in “remainderman” (not in O) upon expiration of preceding, finite, estate

Remainderman profile:
* Tagalong on prior taker - never travels alone
Polite
* Never “cuts short” the prior taker i.e. never with “defeasible fee simple”

Remainderman is NOT CONTINGENT: currently ascertainable, not subject to condition PRECEDENT

Indefeasibly Vested Remainder: certain to acquire, no strings

Vested Remainder Subject to Total Divestment aka Subject to Complete Defeasance aka Subject to Condition subsequent

Vested Remainder Subject to Open (subject to RAP!)

○ The vested remainder is created in and shared among a class of persons (e.g. “children”) certain to become possessory but subject to diminution as the class grows

○ Common Law Rule of Convenience: Class goes from Open to Closed when an existing member could “demand possession”
e.g. “To A for life, then to B’s children.” <–once A dies, or B dies), at that point B’s children alive (or gestating in B) “can demand possession” ∴ CLASS IS CLOSED at that point

Question 21

Executory Interest (2 types) (not a remainder) (future interest presently held by transferee, NOT owner)

Answer 21

Executory Interest profile:
* Rude, pounces, divests
* cutting short otherwise limtliness
Benefiting from forfeiture of prior taker!

Shifting: (always follows defeasible fee) (subject to RAP!)
cuts short Prior Taker, NOT Owner

Springing:
cuts short Owner not prior taker (subject to RAP!)

Question 22

Possibility of Reverter (future interest in Owner/Grantor, not transferee)

Answer 22

Accompanies only Fee Simple Determinable

Question 23

Right of Re-entry aka Power of Termination (future interest in Owner/Grantor, not transferee)

Answer 23

Accompanies only Fee Simple Subject to Condition Subsequent

Question 24

Reversion (like catch-all) (future interest in Owner/Grantor, not transferee)

Answer 24

Accompanies when Owner conveys a lesser estate than what Owner currently holds
EXCEPT when Owner conveys a lesser estate than what Owner currently holds with Possibility of Reverter or Right of Re-entry

Question 25

RAP traditional

Answer 25

RULE AGAINT PERPETUITIES - it’s about VESTING

RAP is violated for a FUTURE INTEREST if “there is any possibility that the FUTURE INTEREST MIGHT VEST MORE THAN 21 YEARS after a measuring life alive at the time of the grant has DIED” <–careful…if the FI holder IS the measuring life then you have no RAP problem [e.g. the condition IS the measring life “for my first child to reach 25”]

…WHAT is vest? “vest” for future interest to BECOME CERTAIN (yet vested party upon vesting is still waiting to take possession), and no longer depending on any conditions to occur or UNascertained persons to exist

Most common violation of RAP: Executory Interest with time-unlimited condition of vesting:
e.g. “and if land ceases to be used”

FIRST
Identify applicable Future Interest <—-students OFTEN forget this step! (RAP never applies to Fee Simple, except FSEI)
Subject to RAP x4

1. Executory Interests: Shifting or Springing
2. Vested remainders subject to open (remainders never exist for (defeasible) fee simple, only for LE and LH)
3. Contingent remainders (remainders never exist for (defeasible) fee simple, only for LE and LH)
4. Rights of first refusal AKA option to purchase

[again if the mreasuring life IS the FI holder, you have no RAP problem]
[note charity TO charity FI are exempt ftom rap…not just to charity…must be charity to charity]

Not Subject to RAP - mainly owner stuff!
**

remainders NOT contingent NOR vested subject to open

reversions

possibilities of reverter

rights of entry i.e. (Defeasible) Fee Simple to Condition Subsequent!!*

Charity to charity

Option for purchase held by a current tenant

SECOND
Future Interest Trigger: What triggers must occur for that FI to take (death of life estate holder? birth of child? weird condition?

THIRD
Identify Measuring Lives:
aka LivesIn being
(existing and ascertainable), including grantor, right before Initial Conveyance
AND
part of the later Future Interest Trigger (e.g. “if B becomes vet, then to Q” <–B is the measuring life for Future Interest Trigger of Q’s FI”)

FOURTH
Imagine Initial Conveyance occurs

FIFTH
Right after the Initial Conveyance Occurs, KILL MEASURING LIVES

SIXTH

Over the following 21 years, will every FUTURE INTEREST definitely VEST or definitely NOT VEST?

examine FUTURE INTEREST INDIVIDUALLY
If yes, that interest survives RAP
IF no that future interest FAILS RAP [STRIKE THAT OFFENSIVE FUTURE INTEREST]

watch VESTING EVENTS that have possibly long windows
birth of after-born children (unborn as of conveyance) “then to A’s children who reach the age of 25”
relative survival: then to C if C survives B by 30 years.
education milestones: first to get phd
future marriages: then to D’s first grandchild to get married.
unpredictable 3P decisions: first of E’s grandchildren to become a lawyer

e.g. Owner”in fee simple to my friend, but if during my friend’s lifetime my son has children and those children are alive when my friend dies, then to said living children.”

FI: son’s children born during friend’s life which survive friend
FI trigger: death of friend
measuring life in being (being i.e. alive at time of initial conveyance from owner): friend
21 years after death of measuring life in being: 21 years after death of friend
At that point, do we know if FIs will all vest or not? Yes

Question 26

RAP reformed

Answer 26

Wait and See (don’t void the interest)
USRAP (same as traditional except 90 years rather than 21)
Cy Pres: court can redraft offending interest to a TRUST, redraft as near as possible to original charitable interest

Question 27

Life Tenant rights
Life Tenant duties

GENERAL

Answer 27

First separate Present Interest from Future Interest, regardless of owner’s life span

Purported Life tenant can REJECT or RENOUNCE life interest, in which case court may ACCELERATE future interest

Life tenant lasts for duration of life tenant’s lifespan or por autre lifespan

Holders of future interest DO have standing to sue for LIFE ESTATE WASTING.

• Life tenant has rights to all ordinary uses and profits
• Life tenant has duty not to damage future interest.
• Co-tenant has duty not to damage future interest.
• Lease tenant has duty not to damage future interest.

Question 28

Life Tenant duties

Affirmative Waste

Answer 28

Affirmative aka Voluntary Waste:

Conduct causing drop in value.

General:

LIfe tenant HAS DUTY NOT TO consume or exploit natural resources on property (timber, mineral, oil)

Exceptions
ok if necessary for maint/repair
OR
ok if expressly given consent
OR
ok if exploiting natural resource IS the only use
OR
ok if natural resource was already being used that way, even expansion of existing usage is OK….but to a LIMIT - no NEW mines/treecutting)

Question 29

Life Tenant duties

Duty Not to Commit Permissive Waste

Answer 29

Permissive Waste:

Life tenant has duty to maintain (excluding ordinary wear and tear) not neglect, not leave windows open in rainstorm, keep property in reasonable state.

LT DOES HAVE DUTY pay “certain carrying charges” e.g.
* interest on mortgage
* property taxes
* special assessment.

If LT is deriving income from the land, duty to pay tax on income from land.

If LT is not deriving income from the land, duty to pay tax on basis of fair rental value.

LT DOES NOT HAVE DUTY to pay principal on mortgage.

LT DOES NOT HAVE DUTY to insure for benefit of future interests.

LT DOES NOT HAVE DUTY to pay for harm by 3P tortfeasor

Question 30

Life Tenant duties

Duty Not to Commit Ameliorative Waste

Answer 30

Ameliorative Waste:

General Rule: LT breaches duty IF UNILATERALLY substantially changing use of property EVEN IF value of property increases

Exception 1
Future interests consent to substantial change (usually sentimental stuff) of property
AND
Market value of future interests is not diminished by the substantial change of property

Exception 2
Neighborhood itself undergoes substantial changes, or property itself undergoes substantial change (e.g. a shed on the property is very unfit for usage) such that property’s existing use would be unproductive, obsolete without substantial change of property (e.g. demolition of shed)

Question 31

Devising and Descending present possessory life estates

Answer 31

pattern - the LT just cannot do either…only convey intervivos