Present Estates & Future Interests Flashcards
Types of Interests
. Estates in land are possessory interests either now or in the future
. Freeholds: give possession under some legal title or right to hold- fess or life estates
. Nonfreeholds: mere possession- leases
. Possessory: estates in land
. Nonpossessory: easements, profits, covenants and servitudes
Present Possessory Estates, Types:
Fee Simple Absolute
Defeasible Fees:
1. Fee Simple Determinable
2. Fee Simple Subject to Condition Subsequent
3. Fee Simple to an Executory Interest
Life Estate
PPE: Fee Simple Absolute
. To A or To A and heirs
. Limitless duration- forever
. Devisable, descendible, alienable
. Trick question: future interest: A is alive- his heirs have nothing, a living person has no heirs
PPE: DF: Fee Simple Determinable
. Created: To A & his heirs for so long as…[ or until…while…during]
. Terminates automatically on stated event, forfeited by owner
. Devisable, descendible, alienable
. ALWAYS SUBJECT TO CONDITION
. Future Interest: Possibility of Reverter to grantor
. FSDPOR: Frank Sinatra Didn’t Prefer Orville Redenbacher – Fee simple determinable possibility of reverter
PPE: DF: Fee Simple Subject to Condition Subsequent
. Conditional Language: To A & his heirs, but if…[upon condition…provided that]
. Right of Entry: Reserves the right to terminate the estate upon the happening of the stated event, grantor must take some action
. Future Interest: Grantor has right of entry or power of termination
. Exam Tip: sloppy drafting, on fee simple determinable/condition subsequent- when in doubt, use condition subsequent- courts abhor automatic forfeitures and will err when in doubt
PPE: DF: Fee Simple to an Executory Interest
. Created: To A & his heirs for so long as…and if not…, then to B
. Same as Fee Simple Determinable, but if the condition occurs, it is automatically forfeited in favor of someone other than the grantor
. Future Interest: shifting executory interest to third party
Defeasible Fees Overview
. Words of hope, desire or intention do not create a defeasible fee: will find a fee simple, require clear durational language, not: for purpose of constructing, with the hope of, with the expectation *EXAM QUESTIONS
. **Absolute restraints on alienation are void: conditions that restrict the transferee’s ability to transfer without a reasonable time-limited purpose- Not ok: to A as long as she never sells, OK: to A so long as she does not sell until year ___ when the clouds on title are resolved
. Limitation Violating PP are Void: if purpose is to penalize marriage or encourage divorce it will be struck down, if purpose is to give support until marriage or in case of divorce it will be upheld
Life Estate
. Measured by the life of one or more person, life tenant
. Language: To A for life
. Leasehold interest: to A for life but not past 10 years, of to A for 5 years- not life estate
. Life Estate Pur Autre Vie: life of another, measured by the life of another- to A for the life of B
. Future Interest: reverter at end of life- if held by grantor- reversion, if held by 3rd party: remainder
. Tenant’s Rights and Duties:
. tenant gets all ordinary uses and profits in land
. Waste: can be liable to future interests
Waste: Types
1) Voluntary: actual overt conduct that causes drop in value
. Natural Resources: tenant depleting resources could constitute waste, but is allowed when it is necessary for the repair or maintenance of the land 2) land is only suitable for such use-peach trees, or 3) expressly allowed
. Open Mines Doctrine: if mining was done prior to LE, tenant can continue mining *Limited to mines already open
2) Permissive: failure to take reasonable measures to protect land- neglect
. Duty to preserve land in reasonable state of repair
. Pay ordinary taxes- limited to total income or profits generated from land (if no profit- based on fair rental value)
. Pay interest on mortgages- not principal, and
. Pay special assessments for public improvements of short duration- long duration are split between current and future interest holder
. Not obliged to insure the premises and will not be liable for damages by 3rd party tortfeasor
3) Ameliorative: unilateral change that enhances value: prohibited unless, future interest holders consent bc of sentimental value. Tenant may alter or demolish buildings if: market value is not diminished, remaindermen do not object or substantial and permanent change in neighborhood conditions- e.g. 90% industrial
Wisconsin: Life Estates by Marital Right
. Community property, each spouse owns a present undivided ½ interest- when one spouse dies, the other merely retains ownership of individual ½ interest in every item of marital property
Future Interests: Types
Grantor:
1. Possibility of Reverter
2. Right of Entry
3. Reversion
Transferees/3rd parties
1. Contingent Remainder
2. Vested Remainder
3. Executory Interest
Future Interests in Grantor
- Possibility of Reverter
. Accompanies fee simple determinable - Right of Entry/Power of Termination
. Accompanies fee simple subject to condition subsequent
. Does not compel entry - Reversion
. Accompanies when grantor conveys estate of lessor duration- other than above
. Example: Holder of fee simple absolute conveys to A for life, 99 years, to A for 99 years then B for life
Future Interests in Transferees: Rules
. Becomes possessory on natural expiration of preceding estate
. On Exam: usually life estate to A for term of years, then to B
. B is the remainderman, future interest that travels with the life estate- never travels alone
. Remaindermen’s are patient, do not assume possession based of forfeiture, or take early
. Remaindermen’s wait for natural end date
Transferability of Remainers & Executory Interest
. Vested remainders are fully transferable, descendible by intestacy, and devisable by will
. CL: held most interests were not transferrable inter vivos, but most courts today allow
FI in Transferees: Contingent Remainder
. Contingent if:
a) Unborn or Unascertained: Language: To A for life, then to B’s first child- A is alive and B does not have children yet;
To A for life then B’s heirs (remainder is contingent on B’s death and what the heirs will be at that time);
To A for life then to those children of B who survive A- cannot know at this time who they are
b) Subject to Condition Precedent: condition that must be met before remainderman can take possession;
Language: To A for life, then if B graduates from college- he has not done so yet, if graduates changes to indivisible vested remainder
To A for life then to B and his heirs if B marries C
Alternative Contingent Remainder: To A for life then to B if B marries C, otherwise to D
. Technical Rules of CL: law does not life these bc of uncertainty, so they made rules to limit: Rule in Shelly’s Case, Doctrine of Worthier Title, and Destructibility of Contingent Remainers: just know these are abolished- used as wrong answer choices
FI in Transferees: Vested Remainder
. Created in existing and ascertained person, and is not subject to condition precedent
. Types of vests:
a) Indefeasibly vested remainder: certain to acquire estate in future with no strings-
Language: To A for life, remainder to B- both alive- no strings or conditions attached, if B predeceases A future interest passes by will or intestacy
b) Vested remainder subject to total divestment (complete defeasance): subject to forfeiture of estate if condition subsequent- Comma Rule: appears after language that, alone and set off by commas, creates a remainder
Language: To A for life, then to B and his heirs, but if B dies unmarried, then to C and his heirs
c) Vested remainder subject to open: created in a class of persons that is certain to become possessory, but is subject to diminution- e.g. the addition of people in the class- children
Language: to A for life, then to B’s children
Class Gifts: Class is group of people having a common characteristic- children, nephews- share is determinable by # in class
Class Closes: Open when still possible for people to join in, apply rule of convenience- class closes and no others become eligible, whenever some member could demand possession/distribution e.g. To A for life then B’s Children- B has 2 children- when does class close- at A or B’s death A- children could take, B- no more children possible
Womb Rule: person in womb is part of group if it closes while they are in the womb
Survival: goes to devisees or heirs unless survival was a condition to take
