Present Estates /// Future Interests Flashcards
Present Estates
(Definition & Types)
Present Estates = an estate is a freehold if it is immobile and for indefinite duration.
Types of Present Estates
- Fee simple absolute
- Defeasible fee
- Life estate
Fee Simple Absolute
Definition: absolute ownership of a potentially unlimited duration; freely alienable.
Language: “to A;” “to A and his heirs.
Defeasible Fee
Definition + Types of Defeasible Fees
Definition: potentially infinite duration subject to termination by the occurrence of an event; alienable, devisable, descendable.
Types
- Fee simple determinable
- Fee simple subject to condition subsequent
- Fee simple subject to executory interest/limitation
Fee Simple Determinable
Definition: a type of defeasible fee characterized by:
- Limited specific durational language (e.g., “so long as,” “while,” “during,” “until”)
- Terminates grantee’s interest upon occurrence of event.
- Future Interest: grantor (or his successor in interest) retains possibility of reverter.
Fee Simple Subject to Condition Subsequent
FSSCS = An estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event; the estate doesn’t automatically terminate—the grantor must take some action.
- Right of Entry = power of termination.
- Alienable, descendible, devisable.
Life Estate
Definition, Characteristics, Rights/Duties
Definition: present possessory estate fully transferable during measuring life.
Language: “to A for life,” “to B after the life of A,” or “to B for the life of C” (pur autre vie); “to A for life, but if he drinks, then to B” (defeasible).
Rights and Duties of Life Tenant:
* Right to possess
* Right to collect rents, lease/sell/mortgage
* Duty not to commit waste
Waste
General Definitions & Types
Waste = limits the rights of a holder of life estate.
Types:
1. Affirmative
2. Permissive
3. Ameliorative
Affirmative Waste
Occurs when overt conduct results in a decrease in property value
- Holder of a VEST future interest: may bring suit against LT for damages.
- Holder of ANY future interest: may bring suit against LT for injunction.
Exception: exploitation of natural resources is NOT waste if:
1. authorized by the grantor,
2. in effect when the tenancy began, OR
3. necessary to maintain property.
Permissive Waste
Permissive Waste = occurs when LT permits the premises to deteriorate through neglect, failure to preserve, or a failure to reasonably protect the property.
- LT must make reasonable repairs (up to amount of income produced by property or, if LT is in actual possession, the fair rental value).
Ameliorative Waste
Ameliorative Waste = occurs when a change in use of the property increases its value..
- LT may alter structures on the property when a substantial and permanent change in the neighborhood makes it necessary in order to continue reasonable use of the property (so long as overall value is not diminished).
Future Interests
Definition + Types
Future Interests = a present, legally protected right in property that gives its holder the right or possibility of future possession of an estate.
If a future interest is held by a transferor, it must be:
1. A possibility of reverter,
2. A right of entry; or
3. A reversion.
If a future interest is held by someone other than the transferor, it must be:
1. A contingent remainder,
2. A vested remainder (3 types), or
3. An executory interest
Reversion
Reversion = a “taking back” of ownership that happens in the future based on certain conditions or events.
* A reverter allows the grantor to regain control and possession of the property after a condition occurs.
- Not subject to RAP.
- Alienable, devisable, descendable
Possibility of Reverter
Possibility of Reverter = a future interest retained by a grantor when a FSD is conveyed.
- alienable, devisable, descendible
Right of Reentry
Right of Reentry = a FI retained by the grantor after a ffee simple subject to condition subsequen is granted.
- Transfer: no inter vivos transfer permitted under common law, however some states permit.
- Devisable and descendible.
Remainder
Definition, Vested, Contingent
Remainder = a FI that becomes possessory upon the natural expirtation (death) of a prior estate that is created in the same conveyance in which the remainder is created.
- Example - “to A for life, then to B’s first born son.”
Vested Remainder Subject to Open (Class Gifts)
Class Gifts = group of unspecified persons whose number, identity, and share of the interest is to be deterimined in the future.
Rule of Convenience = the class is closed when any class member is entitled to immediate possession.
* If at least one class member is qualified to take possession at the time of the conveyance (but less than all of them), each class member’s share is subject to partial diminution because additional takers not yet ascertained can still vest.
* Once a class closes, any person who might otherwise have become a class member cannot claim an interest in the property as a class member
Vested Remainder Subject to Complete Divestment
A vested remainder whereby the occurrence of a condition subsequent will divest the remainder.
Example: Let’s say there is a trust created by Tom, and he designates his niece, Lisa, as the current beneficiary of the trust. The trust states that upon Lisa’s death, the remaining assets will go to her children, if she has any. However, if Lisa does not have any children, then the assets will pass to Tom’s nephew, David.
In this example, David has a vested remainder subject to complete divestment. The remainder is vested because it is certain that if Lisa dies, and she has children, they will receive the assets. However, it is subject to complete divestment because if Lisa does not have any children, David will receive the assets instead, completely divesting any claim that Lisa’s hypothetical children might have had.
Contingent Remainder
Contingent Remainder = a remainder is contingent if:
- It is created in unborn or unascertained parties (e.g., “to A for life, then to B’s first born son”), OR
- It is subject to a condition precedent (e.g., “to A for life, then to B upon completion of medical school.”)
Note: a remainder can be contingent as to a person or an event.
Executory Interests
Executory Interest = an FI in a third party (NOT a remainder) that cuts the prior estate short upon the occurrence of a specified condition.
Shifting Executory Interest
Shifting Executory Interest = cuts short a prior estate created in the same conveyance; the estate shits from one grantee to another upon the occurrence of a condition.
- Transferable and subject to RAP
- Example: “To A, but if B returns from Angola, then to B and his heir.”
- B has shifting exec. interest
Springing Executory Interest
Springing Executory Interest = divests the grantor’s interest or fills a gap in possession in which the estate reverts to the prior grantor; cuts short interests of someone other than the grantor
- Example: “To A, if and when she becomes a lawyer” (A is in HS)
- A has springing exec. interest
- O has FS subject to A’s interest.
Vested Remainder
Vested Remainder = one create in an existing an ascertained person and not subject to a condition precedent.
Fee Simple Subject to an Executory Interest
FSSEI = = estate terminates upon the happening of a stated event (because it is determinable or subject to a condition subsequent) and then passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate, the third party has an executory interest.
Examples
* “To A and his heirs for so long as liquor is not sold on the premises; in that event, to B.”
* “Blackacre to XYZ Church, but if it is used for anything other than church purposes, then to B.”
Life Estate Pur Autre
Measured by a life other than the grantee’s.
- for example, “to A for the life of B.”
