Present Estates & Future Interests

Question 1

What does devisable mean for estates?

Answer 1

Capable of being passed by will.

Question 2

What does descendible mean for an estate?

Answer 2

Capable of passing by intestacy.

Question 3

What does alienable mean for estates?

Answer 3

Capable of transfer inter vivos.

Question 4

What is a fee simple absolute? What kind of language is needed to create this?

Answer 4

This is absolute ownership of limitless duration. it is freely devisable, descendible, and alienable.
- “To A” or “To A and his heirs.”

Question 5

What are defeasible fees? What are the types?

Answer 5

Fee simples with a condition attached.
- NOTE: Defeasance = forfeiture.
TYPES:
- Fee Simple Determinable: A grant terminates upon the happening of a stated event and automatically reverts to the grantor after the occurrence of the prescribed event. (“for so long as,” “until,” “while,” “during”). It is devisable, descendible, and alienable.
- Fee Simple Subject to a Condition Subsequent: An estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event, meaning the estate doesn’t automatically terminate—the grantor must take some action (“but if,” “upon condition that,” “provided that”).
- Fee Simple Subject to an Executory Interest: A fee simple estate that terminates upon the happening of a stated event (because it is determinable or subject to a condition subsequent) and then automatically passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate (“to A for so long as . . . , and if not . . . , to B,” “to A, but if . . . , to B”).

Question 6

If a Fee Simple Determinable and Fee Simple Subject to a Condition Subsequent seem to be conflated, how should you handle it?

Answer 6

Construe in favor of the Fee Simple Subject to a Condition Subsequent because courts really don’t like automatic forfeitures.

Question 7

What type of interest always follows a fee simple determinable?

Answer 7

A possibility of reverter.

Question 8

What are the rules of construction for present estates and future interests?

Answer 8

• Words of mere desire, hope, and intention don’t create a defeasible fee.
• Absolute restraints on alienation (inter vivos) on alienation are void.

Question 9

What is a Life Estate?

Answer 9

A grant that is measured in lifetime terms (not in a term of years) (“To A for life”).
- The donee is a life tenant.

Question 10

What is a Life Estate Pur Autre Vie?

Answer 10

A life estate measured by a life other than the grantee’s.

Question 11

What are the rights and duties of a life tenant?

Answer 11

RIGHTS: A life tenant is entitled to the ordinary uses and profits from the land.
DUTIES: A life tenants is prohibited from committing waste, and future interest holders may bring an action to prevent or recover from waste that the life tenant has committed. The types of waste are voluntary waste, permissive waste, and ameliorative waste.

Question 12

What is Voluntary Waste of a life tenant?

Answer 12

Voluntary Waste: Actual overt conduct causing a drop in value. Exploitation of natural resources (EX: minerals) by a life tenant is generally limited to situations when: (1) it’s necessary for repair or maintenance of the land; (2) the land is suitable only for such use; or (3) it’s expressly or impliedly permitted by the grantor. Under the open mines doctrine, if mining was done on the land prior to the life estate, the life tenant can continue mining—but they’re limited to the mines already open.

Question 13

What is Permissive Waste of a life tenant?

Answer 13

Permissive Waste: Permissive waste occurs when a life tenant fails to comply with their duties, such as by allowing land to fall into disrepair or by failing to reasonably protect the land (negligence). Examples: Preserve the land and structures in a reasonable state of repair; Pay ordinary taxes on the land based on fair rental value (not FMV); Pay interest on mortgages (not principal); Pay special assessments for public improvements of short duration (improvements of long duration are apportioned
between the life tenant and future interest holder).

Question 14

What is Ameliorative Waste of a life tenant?

Answer 14

Ameliorative Waste: Unilateral change that benefits the property economically. The life tenant can’t engage in acts that will enhance the property’s value, unless all future interest holders are known and consent. Future interest holders can recover for reasonable expectations and sentimental value. Today, a life tenant may alter or even demolish existing buildings if: The market value of the future interests is not diminished; AND either (1) The remaindermen do not object; or (2) A substantial and permanent change in the neighborhood conditions (for example, change from residential to 90% industrial) has deprived the property in its current form of reasonable productivity or usefulness (problem of being obsolete).

Question 15

What is a Possibility of Reverter?

Answer 15

This is a future interest that accompanies the fee simple determinable.

Question 16

What is a Right of Entry / Power of Termination?

Answer 16

This is a future interest that accompanies the fee simple subject to a condition subsequent.

Question 17

What is a Reversion?

Answer 17

This is a future interest that arises in a grantor who conveys an estate of lesser duration (than what she started with).

Question 18

What is a Remainder Interest? How were these treated at common law vs. today?

Answer 18

An interest created in a third party which becomes possessory upon the natural expiration of the preceding estate (e.g., life estate or term of years).
- At common law, special doctrines were created to deal with the uncertainties of the remainder interests–these will sometimes be put as an answer choice.
- These common law doctrines have been abolished under modern law.

Question 19

What is a Contingent Remainder Interest?

Answer 19

A remainder interest is contingent when it is created in an as yet unascertainable taker OR the taker is ascertainable but has been subjected to and has not yet met a condition precedent to them taking.

Question 20

What is a Vested Remainder Interest? What are the types of Vested Remainder Interests?

Answer 20

A vested remainder is one created in an existing and ascertained person, and not subject to a condition precedent.
There are three types of vested remainders: (1) the indefeasibly vested remainder; (2) the vested remainder subject to total divestment (also known as the vested remainder subject to complete defeasance); and (3) the vested remainder subject to open.

Question 21

What is a condition precedent?

Answer 21

A condition is precedent if it must be satisfied before the remainderman has a right to possession.
- Appears before language introducing the remainderman.

Question 22

What is a condition subsequent?

Answer 22

A later stated event after the receipt of an interest that provides the grantor with a right to terminate the estate. When conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance.

Question 23

What does it mean when a remainder interest is indefeasibly vested?

Answer 23

The remainderman is certain to acquire the interest–no strings are attached.

Question 24

What does it mean when a remainder interest is vested subject to complete defeasance?

Answer 24

The remainderman will acquire the interest subject to a condition subsequent. Grantor or heirs will have a right of entry if the condition is triggered.

Question 25

What does it mean when a remainder interest is vested subject to open?

Answer 25

This is a vested remainder created in a class of persons (EX: “children”) that is certain to become possessory, but is subject to diminution (EX: by the birth of additional persons who will share in the remainder as a class).

Question 26

When does a class close for purposes of receiving a property interest? What exception(s) to the general rule exist?

Answer 26

Rule of Convenience: A class closes whenever some member of that class can demand possession.
- Womb Rule (Exception): Persons in gestation at the time the class closes are included in the class.

Question 27

What is an Executory Interest?

Answer 27

Executory interests are future interests in third parties that either divest a transferee’s preceding freehold estate (shifting interest holder) OR follow a gap in possession or cut short a grantor’s estate (springing interest holder).
- This interest cuts short a prior taker.

Question 28

What is the Rule Against Perpetuities?

Answer 28

Certain future interests are void if there’s any possibility that they might vest more than 21 years after a person (whose life and/or death is relevant to the prescribed condition’s occurrence) alive at the time of the grant has died.

Question 29

Technique for RAP analysis:

Answer 29

4-Step Technique:
(1) Determine the future interest: the Rule potentially applies only to contingent remainders, executory interests, and certain vested remainders subject to open. The Rule does not apply to any of the three future interests capable of creation in the grantor (the possibility of reverter, the right of entry, and the reversion), indefeasibly vested remainders, or vested remainders subject to total divestment.
(2) What has to happen for the future interest holder to take?
(3) Find the measuring life/lives:
(4) When will we know if the future interest holder can take? If longer than a life in being + 21, then the devise fails.

Question 30

How does the Rule Against Perpetuities affect an Executory Interest with no time limit on duration?

Answer 30

This violates the RAP and is a void devise.

Question 31

What are some ways in which the Rule Against Perpetuities has been reformed?

Answer 31

Wait and See: Validity determined per the facts as they actually come to be.
Uniform Statutory Rules Against Perpetuities (USRAP): Codifies the common law RAP and provides an alternative 90-year vesting period.
Cy Pres: The court can redraft “as near as possible” to the grantor’s intent.

Question 32

What are the types of restraints in property law?

Answer 32

Disabling: Absolute ban on transfer (VOID!).
Forfeiture: Attempted transfer forfeits interest (valid if reasonable/time limited).
Promissory: Attempted transfer breaches covenant (valid if reasonable/time limited).
Discriminatory: Based on race, religion, ethnicity (VOID).

Question 33

May a total restraint on alienation be placed on a life estate?

Answer 33

Yes. A complete restraint leading to forfeiture of the estate is a valid restraint on a life interest.