Present Possessory Estates Flashcards
1
Q
Identifying Present Possessory Estates
A
- A present possessory estate is an interest that gives the holder the right to present possession. We’re concerned here w/ 3 categories of present possessory freehold estates:
(1) Fee simple absolute
(2)Defeasible fee (of which there are three types)
(3) Life estate - Note: Additional present estates, such as concurrent & leasehold estates, are considered in the Multistate Real
Property materials. - The examiners will expect you to know 3 things w/ respect to each of these estates:
(1) What language will create the estate?
(2) Once identified, what are the estate’s distinguishing characteristics? In other words, is the estate devisable, meaning, can it pass by will? Is the estate descendible, meaning, will it pass by the statutes of intestacy if its holder dies intestate (without a will)? Is the estate alienable, meaning, is it transferable inter vivos, or during the holder’s lifetime?
(3) Which future interests, if any, is the estate capable of?
2
Q
Fee Simple Absolute: How Created
A
- “To A” or “To A & his heirs.”
- Today, a fee simple is presumed in the absence of express contrary intent (CL words “& his heirs” are not necessary).
- Thus, “to A” is sufficient to create fee simple absolute.
3
Q
Distinguishing Characteristics
A
- A fee simple absolute is absolute ownership of indefinite/potentially infinite duration.
- It’s freely transferable, devisable by will, & descendible through intestacy.
4
Q
Accompanying Future Interest: Defeasible Fees
A
- Defeasible fees are fee simple estates (they are of
uncertain/potentially infinite duration) that can be terminated upon the happening of a stated event. - You can think of the defeasible fees as 3 types of fee simple (“to A”) with a catch (a condition attached) that renders the estate subject to the risk of forfeiture.
- In other words, to be defeasible means to be capable of forfeiture.
5
Q
Fee Simple Determinable (and Possibility of
Reverter)
A
- A fee simple determinable terminates upon happening of a stated event & automatically reverts to grantor
6
Q
Tip
A
Remember that statements of motive/purpose do not create a determinable fee. To create a fee simple determinable, words limiting the duration of the estate must be used. Watch for grants such as “for the purpose of” & “to be used for”; they are merely expressions of motive
7
Q
Fee Simple Determinable (and Possibility of
Reverter): How Created
A
- A fee simple determinable is created by durational language, such as “to A for so long as…,” “to A while…,” “to A during…,” or “to A until….”
8
Q
Distinguishing Characteristics
A
- The fee simple determinable, like all of the defeasible fees, is transferable, devisable by will, & descendible through intestacy, but always subject to the attached condition.
- Thus, a fee simple determinable can be conveyed, but the grantee takes subject to the estate’s being terminated by the specified event.
- Remember, if the stated condition is violated, forfeiture is automatic
9
Q
Accompanying Future Interest in Grantor—Possibility
of Reverter
A
- Recall that one of the distinguishing characteristics of a fee simple determinable is that the estate automatically reverts back to the grantor upon the happening of the stated event.
- That reversionary future interest in the grantor is called a possibility of reverter.
- Whenever a grantor conveys a fee simple determinable, they automatically retain a possibility of reverter.
- A possibility of reverter is transferable, devisable by
will, & descendible by intestacy. - To remember: F S D P O R
10
Q
Fee Simple Subject to Condition Subsequent
(and Right of Entry)
A
- A fee simple subject to a condition subsequent is an estate in which grantor reserves right to terminate the estate upon happening of a stated event, meaning the estate doesn’t automatically terminate—grantor must take some action.
11
Q
Fee Simple Subject to Condition Subsequent
(and Right of Entry): How created
A
- Look for 2 main ingredients: (1) the use of conditional words, such as “upon condition that,” “provided that,” “but if,” & “if it happens that,” & (2) an explicit statement of the grantor’s right to re-enter.
- Thus, a grant such as “to A, but if X event occurs, grantor reserves the right to re-enter & retake” creates a fee simple subject to a condition subsequent in A & a right of entry in the grantor.
- We have conditional words (“but if…”) as well as an explicit statement of the grantor’s right to re-enter (“grantor reserves the right to re-enter and retake”).
12
Q
Distinguishing Characteristics
A
- Unlike the fee simple determinable, the fee simple subject to condition subsequent is not automatically terminated if the stated condition occurs.
- The occurrence of the condition gives the grantor the right to cut the estate short at their prerogative.
- So, to distinguish the fee simple subject to condition subsequent on the exam, remember: “it’s my prerogative.” The grantor may choose to terminate—or not—if the condition occurs.
13
Q
Accompanying Future Interest in Grantor—Right of
Entry
A
- As noted above, a right of entry (also called a power of termination) must be expressly reserved; in contrast with a possibility of reverter, it doesn’t arise automatically.
- Most cts hold that rights of entry are not transferable inter vivos, but most states agree they are devisable by will, and all states agree they are descendible through intestacy.
14
Q
Tip
A
A conveyance that contains both durational language and a power of termination will likely be construed as creating a fee simple subject to a condition subsequent, because the forfeiture is optional at grantor’s election rather than automatic. Policy disfavors forfeiture of estates.
15
Q
Fee Simple Subject to an Executory Interest
A
- If a fee simple estate terminates upon happening of a stated event (b/c it is determinable/subject to a condition subsequent) & then passes to 3rd party rather than reverting to grantor/giving grantor a right to terminate, 3rd party has an executory interest.
