Present Possessory Estates Flashcards
What is a present possessory estate and what types are there
A present possessory estate is an interest that gives the holder the right to present possession
There are three types
1) Fee simple absolute
2) defeasible fee (three types)
3) life estate
Fee Simple Absolute
A fee simple absolute is absolute ownership of indefinite or potentially indefinite duration. It is freely transferable, devisable by will, and descendable through intestacy.
Language that create – “to A” “to A and his heirs”
A fee simple absolute is presumed unless there is an express contrary intent
NOTE – there are no accompanying future interests
What are defeasible fees and the different types
Defeasible fees are fee simple estates that can be terminated upon the happening of a stated event
There are three types
1) fee simple determinable
2) fee simple subject to a condition subsequent
3) Fee simple subject to an executory interest
Fee simple determinable
A fee determinable terminates upon the happening of a stated event and automatically reverts to the grantor. The grantor retains a future interest known as the possibility of reverter.
Language that create – “to A for so long as” “to A while” “to A during” “to A until”
Characteristics of Fee Simple Determinable
A fee simple determinable is transferable, devisable, and descendable, but always subject to the attached condition
If the stated condition occurs, the estate automatically terminates and reverts to the grantor
Possibility of Reverter
the reversionary interest the grantor retains when granting a fee simple determinable is known as a possibility of reverter. Upon the conveyance, the grantor automatically retains a possibility of reverter.
A possibility of reverter is transferable, devisable, and descendable
Fee Simple Subject to Condition Subsequent
A fee simple subject to condition subsequent is 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
Language that create – there must be (1) conditional language such as “upon condition that” “but if” “if it happens that” and (2) an explicit statement of the grantor’s right to re-enter
EX: To A, but if x event occurs, grantor reserves the right to re-enter and retake
Characteristics of Fee Simple Subject to Condition Subsequent
The fee simple subject to condition subsequent does not automatically terminate if the stated condition occurs, rather the grantor has to exercise the right of re-entry
It is transferable, devisable, and descendable
Right of Re-Entry
The right of re-entry (also called a power of termination) must be expressly reserved (unlike the possibility of reverter)
Most courts hold that a right of re-entry is not transferable inter vivos, but most states hold them to be devisable and all states hold they are descendible
Interpretation between Determinable and condition subsequent
A conveyance that contains both durational language and a power of termination will likely be construed as a fee simple subject to a condition subsequent because termination is optional
Fee Simple Subject to Executory Interest
If a fee simple estate terminates upon the happening of an event and then passes to a third party rather than reverting to the grantor or giving the grantor the right to terminate, the third party has an executory interest
Language to create – look for a third party who will take upon an occurrence of an event
EX: To A, but if x event occurs, then to B.
Characteristics of Fee Simple Subject to Executory Interest
The estate is just like a fee simple determinable, only now, if the condition occurs, the estate AUTOMATICALLY terminates in favor of someone other than the grantor
Words of Hope, Desire, or Intention
words of mere hope, desire, aspiration, expectation, or motivation are insufficient to render an estate a defeasible fee
for a defeasible fee to exist, courts require clear, durational language
Absolute Restraints on Alienation
An absolute restraint on alienation is an absolute ban on the power to sell or transfer that is not linked to any reasonable time limited purpose. Such an absolute restraint of a fee simple are void.
Conditions Violating Public Policy
Conditions or limitations that violate public policy generally are struck down, and the grantee takes free of the restraint.
If the purpose of the restraint is to penalize marriage or encourage divorce, it likely will be struck down.
HOWEVER, if the purpose was to give support until marriage or in the event of divorce, it will likely be upheld
