Property AMP Set - Estates And Future Interests

Question 1

A fee simple subject to an executory interest is an estate that:

A Automatically divests in favor of a third party on the happening of a stated event

B Continues after the happening of a stated event until the grantor exercises her power of termination

C Continues after the happening of a stated event until the third party exercises his power of termination

D Automatically terminates on the happening of a stated event and reverts to the grantor

Answer 1

A

A fee simple subject to an executory interest is an estate that automatically divests in favor of a third party (rather than the grantor) on the happening of a stated event. It is created by the same language used to create a fee simple determinable (e.g., “for so long as,” “while,” “during,” or “until”) or a fee simple subject to a condition subsequent (e.g., “upon condition that,” “provided that,” “but if,” or “if it happens that”), but rather than automatically reverting to the grantor on the happening of a stated event (fee simple determinable) or continuing after the happening of a stated event until the grantor exercises her power of termination (fee simple subject to a condition subsequent), it automatically divests in favor of a third party on the happening of a stated event. A fee simple subject to an executory interest is not an estate that continues after the happening of a stated event until the third party exercises his power of termination. An estate that continues on the happening of a stated event until the grantor exercises her power of termination (right of entry) is a fee simple subject to a condition subsequent. A right of entry can be created only in favor of the grantor and her heirs. If a similar interest is created in favor of a third party, it is called an executory interest. However, unlike a right of entry, the third party need not “exercise” his executory interest; on the happening of the stated event, the estate automatically divests in his favor. The common law did not recognize a future interest created in a third party that would vest in possession only upon the discretionary exercise of a right or power by the third party. A fee simple subject to an executory interest is not an estate that automatically terminates on the happening of a stated event and reverts to the grantor. As explained above, such an estate is a fee simple determinable. A fee simple subject to an executory interest is not an estate that continues after the happening of a stated event until the grantor exercises her power of termination. As explained above, such an estate is a fee simple subject to a condition subsequent. QUESTION ID: P0002A Additional Learning

Question 2

Which future interest follows a gap in possession or divests the estate of the transferor?

A Springing executory interest

B Shifting executory interest

C Vested remainder subject to total divestment

Answer 2

A

A springing executory interest is a future interest that follows a gap in possession or divests the estate of the transferor. A conveyance from “O to A for life, and one year after A’s death to B” creates a life estate in A, a reversion in O (the transferor), and a springing executory interest in B, because it springs out of O’s reversion. A vested remainder subject to total divestment does not follow a gap in possession or divest the estate of the transferor. A remainder is a future interest that is created in a transferee and is capable of becoming a present interest upon the natural termination of the preceding estate. Generally, a remainder follows a life estate. A vested remainder subject to total divestment is a remainder created in an ascertained person in being whose interest is not subject to a condition precedent but is subject to being defeated by the happening of some condition subsequent. A conveyance from “O to A for life, then to B; but if B predeceases A, to C” creates a life estate in A, a vested remainder subject to total divestment in B (because B is an ascertained person in being whose interest is subject to being divested if she does not survive A), and a shifting executory interest in C (see below). A shifting executory interest does not follow a gap in possession or divest the estate of the transferor. A shifting executory interest is a future interest that divests the interest of another transferee. In the above example, C has a shifting executory interest because it would divest the interest of B (another transferee). QUESTION ID: P0004B Additional Learning

Question 3

If T devises property “to A for life, then to B’s children,” and B has at least one child living at all relevant times, when does the class of “B’s children” close?

A At T’s death

B At A’s death

C At B’s death

D When the will is executed

Answer 3

B

If T devises property “to A for life, then to B’s children,” and B has at least one child living at all relevant times, the class of “B’s children” closes at A’s death. Under the rule of convenience, a class closes when some member of the class can call for a distribution of her share of the gift. When possession and enjoyment of a gift are postponed, as where the gift follows a life estate, the class remains open until the time fixed for distribution (e.g., death of the life tenant). At T’s death, the will becomes effective and A’s life estate begins. At that time, B’s child or children will have a vested remainder subject to open because the interest is certain to take on the termination of A’s life estate but also could be partially divested by B’s unborn children. At A’s death, B’s child or children will be entitled to distribution of the property, so the class will close at that time. Any children born to B after A’s death will be excluded by the rule of convenience. If T devises property “to A for life, then to B’s children,” and B has at least one child living at all relevant times, the class of “B’s children” does not close at T’s death. As stated above, pursuant to the rule of convenience, when the beneficiaries of a postponed gift are a class, the class closes at the time fixed for distribution, not at the time the interest becomes effective. Although T’s will becomes effective at T’s death, the class does not close until B’s child or children are entitled to distribution of the property—i.e., when A’s life estate terminates (at A’s death). If T devises property “to A for life, then to B’s children,” and B has at least one child living at all relevant times, the class of “B’s children” does not close at B’s death. As stated above, any children born to B after A’s death will be excluded from the class by the rule of convenience. Note, however, that the rule of convenience will not be followed if contrary to the grantor’s or testator’s expressed intent. Thus, if instead T’s will had said “to A for life, then to B’s children, including children born to B after A dies,” the class would remain open until B’s death. If T devises property “to A for life, then to B’s children,” and B has at least one child living at all relevant times, the class of “B’s children” does not close when the will is executed. The will does not become effective until T’s death, and the time fixed for distribution is not until A’s death. Thus, as explained above, the class remains open until A dies. QUESTION ID: P0005A Additional Learning

Question 4

In the case of a deed, the perpetuities period begins to run on the date:

A The deed is acknowledged before a notary

B The deed is signed by the grantor

C The deed is signed by the grantee

D The deed is delivered with the intent to pass title

Answer 4

D

In the case of a deed, the perpetuities period begins to run on the date the deed is delivered with the intent to pass title. The validity of interests under the Rule Against Perpetuities is determined at the time the interests are created. For a deed, this is the date of delivery, not the date the deed is signed by the grantor or the grantee. In the case of a deed, the perpetuities period does not necessarily begin to run on the date the deed is acknowledged before a notary. Delivery is presumed if a deed is both acknowledged by the grantor and recorded, but even so, this presumption is rebuttable. QUESTION ID: P0006B Additional Learning

Question 5

In the case of a deed, the perpetuities period begins to run on the date the deed is:

A Recorded

B Delivered with intent to pass title

C Signed by the grantor

Answer 5

B

In the case of a deed, the perpetuities period begins to run on the date the deed is delivered with intent to pass title. The validity of interests under the Rule Against Perpetuities is determined at the time the interests are created. Because a deed is not effective to transfer an interest in property until it has been delivered with the intent to pass title, the perpetuities period does not begin to run until that time. Thus, the perpetuities period does not begin to run on the date the deed is signed by the grantor or recorded. QUESTION ID: P0006C Additional Learning

Question 6

In general, a life tenant commits permissive waste when he:

A Substantially changes the use of the property in a way that increases its value

B Fails to make required repairs to the land or pay required carrying charges

C Consumes or exploits natural resources on the property

Answer 6

B

In general, a life tenant commits permissive waste when he fails to make required repairs to the land or pay required carrying charges (e.g., interest on encumbrances, ordinary taxes). When a life tenant consumes or exploits natural resources on the property (e.g., timber, minerals, oil), he commits voluntary waste. However, exceptions to this rule allow the life tenant to consume or exploit such resources:(i) in reasonable amounts when necessary for repair and maintenance of the land;(ii) when the life tenant is expressly given the right to exploit such resources in the grant (e.g., a mineral lease);(iii) when prior to the grant, the land was used in exploitation of such natural resources, so that the grantor most likely intended the life tenant to have the right to exploit; and(iv) in many states, when the land is suitable only for such exploitation (e.g., a mine). When a life tenant substantially changes the use of the property in a way that increases its value (e.g., he demolishes a run-down building), he commits ameliorative waste. QUESTION ID: P0011A Additional Learning

Question 7

A grantor who conveys a lesser estate than the grantor owns retains __________.

A A possibility of reverter

B A reversion

C No interest

D A right of entry

Answer 7

B

A grantor who conveys a lesser estate than the grantor owns retains a reversion. For example, where O has a fee simple, a conveyance from “O to A for life” creates a life estate in A and a reversion in O. A possibility of reverter is the future interest retained by a grantor who conveys a fee simple determinable. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A right of entry is the future interest retained by a grantor who conveys a fee simple subject to a condition subsequent. A conveyance from “O to A upon condition that/provided that/but if/if it happens that [event], then O or her heirs may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O. QUESTION ID: P0012C Additional Learning

Question 8

If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, who owns the property?

A C only

B A and C, as joint tenants

C A and C, as tenants in common

D A only

Answer 8

D

If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, A only owns the property. A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant’s interest to another is inoperative as to joint tenancy property because when the co-tenant who is the testator dies (which is when the will becomes effective), her rights in the joint tenancy property are extinguished, and the will has no effect on them. Thus, upon B’s death the property is freed from her concurrent interest, leaving A the sole owner and C with no interest in the property. On the other hand, certain acts by one joint tenant will sever a joint tenancy (e.g., suit for partition, inter vivos conveyance by one joint tenant, execution of a mortgage by one joint tenant in a title theory state). Then, the transferee takes the interest as a tenant in common and not as a joint tenant. Thus, if B had successfully conveyed her interest to C by deed, A and C would own the property as tenants in common but not as joint tenants. Alternatively, if A and B had owned the property as tenants in common, B’s will would have effectively conveyed her interest to C, so that A and C would own the property as tenants in common. Furthermore, C only would be incorrect in any event because B can convey no greater interest than the one-half interest she owns. QUESTION ID: P0018A Additional Learning

Question 9

If A, B, and C own property as joint tenants, and A conveys his interest to D, what interests do the parties own on B’s death?

A B’s estate, C, and D each own a 1/3 interest

B C owns a 2/3 interest, and D owns a 1/3 interest

C C and D each own a 1/2 interest

Answer 9

B

If A, B, and C own property as joint tenants, and A conveys his interest to D, on B’s death C owns a 2/3 interest, and D owns a 1/3 interest. The distinguishing feature of a joint tenancy is the right of survivorship. When property is held by three or more joint tenants, one joint tenant’s conveyance destroys the joint tenancy only as to that interest. The remaining joint tenants continue to hold in joint tenancy as between themselves, and the grantee holds his interest as a tenant in common with them. When A sold his interest to D, that 1/3 interest was severed and thus converted into a tenancy in common, which D continues to hold. However, the remaining 2/3 interest continues to be held in joint tenancy with right of survivorship between B and C. When one joint tenant dies, the property is freed from her interest, and the survivors retain an undivided right in the property. Since B’s interest was extinguished on her death, B’s estate does not take B’s interest; the surviving joint tenant (C) holds free of it. Thus, C owns a 2/3 interest in the property. C and D do NOT each own a 1/2 interest. This would be the case if D took A’s share as a joint tenant. However, as is explained above, D took as a tenant in common. Thus, D’s share does not increase on B’s death, because he does not have the benefit of the right of survivorship. B’s estate, C, and D do NOT each own a 1/3 interest. As is explained above, B’s estate does not take B’s interest on B’s death. QUESTION ID: P0020A Additional Learning

Question 10

If O conveys property “to A for life, then to B; but if B predeceases A, to C,” what interest does B have?

A Contingent remainder

B Vested remainder subject to total divestment

C Vested remainder subject to open

D Indefeasibly vested remainder

Answer 10

B

If O conveys property “to A for life, then to B; but if B predeceases A, to C,” B has a vested remainder subject to total divestment. A vested remainder subject to total divestment arises when the remainderman is in existence and ascertained and his interest is not subject to any condition precedent, but his right to possession and enjoyment is subject to being defeated by the happening of a condition subsequent. B, an ascertained person in being whose interest is not subject to a condition precedent, has a vested remainder, but his interest is subject to being divested if he does not survive A. B does not have an indefeasibly vested remainder. An indefeasibly vested remainder is a remainder that (i) can be created in and held only by an ascertained person in being, (ii) must be certain to become possessory on the termination of the prior estate, (iii) must not be subject to being defeated or divested, and (iv) must not be subject to being diminished in size. B is an ascertained person in being, but his vested remainder is subject to being divested if he does not survive A. B does not have a vested remainder subject to open. A vested remainder subject to open is a remainder created in a class of persons that is certain to take on the termination of the preceding estate, but is subject to diminution by reason of other persons becoming entitled to share in the remainder. B’s vested remainder is not subject to partial divestment by other remaindermen. B does not have a contingent remainder. A contingent remainder is a remainder that is (i) subject to a condition precedent, or (ii) created in favor of unborn or unascertained persons. B is an ascertained person in being whose interest is not subject to a condition precedent. QUESTION ID: P0013 Additional Learning

Question 11

Which of the following interests in property are not subject to the Rule Against Perpetuities?

A Rights of first refusal

B Contingent remainders

C Reversions

D Executory interests

Answer 11

C

Reversions are not subject to the Rule Against Perpetuities. The Rule Against Perpetuities provides that certain interests in property are void if there is any possibility, however remote, that they may vest more than 21 years after some life in being at the creation of the interest. The Rule applies to the following interests in property: (i) contingent remainders, (ii) executory interests, (iii) class gifts (even if vested remainders), (iv) options and rights of first refusal, and (v) powers of appointment. Future interests in the grantor (i.e., reversions, possibilities of reverter, and rights of entry) are not subject to the Rule. QUESTION ID: P0015 Additional Learning

Question 12

A fee simple determinable is an estate that:

A Divests in favor of a third person on the happening of a stated event

B Automatically terminates on the happening of a stated event and reverts to the grantor

C Continues after the happening of a stated event until the grantor exercises her power of termination

Answer 12

B

A fee simple determinable is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A fee simple determinable is not an estate that continues after the happening of a stated event until the grantor exercises her power of termination. An estate that continues after the happening of a stated event until the grantor exercises her power of termination (right of entry) is a fee simple subject to a condition subsequent. A conveyance from “O to A, upon condition that/provided that/but if/if it happens that [event], O may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O. A fee simple determinable is not an estate that divests in favor of a third person on the happening of a stated event. An estate that terminates on the happening of a stated event and divests in favor of a third person, rather than in favor of the grantor, is a fee simple subject to an executory interest. A conveyance from “O to A for so long as/while/during/until [event], then to B” or “provided that/but if/if it happens that [event], then to B” creates a fee simple subject to an executory interest. QUESTION ID: P0001A Additional Learning

Question 13

In which of the following conveyances from O does A have a fee simple determinable?

A “To A and her heirs”

B “To A for so long as the premises are used as an animal shelter”

C “To A, but if the premises cease to be used as an animal shelter, O may enter and terminate the estate”

D “To A for life until the premises cease to be used as an animal shelter”

Answer 13

B

In a conveyance from O “to A for so long as the premises are used as an animal shelter,” A has a fee simple determinable. A fee simple determinable is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. It is created by the use of durational, adverbial language, such as “for so long as,” “while,” “during,” or “until.” A has a fee simple because the estate may last indefinitely if the premises are used as an animal shelter. If, however, the premises cease to be used as an animal shelter, the estate will automatically terminate and possession of the land will revert to O. In a conveyance from O “to A, but if the premises cease to be used as an animal shelter, O may enter and terminate the estate,” A does not have a fee simple determinable. Rather, A has a fee simple subject to a condition subsequent. A fee simple subject to a condition subsequent is an estate that terminates when the grantor exercises her power of termination (right of entry) after the happening of a stated event. Words such as “upon condition that,” “provided that,” “but if,” and “if it happens that” are usually held to create conditions subsequent, and under most decisions the grantor must expressly reserve the right of entry. In this conveyance, if the premises cease to be used as an animal shelter, A’s estate will not end automatically but will continue until O asserts her right of entry. In a conveyance from O “to A for life until the premises cease to be used as an animal shelter,” A does not have a fee simple determinable. Rather, A has a life estate determinable. A life estate is an estate that cannot last longer than the life or lives of one or more persons. It may be indefeasible (so that it will end only when the life tenant dies), or it may be made defeasible in the same way that fee estates can be defeasible (e.g., determinable, subject to a condition subsequent, subject to an executory interest). In such a case, the estate may end before the life tenant dies if the limiting condition occurs. In this conveyance, A has a life estate subject to a limitation that the premises be used as an animal shelter. Because of the use of durational language (“until”), it can be termed a life estate determinable. Thus, if the premises cease to be used as an animal shelter during A’s lifetime, the estate will automatically terminate and revert to O, but A’s estate also will terminate at his death, even if the premises are being used as an animal shelter at that time. In a conveyance from O “to A and her heirs,” A does not have a fee simple determinable. Rather, A has a fee simple absolute. A fee simple absolute is an estate that has an infinite duration. A fee simple absolute also may be created by a conveyance simply from O “to A.” QUESTION ID: P0001B Additional Learning

Question 14

In the case of a will, the perpetuities period begins to run on the date:

A The testator dies

B The will is admitted to probate

C The will is executed

Answer 14

A

In the case of a will, the perpetuities period begins to run on the date the testator dies. The validity of interests under the Rule Against Perpetuities is determined at the time the interests are created. The interests in a will are created when the will becomes effective, which is on the testator’s death. Thus, the perpetuities period does not begin to run on the date the will is executed or admitted to probate. QUESTION ID: P0006A Additional Learning

Question 15

A __________ restraint provides that if the grantee attempts to transfer the property, it is surrendered to another person.

A Disabling

B Forfeiture

C Promissory

Answer 15

B

A forfeiture restraint provides that if the grantee attempts to transfer the property, it is surrendered to another person. A conveyance from “O to A, but if A attempts to transfer the land or any interest therein during her lifetime, to B” contains a forfeiture restraint. Reasonable (i.e., limited in time and purpose) forfeiture restraints on legal interests generally are valid. A disabling restraint provides that any attempted transfer of the property is ineffective. A conveyance from “O to A, and neither A nor her heirs shall have the right to transfer the land or any interest therein” contains a disabling restraint. Disabling restraints on any legal interest are void. A promissory restraint provides that the grantee covenants not to transfer the property. A conveyance from “O to A, and A hereby covenants not to transfer the land or any interest therein without O’s consent” contains a promissory restraint. Reasonable promissory restraints on legal interests generally are valid. QUESTION ID: P0008B Additional Learning

Question 16

What interest arises when the remainderman is in existence and ascertained, but her right to possession and enjoyment is subject to being defeated by the happening of a condition subsequent?

A Vested remainder subject to total divestment

B Vested remainder subject to partial divestment

C Contingent remainder

Answer 16

A

A vested remainder subject to total divestment arises when the remainderman is in existence and ascertained, but her right to possession and enjoyment is subject to being defeated by the happening of a condition subsequent. A condition subsequent is an express condition that, if it occurs, will divest the remainderman of her interest. A vested remainder subject to partial divestment (also called a vested remainder subject to open) arises when the remainderman is in existence and ascertained, but her interest is subject to diminution by reason of other persons becoming entitled to share in the remainder (i.e., a class gift). A contingent remainder is a remainder that is (i) subject to a condition precedent, or (ii) created in favor of unborn or unascertained persons. A condition precedent is an express condition that must occur before the remainder becomes possessory. QUESTION ID: P0013B Additional Learning

Question 17

Which of the following acts will sever a joint tenancy?

A A testamentary disposition by one joint tenant

B In a lien theory state, the execution of a mortgage by one joint tenant

C An inter vivos conveyance by one joint tenant

Answer 17

C

An inter vivos conveyance by one joint tenant will sever a joint tenancy. The grantee then becomes a tenant in common with the original joint tenant or tenants. This applies to both voluntary and involuntary conveyances; the typical example is a deed. In a lien theory state, the execution of a mortgage by one joint tenant will not sever a joint tenancy. In states following the lien theory, a mortgage is regarded as a lien on title, and one joint tenant’s execution of a mortgage on her interest does not by itself cause a severance. But in states following the title theory, a mortgage is regarded as a transfer of title, and the transfer destroys the unity of title and severs the joint tenancy. A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant’s interest to another is inoperative as to joint tenancy property because when the co-tenant who is the testator dies (which is when the will becomes effective), his rights in the joint tenancy property are extinguished, and the will has no effect on them. QUESTION ID: P0018B Additional Learning

Question 18

Must a co-tenant in possession share profits gained by her personal use of the property with co-tenants out of possession?

A Yes, because such use constitutes an ouster

B No, if the use is to rent out the property to a third party

C No, unless there has been an ouster or agreement to the contrary

Answer 18

C

No, a co-tenant in possession need not share profits gained by her personal use of the property with co-tenants out of possession unless there has been an ouster or agreement to the contrary. An ouster occurs when one co-tenant wrongfully excludes another co-tenant from possession of the whole or any part of the whole of the property. A claim of right to exclusive possession can constitute an ouster, but mere personal use of the property in a manner that benefits or generates profits for the co-tenant in possession does NOT constitute an ouster. However, if the co-tenant in possession rents out the property to a third party, she must account to the co-tenant out of possession for his share of the net rents (after deducting operating expenses for the rental property). QUESTION ID: P0019B Additional Learning

Question 19

If A, B, and C own property as joint tenants, and P obtains a money judgment against A, what interests do the parties own on B’s death?

A C owns a 2/3 interest, and P owns a 1/3 interest

B B’s estate, C, and P each own a 1/3 interest

C A owns a 1/2 interest subject to P’s lien, and C owns a 1/2 interest

Answer 19

C

If A, B, and C own property as joint tenants, and P obtains a money judgment against A, on B’s death A owns a 1/2 interest subject to P’s lien, and C owns a 1/2 interest. In most states, a judgment lien obtained against one of several joint tenants does not sever the joint tenancy because it is not considered a sufficiently substantial “conveyance” to destroy the unities of time and title. However, if the plaintiff who obtained the judgment proceeds to enforce it by foreclosure, the sheriff’s deed issued to the buyer at that sale will sever the joint tenancy. Because P has not enforced her lien against A by foreclosure, A retains his interest as a joint tenant, but his interest is subject to P’s lien. When one joint tenant dies, the property is freed from her interest, and the survivors retain an undivided right in the property. Since B’s interest was extinguished on her death, B’s estate does not take B’s interest; the surviving joint tenants (A and C) hold free of it. C does NOT own a 2/3 interest, and P does NOT own a 1/3 interest. This would be the case if P’s judgment lien severed the joint tenancy. When property is held by three or more joint tenants, one joint tenant’s conveyance destroys the joint tenancy only as to that interest. The remaining joint tenants continue to hold in joint tenancy as between themselves, and the grantee holds her interest as a tenant in common with them. If P’s judgment lien severed A’s 1/3 interest, that interest would have been converted into a tenancy in common, which P would continue to hold. Thus, C would own a 2/3 interest in the property on B’s death. B’s estate, C, and P do NOT each own a 1/3 interest. As is explained above, B’s estate does not take B’s interest on B’s death, and P’s judgment lien did not sever the joint tenancy. QUESTION ID: P0020B Additional Learning

Question 20

If O conveys property “to charity A, but if the premises are no longer used as a museum, to charity B,” charity A has __________ and charity B has __________.

A a fee simple determinable; a possibility of reverter

B a fee simple on condition subsequent; a right of entry

C a fee simple subject to an executory interest; an executory interest

D a fee simple absolute; no interest

Answer 20

C

If O conveys property “to charity A, but if the premises are no longer used as a museum, to charity B,” charity A has a fee simple subject to an executory interest and charity B has an executory interest. A fee simple subject to an executory interest is an estate that, on the happening of a stated event, is automatically divested in favor of a third person rather than the grantor. The words “but if the premises are no longer used as a museum” create a condition on which charity A’s interest will be terminated and a third party, charity B, will get possession of the land; hence charity A’s estate is subject to an executory interest in favor of charity B, which would be referred to simply as a fee simple subject to an executory interest. Charity B is not the grantor, and thus its interest is not a right of entry (the correlative future interest in a grantor who conveys a fee simple subject to a condition subsequent). Its interest is an executory interest because it divests a fee simple. Although executory interests are subject to the Rule Against Perpetuities, charity B’s interest does not violate the Rule because the charity-to-charity exception provides that a gift over from one charity to another charity on a remote condition is valid. Charity A does not have a fee simple determinable and charity B does not have a possibility of reverter. A fee simple determinable is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. It is created by the use of durational, adverbial language, such as “for so long as,” “while,” “during,” or “until.” A possibility of reverter arises only in the grantor. If a comparable interest is created in a third party, it is an executory interest. Charity A’s interest is not properly considered a fee simple on condition subsequent; if it were, then the grantor would have a right of entry and could take back the land upon the occurrence of the condition. When a third party, such as charity B, gets possession upon the happening of the condition, the initial grantee’s estate is called a fee simple subject to an executory interest. Moreover, charity B does not have a right of entry because it is not the grantor; a similar interest created in favor of a third party is called an executory interest. Charity A does not have a fee simple absolute and charity B does not have no interest. The Rule Against Perpetuities provides that certain interests in property are void if there is any possibility, however remote, that they may vest more than 21 years after some life in being at the creation of the interest. If charity B’s interest had violated the Rule, its interest would have been stricken, leaving charity A with a fee simple absolute (“to charity A”). However, as explained above, charity B’s interest is valid under the charity-to-charity exception to the Rule. QUESTION ID: P0002 Additional Learning

Question 21

At common law, which of the following acts would subject a life tenant to liability for waste?

A The cutting of mature trees to clear the land for cultivation.

B The extraction of minerals from the land under a mineral lease.

C The cutting of mature trees for necessary repairs on the land.

D The extraction of minerals from a mine that was active prior to the grant.

Answer 21

A

At common law, the cutting of mature trees to clear the land for cultivation would subject a life tenant to liability for waste. Voluntary waste occurs when a life tenant consumes or exploits natural resources on the property (e.g., timber, minerals, oil). Ameliorative waste consists of acts that economically benefit the property. Although clearing the land for cultivation may economically benefit the property, the life tenant would be liable for voluntary and/or ameliorative waste. At common law, the cutting of mature trees for necessary repairs on the land would not subject a life tenant to liability for waste. As explained above, a life tenant generally may not consume or exploit natural resources on the property. However, there are exceptions to this rule, one of which allows a life tenant to consume or exploit natural resources in reasonable amounts where necessary for repair and maintenance of the land. At common law, the extraction of minerals under a mineral lease would not subject a life tenant to liability for waste. Another exception to the general rule allows a life tenant to consume or exploit natural resources when she is expressly given the right, as in a lease. At common law, the extraction of minerals from a mine that was active prior to the grant would not subject a life tenant to liability for waste. Under the open mines doctrine, if a mine was active when the life estate began, the life tenant may continue to mine the property. However, the life tenant may not open any new mines. QUESTION ID: P0003 Additional Learning

Question 22

If T devises property “to A for life, then to B’s children,” and B has one child (W) on the date the will is executed, two children (W and X) at T’s death, three children (W, X, and Y) at A’s death, and four children (W, X, Y, and Z) at B’s death, who will share in the class gift?

A W, X, Y, and Z

B W only

C W and X only

D W, X, and Y only

Answer 22

D

If T devises property “to A for life, then to B’s children,” and B has one child (W) on the date the will is executed, two children (W and X) at T’s death, three children (W, X, and Y) at A’s death, and four children (W, X, Y, and Z) at B’s death, W, X, and Y only will share in the class gift. Under the rule of convenience, a class closes when some member of the class can call for a distribution of her share of the gift. When possession and enjoyment of a gift are postponed, as where the gift follows a life estate, the class remains open until the time fixed for distribution (e.g., death of the life tenant). At T’s death, the will became effective and A’s life estate began. At that time, W and X had a vested remainder subject to open because their interest was certain to take on the termination of A’s life estate but also could be partially divested by B’s unborn children. At A’s death, W, X, and then-born Y were entitled to distribution of the property, so the class closed at that time. Z is excluded by the rule of convenience. W only is incorrect because the class did not close on the date the will was executed. Because a will is not effective until the testator dies, the beneficiaries have only an expectancy and not an actual interest in the property until that time. W and X only is incorrect because the class did not close at T’s death. When a will makes an outright gift of a present interest to a class, if any class members are alive at the testator’s death, the class closes on the date of the testator’s death. If the devise had been “to B’s children” without A’s preceding life estate, the class would have closed at T’s death and only W and X would have been entitled to share in the class gift. Because the class gift was a future interest to take possession upon A’s death, however, Y also is entitled to a share. W, X, Y, and Z is incorrect because the class closed at A’s death rather than B’s. Under the rule of convenience, distributing one-third shares to W, X, and Y at A’s death, but later requiring them to make rebates as B had more children, would be inconvenient. Thus, Z is excluded from sharing in the gift. QUESTION ID: P0005 Additional Learning

Question 23

In which of the following conveyances from O does charity A have a fee simple subject to an executory interest?

A “To charity A, but if the premises are no longer used as a museum, to charity B”

B “To charity A, provided that if the premises are no longer used as a museum, O may enter and terminate the estate”

C “To charity A while the premises are used as a museum”

D “To charity A”

Answer 23

A

In a conveyance from O “to charity A, but if the premises are no longer used as a museum, to charity B,” charity A has a fee simple subject to an executory interest. A fee simple subject to an executory interest is an estate that automatically divests in favor of a third party, rather than the grantor, on the happening of a stated event. The words “but if the premises are no longer used as a museum” create a condition on which charity A’s interest will be terminated and a third party (charity B) will get possession of the land; hence, charity A’s estate is subject to an executory interest in favor of charity B, which would be referred to simply as a fee simple subject to an executory interest. Charity B is not the grantor, and thus its interest is not a right of entry (the correlative future interest in a grantor who conveys a fee simple subject to a condition subsequent). Its interest is an executory interest because it divests a fee simple. Although executory interests are subject to the Rule Against Perpetuities, charity B’s interest does not violate the Rule because the charity-to-charity exception provides that a gift over from one charity to another charity on a remote condition is valid. In a conveyance from O “to charity A while the premises are used as a museum,” charity A does not have a fee simple subject to an executory interest. Rather, charity A has a fee simple determinable. A fee simple determinable is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. It is created by the use of durational, adverbial language, such as “for so long as,” “while,” “during,” or “until.” In this conveyance, charity A has a fee simple because the estate may last forever if the premises are used as a museum. If, however, the premises cease to be used as a museum, the estate will automatically terminate and possession of the land will revert to O (rather than a third party). In a conveyance from O “to charity A, provided that if the premises are no longer used as a museum, O may enter and terminate the estate,” charity A does not have a fee simple subject to an executory interest. Rather, charity A has a fee simple subject to a condition subsequent. A fee simple subject to a condition subsequent is an estate that terminates when the grantor exercises her power of termination (right of entry) after the happening of a stated event. Words such as “upon condition that,” “provided that,” “but if,” and “if it happens that” are usually held to create conditions subsequent, and under most decisions the grantor must expressly reserve the right of entry. In this conveyance, if the premises cease to be used as a museum, charity A’s estate will not end automatically but will continue until O asserts her right of entry. In a conveyance from O “to charity A,” charity A does not have a fee simple subject to an executory interest. Rather, charity A has a fee simple absolute. A fee simple absolute is the largest estate permitted by law and is not subject to termination by the happening of a future event. QUESTION ID: P0002B Additional Learning

Question 24

In most states, when tenants by the entirety divorce, they hold the property as __________.

A Tenants at will

B Tenants in common

C Joint tenants

Answer 24

B

In most states, when tenants by the entirety divorce, they hold the property as tenants in common. A tenancy by the entirety is a marital estate akin to a joint tenancy between husband and wife. Divorce severs a tenancy by the entirety, leaving the parties as tenants in common with no right of survivorship in most states. On the other hand, in a minority of states, when tenants by the entirety divorce, they hold the property as joint tenants with right of survivorship. When tenants by the entirety divorce, they do not hold the property as tenants at will. A tenancy at will is a leasehold estate in land that is terminable at the will of either the landlord or the tenant. QUESTION ID: P0009B Additional Learning

Question 25

A grantor who conveys a fee simple absolute retains:

A No interest

B A possibility of reverter

C A reversion

Answer 25

A

A grantor who conveys a fee simple absolute retains no interest. A fee simple absolute is the largest estate in property permitted by law. It has an indefinite and potentially infinite duration. The holder can sell it, divide it, or devise it, and it passes to his heirs. If O owned a fee simple absolute, a conveyance from “O to A” creates a fee simple absolute in A, leaving O with no interest. A grantor who conveys a fee simple determinable retains a possibility of reverter. A fee simple determinable is an estate of potentially infinite duration, but which automatically terminates on the happening of a stated event and reverts to the grantor. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A grantor who conveys a lesser estate than the grantor owns retains a reversion. Where O has a fee simple, a conveyance from “O to A for life” creates a life estate in A and a reversion in O. QUESTION ID: P0010B Additional Learning

Question 26

A grantor who conveys a fee simple determinable retains __________.

A A possibility of reverter

B A reversion

C A right of entry

D No interest

Answer 26

A

A grantor who conveys a fee simple determinable retains a possibility of reverter. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A right of entry is the future interest retained by a grantor who conveys a fee simple subject to a condition subsequent. A conveyance from “O to A upon condition that/provided that/but if/if it happens that [event], then O or her heirs may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O. A reversion is the future interest retained by a grantor who conveys a lesser estate than the grantor owns. Where O has a fee simple, a conveyance from “O to A for life” creates a life estate in A and a reversion in O. QUESTION ID: P0012A Additional Learning

Question 27

Which of the following interests in property are subject to the Rule Against Perpetuities?

A Contingent remainders, possibilities of reverter, and rights of first refusal

B Executory interests, rights of entry, and powers of appointment

C Reversions, options, and class gifts

D Contingent remainders, executory interests, and vested remainders subject to open

Answer 27

D

Contingent remainders, executory interests, and vested remainders subject to open are subject to the Rule Against Perpetuities. The Rule Against Perpetuities provides that certain interests in property are void if there is any possibility, however remote, that they may vest more than 21 years after some life in being at the creation of the interest. The Rule applies to the following interests in property:(i) contingent remainders;(ii) executory interests;(iii) class gifts (even if vested remainders);(iv) options and rights of first refusal; and(v) powers of appointment. Future interests in the grantor (i.e., reversions, possibilities of reverter, and rights of entry) are not subject to the Rule Against Perpetuities. Thus, contingent remainder, possibilities of reverter, and rights of first refusal is incorrect because it includes possibilities of reverter. Executory interests, rights of entry, and powers of appointment is incorrect because it includes rights of entry. Reversions, options, and class gifts is incorrect because it includes reversions. QUESTION ID: P0015A Additional Learning

Question 28

At common law, which of the following unities are required to create a joint tenancy?

A Time, title, interest, and marriage

B Time, title, interest, and possession

C Title, interest, possession, and right of survivorship

Answer 28

B

At common law, the unities of time, title, interest, and possession are required to create a joint tenancy. The unity of time requires that the interest of each joint tenant vest at the same time. The unity of title requires that all joint tenants acquire title by the same instrument. The unity of interest requires that the interest of each joint tenant be of the same type and duration. The unity of possession requires that each joint tenant have the right to possession of the whole. If these four unities are not present, a joint tenancy cannot be created at common law. Instead, a tenancy in common results. A tenancy in common is a concurrent estate with no right of survivorship. Title, interest, possession, and right of survivorship are not the unities required to create a joint tenancy. Rather, the right of survivorship is a benefit of a joint tenancy. In a joint tenancy, each co-tenant owns an undivided share of the property, and the surviving co-tenant has the right to the whole estate (i.e., has the right of survivorship). Time, title, interest, and marriage are not the unities required to create a joint tenancy. A tenancy by the entirety is a marital estate akin to a joint tenancy in that four unities (plus a fifth—marriage) are required for its creation, and the surviving spouse has the right of survivorship. Marriage, however, is not required to create a joint tenancy. QUESTION ID: P0017B Additional Learning

Question 29

A co-tenant has the right to possess:

A The entire estate

B His proportion of the estate, as determined by his amount of consideration paid

C His proportion of the estate, as determined by the number of co-tenants

Answer 29

A

A co-tenant has the right to possess the entire estate subject to the equal right of his co-tenants. A co-tenant out of possession cannot bring a possessory action unless there has been an “ouster” (i.e., wrongful exclusion) by the co-tenant in possession. Although tenants in common may own unequal interests in the property (e.g., A owns 2/3, B owns 1/6, and C owns 1/6), they have the equal right to possess the entire estate. A co-tenant’s right to possession is not his proportion of the estate as determined by his amount of consideration paid or the number of co-tenants. Note that joint tenants may pay unequal amounts of consideration, but they always hold equal interests in the property (i.e., unity of interest). QUESTION ID: P0019A Additional Learning

Question 30

Which of the following acts will not sever a tenancy by the entirety?

A Death of one spouse

B Execution by a creditor of one spouse

C Divorce of the spouses

D Mutual agreement of the spouses

Answer 30

B

The execution by a creditor of one spouse will not sever a tenancy by the entirety. A tenancy by the entirety is a marital estate akin to a joint tenancy between husband and wife. Severance of a tenancy by the entirety is limited. Although a joint creditor of both spouses can execute a judgment against the property, terminating the tenancy by the entirety, a creditor of only one spouse cannot. The death of one spouse will sever a tenancy by the entirety, leaving the surviving spouse as sole owner of the property. The divorce of the spouses will sever a tenancy by the entirety, leaving the parties as tenants in common with no right of survivorship in most states. The mutual agreement of the spouses (e.g., deed executed by both spouses) will sever a tenancy by the entirety. A deed or mortgage executed by only one spouse, however, is ineffective to cause a severance. QUESTION ID: P0009 Additional Learning

Question 31

Which of the following is a life tenant obligated to perform?

A Obtain insurance on the land.

B Make permanent improvements to the land.

C Pay ordinary taxes on the land.

D Pay the principal of a mortgage on the land.

Answer 31

C

A life tenant is obligated to pay ordinary taxes on the land, provided that they do not exceed the rent or fair rental value of the land. Failure to pay the taxes constitutes permissive waste and subjects the life tenant to liability for damages. Although a life tenant is obligated to make reasonable repairs to the land and structures, he is not obligated to make permanent improvements to the land. Although a life tenant is obligated to pay the interest on a mortgage on the land, he is not obligated to pay the principal of a mortgage on the land. However, a life tenant who places a mortgage solely on his life estate is liable for both principal and interest payments. A life tenant is not obligated to obtain insurance on the land, but he may do so. QUESTION ID: P0011 Additional Learning

Question 32

Which of the following is not a future interest in the grantor?

A Remainder

B Right of entry

C Reversion

D Possibility of reverter

Answer 32

A

A remainder is a future interest created in a grantee rather than a grantor. A remainder must be expressly created in the instrument creating the intermediate possessory estate. A conveyance from “O to A for life, then to B” creates a life estate in A and a remainder in B. A possibility of reverter is the future interest left in a grantor who conveys a fee simple determinable. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A right of entry is the future interest retained by the grantor who conveys a fee simple subject to a condition subsequent. A conveyance from “O to A upon condition that/provided that/but if/if it happens that [event], then O or her heirs may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O. A reversion is the future interest left in a grantor who conveys a lesser estate. A conveyance from “O to A for life” creates a life estate in A and a reversion in O. QUESTION ID: P0012 Additional Learning

Question 33

Which future interest divests the interest of another transferee?

A Shifting executory interest

B Vested remainder subject to total divestment

C Springing executory interest

Answer 33

A

A shifting executory interest is a future interest that divests the interest of another transferee. A conveyance from “O to A for life, then to B; but if B predeceases A, to C” creates a life estate in A, a vested remainder subject to total divestment in B (see below), and a shifting executory interest in C, because C’s interest would divest the interest of B (another transferee). A vested remainder subject to total divestment does not divest the interest of another transferee. A remainder is a future interest that is created in a transferee and is capable of becoming a present interest upon the natural termination of the preceding estate. Generally, a remainder follows a life estate. A vested remainder subject to total divestment is a remainder created in an ascertained person in being whose interest is not subject to a condition precedent but is subject to being defeated by the happening of some condition subsequent. In the above example, B has a vested remainder subject to total divestment because B is an ascertained person in being whose interest is subject to being divested if she does not survive A. Although B’s interest will become possessory upon the expiration of A’s life estate, C’s interest does not await the expiration of B’s vested remainder, but instead may cut it short. Thus, C has a shifting executory interest. A springing executory interest does not divest the interest of another transferee. A springing executory interest is a future interest that follows a gap in possession or divests the estate of the transferor. A conveyance from “O to A for life, and one year after A’s death to B” creates a life estate in A, a reversion in O (the transferor), and a springing executory interest in B, because it springs out of O’s reversion. QUESTION ID: P0004A Additional Learning

Question 34

If T devises property “to B’s children,” and B has at least one child living at all relevant times, when does the class of “B’s children” close?

A At B’s death

B At T’s death

C On the date the will is executed

Answer 34

B

If T devises property “to B’s children,” and B has at least one child living at all relevant times, when does the class of “B’s children” close?

A At B’s death

B At T’s death

C The date the will is executed

Question 35

A __________ restraint provides that any attempted transfer of the property is ineffective.

A Forfeiture

B Disabling

C Promissory

Answer 35

B

A disabling restraint provides that any attempted transfer of the property is ineffective. A conveyance from “O to A, and neither A nor her heirs shall have the right to transfer the land or any interest therein” contains a disabling restraint. Disabling restraints on any legal interest are void. A forfeiture restraint provides that if the grantee attempts to transfer the property, it is surrendered to another person. A conveyance from “O to A, but if A attempts to transfer the land or any interest therein during her lifetime, to B” contains a forfeiture restraint. Partial (i.e., limited in time and purpose) forfeiture restraints on legal interests generally are valid. A promissory restraint provides that the grantee covenants not to transfer the property. A conveyance from “O to A, and A hereby covenants not to transfer the land or any interest therein without O’s consent” contains a promissory restraint. Partial promissory restraints on legal interests generally are valid. QUESTION ID: P0008A Additional Learning

Question 36

A tenancy by the entirety can be terminated by:

A Execution by a creditor of one spouse

B Separation of the spouses

C Mutual agreement of the spouses

Answer 36

C

A tenancy by the entirety can be terminated by mutual agreement of the spouses (e.g., a deed executed by both spouses). A tenancy by the entirety is a marital estate akin to a joint tenancy between husband and wife. It can be terminated only by:(i) the death of either spouse (leaving the surviving spouse as sole owner of the property);(ii) divorce (leaving the parties as tenants in common with no right of survivorship in most states);(iii) mutual agreement; or(iv) execution by a joint creditor of both spouses. Mere separation of the spouses (as opposed to a divorce) or execution by a creditor of one spouse does not terminate a tenancy by the entirety. QUESTION ID: P0009A Additional Learning

Question 37

Life tenants are obligated to make which payments on a mortgage on the land?

A Only the principal

B Neither the principal nor the interest

C The principal and the interest

D Only the interest

Answer 37

D

Life tenants are obligated to make only the interest payments on a mortgage on the land. Failure to pay interest on any encumbrances on the land constitutes permissive waste. Principal payments, if any, are the responsibility of the holder of the future interest (typically a remainder or reversion) that follows the life estate. Although life tenants are obligated to pay the interest on a mortgage on the land, they are not obligated to pay the principal of a mortgage on the land. Thus, the answer choices requiring the life tenants to pay only the principal and both the principal and the interest are incorrect. But note: A life tenant who places a mortgage solely on his life estate is liable for both the principal and the interest payments. QUESTION ID: P0011B Additional Learning

Question 38

A grantor who conveys a fee simple subject to a condition subsequent retains __________.

A A possibility of reverter

B A right of entry

C No interest

D A reversion

Answer 38

B

A grantor who conveys a fee simple subject to a condition subsequent retains a right of entry. A conveyance from “O to A upon condition that/provided that/but if/if it happens that [event], then O or her heirs may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O. A possibility of reverter is the future interest retained by a grantor who conveys a fee simple determinable. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A reversion is the future interest retained by a grantor who conveys a lesser estate than the grantor owns. Where O has a fee simple, a conveyance from “O to A for life” creates a life estate in A and a reversion in O. QUESTION ID: P0012B Additional Learning

Question 39

Which interest violates the Rule Against Perpetuities and is stricken if it follows a defeasible fee and has no limit on the time within which it must vest?

A A contingent remainder

B An executory interest

C A possibility of reverter

Answer 39

B

An executory interest that follows a defeasible fee and has no limit on the time within which it must vest violates the Rule Against Perpetuities and is stricken. The effect on the remaining fee estate depends on whether the fee is determinable or subject to a condition subsequent. If the defeasible fee is phrased in durational terms (e.g., “for so long as,” “until”), the estate still will terminate upon the happening of the stated event, and the grantor will have a possibility of reverter. In contrast, if the fee is subject to a condition subsequent, the condition is stricken as well, and the estate becomes a fee simple absolute. Although a contingent remainder is subject to the Rule Against Perpetuities, a remainder cannot follow a fee simple interest of any kind. Any interest that follows a fee and is held by a third person is an executory interest. A possibility of reverter is the future interest retained by a grantor who conveys a fee simple determinable (a defeasible fee). Future interests in the grantor are not subject to the Rule Against Perpetuities. QUESTION ID: P0016B Additional Learning

Question 40

If O conveys property “to A for her support until she remarries,” what interest does A have?

A Fee simple absolute

B Fee simple subject to a condition subsequent

C Fee simple determinable

D Fee simple subject to an executory interest

Answer 40

C

If O conveys property “to A for her support until she remarries,” A has a fee simple determinable. A fee simple determinable is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. It is created by the use of durational, adverbial language, such as “for so long as,” “while,” “during,” or “until.” A has a fee simple because the estate may last forever if she never remarries. If, however, A remarries, the estate will automatically terminate and possession of the land will revert to O. A does not have a fee simple absolute. A fee simple absolute is the largest real property estate permitted by law. It has an infinite duration and is not susceptible to being terminated early by any event. A’s estate will terminate upon the happening of a stated event (A’s remarriage). Thus, A has a defeasible fee: a fee simple determinable, as explained above. Although restraints intended to penalize marriage or encourage divorce (e.g., “to A if she divorces B”) may be struck down as violations of public policy, restraints intended to provide support until marriage generally are upheld. Because O’s purpose is to provide support to A until she remarries, the restraint is valid. A does not have a fee simple subject to a condition subsequent. A fee simple subject to a condition subsequent is an estate that terminates when the grantor exercises her power of termination (right of entry) after the happening of a stated event. Words such as “upon condition that,” “provided that,” “but if,” and “if it happens that” are usually held to create conditions subsequent, and under most decisions the grantor must expressly reserve the right of entry. Here, O will immediately and automatically become the owner of the fee simple upon A’s remarriage, without taking any steps to terminate A’s interest. A does not have a fee simple subject to an executory interest. A fee simple subject to an executory interest is an estate that, on the happening of a stated event, automatically divests in favor of a third person rather than the grantor. Upon A’s remarriage, O, the grantor, rather than a third person, will automatically become the owner of the fee simple. QUESTION ID: P0001 Additional Learning

Question 41

If O conveys property “to A for life, then to B; but if B predeceases A, to C,” what interest does C have?

A Vested remainder subject to total divestment

B Shifting executory interest

C Springing executory interest

D Alternative contingent remainder

Answer 41

B

If O conveys property “to A for life, then to B; but if B predeceases A, to C,” C has a shifting executory interest. A shifting executory interest is a future interest that divests the interest of another transferee. A has a life estate. B has a vested remainder subject to total divestment because B is an ascertained person in being whose interest is not subject to a condition precedent but is subject to being divested if she does not survive A. Because C’s interest may divest B’s interest, it is a shifting executory interest. C does not have a vested remainder subject to total divestment. A remainder is a future interest created in a transferee that is capable of becoming a present interest upon the natural termination of the preceding estate. Generally, a remainder follows a life estate. If the interest is not capable of taking on the natural termination of the preceding estate, it is an executory interest. As explained above, B has a vested remainder subject to total divestment. C’s interest does not await the expiration of B’s vested remainder, but instead may cut it short. Thus, it is an executory interest. C does not have an alternative contingent remainder. A contingent remainder is a remainder that is (i) subject to a condition precedent, or (ii) created in favor of unborn or unascertained persons. As explained above, a remainder cannot divest a preceding estate prior to its normal expiration. Future interests that cut short a preceding estate are called executory interests. C does not have a springing executory interest. A springing executory interest is a future interest that follows a gap in possession or divests the estate of the transferor. If C’s interest does take in present possession, it will divest the interest of another transferee (B) rather than the transferor (O), and title will shift to C. QUESTION ID: P0004 Additional Learning

Question 42

Which of the following acts will not sever a joint tenancy?

A Testamentary disposition by one joint tenant.

B Inter vivos conveyance by one joint tenant.

C Suit for partition by one joint tenant.

D In a title theory state, the execution of a mortgage by one joint tenant.

Answer 42

A

A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant’s interest to another is inoperative as to joint tenancy property because when the testator dies (i.e., when the will becomes effective), his rights in the joint tenancy property are extinguished, and the will has no effect on them. A suit for partition by one joint tenant will sever a joint tenancy. The court will either divide the tract into parcels (partition in kind) or sell the property and divide the proceeds among the joint tenants in accordance with their ownership interests (partition by sale). An inter vivos conveyance by one joint tenant will sever a joint tenancy. The transferee takes the interest as a tenant in common and not as a joint tenant. In a title theory state, the execution of a mortgage by one joint tenant will sever a joint tenancy. In states following the lien theory, a mortgage is regarded as a lien on title, and one joint tenant’s execution of a mortgage on her interest does not by itself cause a severance. But in states following the title theory, a mortgage is regarded as a transfer of title, and the transfer destroys the unity of title and severs the joint tenancy. QUESTION ID: P0018 Additional Learning

Question 43

When property is held in joint tenancy or tenancy in common, which of the following is not a co-tenant’s right?

A Possess the entire estate

B Mortgage her interest

C Share in rents paid by third parties

D Compel contribution for the cost of improvements

Answer 43

D

Although a joint tenant or tenant in common may have a right to compel contribution from other co-tenants for the cost of necessary repairs, taxes, and payments due on mortgages, she does not have a right to compel contribution for the cost of improvements. Under the unity of possession, each co-tenant has a right to possess the entire estate subject to the equal right of her co-tenant. A co-tenant out of possession cannot bring a possessory action unless there has been an “ouster” (i.e., wrongful exclusion) by the co-tenant in possession. Although a co-tenant generally is not entitled to share in the rental value of the land, she does have a right to share in rents paid by third parties. A joint tenant or tenant in common may mortgage her interest. However, she may not encumber another co-tenant’s interest. Note that an individual spouse may not mortgage her interest in tenancy by the entirety property. QUESTION ID: P0019 Additional Learning