Property > Estates in Land (Present and Future Interests)

Question 1

Estates in Land > A. Present Possessory EstatesA present possessory estate is ________.

Answer 1

an interest in land that gives the holder the right to present possession.

Question 2

Estates in Land > A. Present Possessory Estates > 1. Fee Simple AbsoluteA fee simple absolute is the largest estate recognized by law. What are the ways in which this interest can be transferred?

Answer 2

1. sold2. divided3. devised4. inherited

Question 3

Estates in Land > B. Future InterestsA future interest gives its holder the right or possibility of future possession of an estate. It is a __________

Answer 3

present, legally protected right in property

Question 4

Estates in Land > B. Future InterestsFive types of future interest?

Answer 4

1. Possibility of reverter2.Right of entry3. Reversion4.Remainder5. Executory interest

Question 5

Estates in Land > B. Future InterestsWhich three types of future interest are created in grantor i.e. reversionary interests?

Answer 5

1. Possibility of reverter2. Right of entry3. Reversion

Question 6

Estates in Land > B. Future InterestsWhich two types of future interest are created in someone other than the grantor?

Answer 6

1. Remainder2. Executory interests

Question 7

Estates in Land > B. Future InterestsWhat is a reversionary interest?

Answer 7

A future interest in Grantor

Question 8

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantora. What two conditions are always created in future interest in GRANTOR?

Answer 8

1. Possibility of reverter (FSD) and2.Rights of entry (RSSCS)See, supra, in connection with defensible fees

Question 9

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantorb. What is a Reversion?

Answer 9

The estate left in a grantor who conveys less than she owns e.g. to “A” for life or to “A” for 10 years. Grantor has the reversion

Question 10

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantorOther elements of reversion?

Answer 10

All landlords have reversion.Arises by law; impliedAlienable, devisable and inheritable

Question 11

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantor>ReversionFor what can the reversioner sue?

Answer 11

1. Waste2. Tortious damage to the reversionary interest

Question 12

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantor>ReversionAre reversionary interests considered vested?

Answer 12

Yes

Question 13

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantor>ReversionAre reversionary interests subject to RAP?

Answer 13

No

Question 14

Estates in Land > B. Future Interests> RemaindersWhat is a remainder?

Answer 14

A future interest in a third person that can become possessory on the natural expiration of the preceding estate

Question 15

Estates in Land > B. Future Interests>RemainderWhat else about a remainder?

Answer 15

Along with executory interests, ALWAYS created in someone OTHER THAN the grantor

Question 16

Estates in Land > B. Future Interests»RemainderWhat question should you ask if there is a future interest in a third party?

Answer 16

Is it a remainder OR an executory interest?

Question 17

Estates in Land > B. Future Interests>RemainderExamples of vested and contingent remainders

Answer 17

A remainder can be either vested or contingent1. To A for life, then to A’s first born * Contingent remainder until A has a child, then becomes a vested remainder. * Just by being born, baby gets remainder. A doesn’t have to die first.2. To A for life , then to B’s children * Contingent until A has at least one child; then becomes vested, subject to “open” (?) * a class gift

Question 18

Estates in Land > B. Future Interests>RemainderWhat is the first rule for a remainder and give an example?

Answer 18

(I) Created at the same time and same instrument as the prior estatee.g. Grantor conveys “to A for life then to B”.It is NOT Grantor conveys “to A for life” and then later Grantor conveys her reversion to B. This is still a reversion.

Question 19

Estates in Land > B. Future Interests>RemainderWhat is the second rule for a remainder and give an example?

Answer 19

Prior estate(s) must be life estatese.g. “To A for life , then to B”.It is NOT “to A as long as A sells no liquor on the land, and then to B”. The prior estate is a fee simple, not a life estate, so B has a FUTURE INTEREST not a remainder.

Question 20

Estates in Land > B. Future Interests> RemainderRemainders only follow what type of estate?

Answer 20

Remainders ONLY follow life estates.

Question 21

Estates in Land > B. Future Interests>RemainderWhat is the third rule for a remainder and give an example?

Answer 21

Does not “cut short” the prior estateRemainders only take possession, by natural death.NOT “to A for life, but upon A’s death or divorce to B”. B’s interest will cut short A’s if A is divorced, so B has a future interest, not a remainder.

Question 22

Estates in Land > B. Future Interests> RemainderWhat is the fourth rule for a remainder and give an example?

Answer 22

No built-in time gaps allowed between prior estate and the future interest.NOT to “A for life and as soon as A’s estate is probated, then to B”. There is a time gap, so B has a future interest.

Question 23

Estates in Land > B. Future Interests>RemainderMust all 4 rules be met?What happens if they are not?

Answer 23

Yes, all for 4 must be met to be a remainder. If all 4 are not met then it is not a remainder, but a future interest.

Question 24

Estates in Land > B. Future Interests>RemainderWhat is an indefeasibly vested remainder?

Answer 24

It is created in AN EXISTING AND ASCERTAINED PERSON, and NOT subject to a condition subsequent.Remainderman has right to immediate possession upon a normal termination of a preceding estate..

Question 25

Estates in Land > B. Future Interests>RemainderIs an indefeasibly vested remainder subject to divestment or dimunition?

Answer 25

No

Question 26

Estates in Land > B. Future Interests>RemainderWhat is a vested remainder subject to open and give an example?

Answer 26

It is vested remainder created in a class of persons (e.g. children) that is CERTAIN TO BECOME POSSESSORY, BUT SUBJECT TO DIMUNITION (e.g. by the birth of additional persons who will share in the remainder of a class). e.g. O conveys to A for life, then to B’s children. A and B are living and B has 1 child, C. C has a vested remainder, subject to open.

Question 27

Estates in Land > B. Future Interests>RemainderWhat is a Vested Remainder, subject to Total Divestment and give an example?

Answer 27

It is a vested remainder subject to a CONDITION SUBSEQUENTe.g. O “to A for life, then to B and his heirs; but if B dies unmarried, then to C and his heirs.B has a vested remainder subject to complete divestment by C’s executory interest.

Question 28

Estates in Land > B. Future Interests> >RemainderWhat is a Contingent Remainder?

Answer 28

Remainders created in UNBORN OR UNASCERTAINED PERSONS, or subject to a CONDITION PRECEDENT

Question 29

Estates in Land > B. Future Interests>Remainder>Contingent RemainderWhat is a Condition Precedent?

Answer 29

A condition is precedent if it must be satisfied BEFORE the remainderman has a right to possession.

Question 30

Estates in Land > B. Future Interests>Remainder>Contingent RemainderGive an example of Subject to a condition precedent.

Answer 30

O to “A for life, then to B and his heirs if B marries C”. B’s remainder is contingent because he must marry C before can take possession (condition precedent).

Question 31

Estates in Land > B. Future Interests>Reversionary Interest>future interests in grantor>Remainder>Contingent RemainderWhat are unborn or unascertained persons?

Answer 31

A remainder created in unborn or unascertained persons is CONTINGENT because until the remainderman is ascertained; no one is ready if the preceding estate ends.

Question 32

Estates in Land > B. Future Interests >Remainder>Contingent RemainderGive an example of unborn or unascertained persons.

Answer 32

O “ to A for life then to the CHILDREN of B. If B is childless at the time, the remainder is contingent.

Question 33

Estates in Land > B. Future Interests>Remainder>Contingent RemainderWhat is Destruction of Contingent Remainders?

Answer 33

O to “A for life, then to B if she reaches age 21”.A common law, contingent remainder (in this case B’s remainder) is destroyed if it failed to vest before or upon termination of the preceding freehold estate.

Question 34

Estates in Land > B. Future Interests>Remainder>Contingent RemainderMany states have ABOLISHED the Destructibility of Contingent Remainder rule. What happens in these states?

Answer 34

B’s interest is converted to an EXECUTORY INTEREST upon A’s death because it will divest O’s reversionary estate when B turns 21.

Question 35

Estates in Land > B. Future Interests>Remainder>Merger to destroy a contingent remainderWhat is a merger to destroy a contingent reminder?

Answer 35

When one person acquires all of the present and future interests in land EXCEPT a contingent remainder; under common law, the contingent remainder is destroyed.

Question 36

Estates in Land > B. Future Interests>Remainder>Merger to destroy a contingent remainderGive an example of a contingent reminder.

Answer 36

O to “A for life, then to B’s children”. If before B has any kids O purchases A’s life estate, O will have a life estate pur autre vie AND a reversion.These interests MERGE and the contingent remainder in B’s kids is destroyed.

Question 37

Estates in Land > B. Future Interests>Remainder>Merger to destroy a contingent remainderWhat is the TIP for a merger to destroy a contingent remainder?

Answer 37

When considering whether estates merge to destroy a contingent remainder, remember that IF the life estate and the next vested interest were created by the SAME INSTRUMENT, there is NO merger. This would defeat the grantor’s obvious intent.

Question 38

Estates in Land > B. Future Interests>Remainder>Rule in Shelly’s CaseWhat is the Rule in Shelley’s Case?

Answer 38

It is the Rule Against Remainders in GRANTEE’S heirs. Rule was abolished in most states.At common law, if the same instrument created a life estate in A and gave the remainder only to A’s heirs, the remainder wasn’t recognized.”A” took the life estate and remainder.

Question 39

Estates in Land > B. Future Interests>Remainder>Doctrine of Worthier Title (DOWT)What happens in the Doctrine of Worthier Title?

Answer 39

Under DOWT, a remainder in GRANTOR’S heirs is invalid and becomes a reversion in the grantor.O grants Blackacre “ To A for life, then to the heirs of O”.Under DOWT, A has a life estate and O a reversion.

Question 40

Estates in Land > B. Future Interests>Remainder>Doctrine of Worthier Title (DOWT)Do DOWT generally have a rule of construction?

Answer 40

It doesn’t apply if an intent to create a remainder in heirs has been clearly manifested.

Question 41

Estates in Land > B. Future Interests>Remainder>Doctrine of Worthier Title (DOWT)Does DOWT apply to wills?

Answer 41

NO. DOWT applies to intervivos transfers, and only if word “heirs” is used.

Question 42

Estates in Land > B. Future Interests> Executory InterestsWhat is an Executory Interest?

Answer 42

Future Interests in third parties that either divest a transferee’s preceding freehold estate (shifting interests) or follow a gap in possession or shortcut a grantor’s estate (springing interest).

Question 43

Estates in Land > B. Future Interests> Executory Interest>Shifting Executory InterestsWhat is SHIFTING executory interests?

Answer 43

Characterized by creating future interests in 2 or more grantees.To “A” until (or so long as: but if, etc)…, and then to B.First, possession to A, but then if something happens, possession to B.B has a shifting executory interest because it divests a transferee’s (A’s) preceding estate.

Question 44

Estates in Land > B. Future Interests> Executory Interest>Springing Executory InterestsWhat is SPRINGING executor interest?

Answer 44

Only ONE grantee gets a future interest. Grantor keeps possession until that time.To A, to take possession on A’s 21st birthday, when A graduates, etc. or some other date of event).Grantor is not giving someone a prior interest, just a future interest based on a future event.

Question 45

Estates in Land > B. Future Interests> Executory Interest>Springing Executory InterestsTIP: Are executory interests considered vested?

Answer 45

No

Question 46

Estates in Land > B. Future Interests> Executory Interest>Springing Executory InterestsTIP: Are executory interests subject to RAP and why?

Answer 46

Because they are not considered vested, they are subject to RAP.

Question 47

Estates in Land > B. Future Interests> Executory Interest>Springing Executory InterestsTIP: Are executor interests destructed?

Answer 47

No. Executory interests are not destructed.

Question 48

Estates in Land > B. Future Interests> Executory Interest>Springing Executory InterestsTIP: What happens when a third party future interest does not follow the NATURAL termination of the preceding estate?

Answer 48

it must be an EXECUTORY Interest.

Question 49

Estates in Land >C. Rule Against Perpetuities>What is the Rule against Perpetuities?

Answer 49

NO interest in property is valid unless it must vest, if at all, no later than 21 years after some life in being (“measuring life”) at the creation of the interest. If there is any possibility that the interest might vest more than 21 years after a life in being, the interest in void.

Question 50

Estates in Land >C. Rule Against Perpetuities>What five things does RAP apply to?

Answer 50

1. Contingent remainders2.Executory interests3. Class gifts4. Options to buy land5.Rights of first refusal to buy land UNLESS held by a lessee under a lease, and not separated from the leasehold interest.

Question 51

Estates in Land >C. Rule Against Perpetuities> Options to buy landIf person is less than 21 years old what happens?

Answer 51

Void at outset if less than 21 years.

Question 52

Estates in Land >C. Rule Against Perpetuities> Options to buy landIf a commercial transaction is measuring life applicable?

Answer 52

Measuring life is inapplicable in commercial transactions.

Question 53

Estates in Land >C. Rule Against Perpetuities>Rights of first refusal to buy land .Rights of first refusal to buy land .- points to know

Answer 53

1. Is a form of option2. First dibs if someone offers to buy it (on same terms)3. Applies UNLESS held by a lessee under a lease, and not separated from the leasehold interest.e.g. I give you an option as a tenant in a lease. The lease shields the RAP IF the option time is < or = the lease term.

Question 54

Estates in Land >C. Rule Against PerpetuitiesWhat does RAP NOT apply to?

Answer 54

1. Vested remainders (unless to a class).2. ANY future interest created in a GRANTOR ( e.g. reversion, possibility of reverting, right of entry)

Question 55

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationWhat is the Rule?

Answer 55

A future interest covered by the RAP is VOID unless it is certain to vest or fails within 21 years after some life in being.

Question 56

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationGive an example.

Answer 56

To A for life, then to B for life if and when B ever passes the bar exam to C.

Question 57

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationIn the example: To A for life, then to B for life if and when B ever passes the bar exam to C. What are the implications to A as it relates to RAP?

Answer 57

RAP doesn’t apply to A, because his life estate is a PRESENT interest.

Question 58

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationIn the example: To A for life, then to B for life if and when B ever passes the bar exam to C. What are the implications to B as it relates to RAP?

Answer 58

B has a CONTINGENT remainder, since it is subject to a condition precedent “if…).

Question 59

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationIn the example: To A for life, then to B for life if and when B ever passes the bar exam to C. When is B’s remainder certain to vest or fail?

Answer 59

By the end of B’s life (because he can’t pass the bar after his death).Hence B’s remainder is valid under RAP.By using B’s life as a measuring life because he was alive at granting.

Question 60

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationIn the example: To A for life, then to B for life if and when B ever passes the bar exam to C. What are the implications to C as it relates to RAP?

Answer 60

C has a vested remainder, and it is NOT to a class. So RAP has no effect on it; it is perfectly valid.

Question 61

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life. (assume A alive with 2 daughters).What interest does the daughter have?

Answer 61

The daughter has a contingent remainder becausethe identity of the eldest surviving daughter is presently unascertained AND because there is a CONDITION PRECEDENT. A must die before the daughter for the remainder to vest. Could be either that makes it contingent.

Question 62

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life. (assume A alive with 2 daughters).When is A’s eldest surviving daughter’s remainder certain to vest of fail? Is it valid under RAP?

Answer 62

When A dies. Hence it is valid under RAP

Question 63

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life, then to the Red Cross if and when it ever affiliates with United Way. Assume A alive with 2 daughters.What does the daughter have and why?

Answer 63

She has a contingent remainder -Because the identity of the eldest daughter is presently UNASCERTAINEDAND because there is a CONDITION PRECEDENT.A must die before the daughter for the remainder to vest (AML check this).Could be EITHER that makes it contingent.

Question 64

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life, then to the Red Cross if and when it ever affiliates with United Way. Assume A alive with 2 daughters.When is A’s eldest surviving daughter’s remainder certain to vest or fail? Is it valid under RAP?

Answer 64

When A dies.It is valid under RAP.

Question 65

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life, then to the Red Cross if and when it ever affiliates with United Way. Assume A alive with 2 daughters.What does the Red Cross have and why?

Answer 65

It has a contingent remainder because it is subject to a condition precedent. Red Cross must affiliate with United Way.

Question 66

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life, then to the Red Cross if and when it ever affiliates with United Way. Assume A alive with 2 daughters.When is the Red Cross’s remainder certain to vest or fail? Is the Red Cross’s remainder subject to RAP?

Answer 66

When the Red Cross affiliates with United Waya) Is this certain to happen within the life of any person whom we can be sure is living now? Nob) Is it certain to happen 21 years after the death of any such persons? NoIt is void under RAP, so we cross off the language.

Question 67

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo A for life, then to A’s eldest surviving daughter for her life, then to the Red Cross if and when it ever affiliates with United Way. Assume A alive with 2 daughters.What happens after the Red Cross language is removed?

Answer 67

There are now 2 life estates after the RAP. A has a reversion that is impliedto A to A’s eldest surviving daughter

Question 68

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationDoes RAP apply to the 2 charities rule?

Answer 68

RAP does not apply.To the Cancer Society, but if it ever ceases to support cancer research, then to the Heart Fund.

Question 69

Estates in Land >C. Rule Against Perpetuities>Rule and ApplicationTo the Cancer Society, but if it ever ceases to support cancer research, then to the Heart FundWhat happens to the interests in the 2 charities rule?

Answer 69

ALL interests go to charities.Heart Funds executor interest in VALID

Question 70

Estates in Land >C. Rule Against Perpetuities>Rule and Application>Wait and See StatutesWhat analysis should you do if there is no common law RAP, but rather a statutory modification of RAP?

Answer 70

1. Apply common law rule2. If interest void, wait 90 years to see if future interest ACTUALLY vests or fails (unless they give a time >90 years).3. If after 90 years (“wait and see”) still not vested/failed, VOID.

Question 71

Estates in Land >Restraints on AlienationWhat is the Rule against Restraint on Alienation?

Answer 71

Generally any restriction on the transferability of a legal interest is void

Question 72

Estates in Land >Restraints on AlienationWhat is Restraint on Alienation?

Answer 72

Restraint on Alienation is a provision that prevents an owner from transferring its interest in land. Don’t confuse with restraint on USE.

Question 73

Estates in Land >Restraints on AlienationTraditionally what are the three types of Restraint on Alienation?

Answer 73

1. Forfeiture restraints2.Promissory restraints3.Disabling restraints

Question 74

Estates in Land >Restraints on AlienationWhat is a forfeiture restraint?

Answer 74

Occurs where an attempted transfer forfeits the interest”To A , but if A ever transfers this land without my consent, I may re-enter and terminate the estate.”

Question 75

Estates in Land >Restraints on AlienationWhat is a promissory restraint?

Answer 75

Occurs where an attempted transfer breaches a covenant.”To A, but A agrees and covenants never to transfer this land without my consent.”

Question 76

Estates in Land >Restraints on AlienationWhat is a disabling restraint?

Answer 76

Occurs where attempted transfers are ineffective ( i.e. the grantee has no power to transfer)”To A, but if A ever attempts to transfer this land without my consent, the transfer shall be null and void”