System of Estates Flashcards
Motha Fukkin Property!
Present Interests
Fee Simple, Fee Tail
Requirements for Adverse Possession
Actual entry giving exclusive possession that is
open and notorious,
adverse and under a claim of right, and
continuous for the statutory period
Fee Simple
a permanent and absolute tenure of an estate in land with freedom to dispose of it at will, esp. in full fee simple absolute a freehold tenure, which is the main type of land ownership
Alienability restraint (-) effects
Make land unmarketable and not available for highest and best use
Perpetuate concentration of wealth in powerful families
Discourage improvements on land
Owner cannot get full benefits from improvements if cannot sell
Lenders will not lend since they will have no recourse
Prevent creditors from reaching the property even where credit extended based on owner’s enjoyment of the property.
Disabling restraint
withholds from the grantee the power of transferring his interest
Forfeiture restraint
provides that if grantee attempts to transfer his interest, it is conveyed to another person
Promissory restraint
requires grantee promise not to transfer his interest
Ex: no subletting
Contract Remedies
-Restatement allows partial restraints where they are reasonable in purpose, effect, and duration.
Heirs
persons who survive the decedent and are designated as intestate successors under state’s statute of descent.
a living person has no heirs (until death)
Issue
descendants, children and further descendants
Per stirpes (“by the stocks”): grandchildren who survive their parents get according to rights of their parents
Children born out of wedlock get from mother and from father if paternity acknowledged or proved
Ancestors
parents
Collaterals
blood relations who are neither descendants nor ancestors (brothers, sisters, rich uncles, cousins, etc…)
Escheat
overlord or state, today the state gets in absence of heirs
Fee Simple - Words of Creation
(1) Initially required words showing the land was heritable to be fee simple: “to A and his heirs”
(2) Now no longer need words of heritability to convey fee simple: “to A” sufficient
Fee Tail
- “to A and the heirs of his body.”
- Exists only four states: Delaware, Maine, Massachusetts, and Rhode Island
- Now can disentail simply by conveying a fee simple by deed to another.
- Cannot bar the entail by will.
- Note: grantor retains a reversion if there are no heirs
Effect of State Fee Tail Abolition on Fee Tail Conveyances
-Option 1 States
*Conveyance “to A and the heirs of his body” with a gift over to B treated as a fee simple conveyance to A.
*Option 1 state statutes automatically disentail (doing what A could do simply by selling in fee simple)
-Option 2 States
*Conveyance “to A and the heirs of his body” with a gift over to B treated as fee simple to A but B takes in fee simple at A’s death if at A’s death, A leaves no surviving issue.
*If there are surviving issue, A can devise to anyone.
Note, less alienable for A
Life Estate
“to A for life.”
If A transfers his life estate to B, B has a life estate pur autre vie (estate measured by the life of another), which expires upon the death of A (NOT B).
“to A for life, then to B forever”
A has a life estate
B has a remainder in fee simple
“To A and her heirs” with A’s child, B, in debt.
B has no interest for creditors to attach to and A can do whatever A wants to do, B has an unenforceable expectancy in inheritance
O, owner of Blackacre, has two children, A (daughter) and B (son). Subsequently B dies testate, devising all his property to W, his wife. B is survived by three children, B1 (daughter), B2 (son), and B3 (daughter). A1 (son) is born to A. Then O dies intestate.
Who owns in England in 1800; now in US?
1800 England: B2 as O’s heir owns Blackacre
Today in US: A (1/2); B1, B2, B3 share (1/2). W takes nothing because B did not survive O, is not O’s heir, and cannot devise any interest in Blackacre. A1 takes nothing by representation because A is still living.
O conveys Blackacre “to A and her heirs.” If A dies intestate without issue, will Blackacre escheat to the state?
Not if A has other heirs: ancestors or collaterals. Note, will not revert to O.
O conveys Blackacre “to A for life, remainder to B and her heirs.” B then dies intestate without heirs. A then dies. Who owns Blackacre?
B’s indefeasibly vested remainder in fee simple passes to the state upon B’s death. Upon A’s death, state’s remainder becomes possessory fee simple absolute.
Waste
Definition: when two or more persons have a right to a property – concurrently or consecutively – one should not be able to use the property in a manner that unreasonably interferes with the others expectations.
Note: The greater the interest A has in the property, the more freedom A has and the less protection available to B.
Affirmative waste: injurious acts that have more than trivial effect
Permissive waste: failure to take reasonable care of the property
3 Types of Leaseholds
1 - Term of Years
2 - Periodic Tenancy
3 - Tenancy at Will
Fee Simple Determinable (FSD)
Definition: a fee simple that may last forever or may come to an end upon the happening of an event in the future… Ends automatically when a stated event occurs.
Words of Creation: words with a durational aspect (words of purpose alone insufficient)
Associated Future Interest: “possibility of reverter”
Fee Simple Subject to a Condition Subsequent
Definition: a fee simple that may last forever or may be cut short or divested at the transferor’s election when a stated condition happens. Unless and until entry occurs, fee simple continues.
Words of Creation: conveyance of fee simple followed by words indicating divestment can follow an event occurring.
Associated Future Interest: “right of entry”
Fee Simple Subject to an Executory Limitation
Definition: a fee simple that, upon the happening of a stated event, is automatically divested by an executory interest in a transferee
Tracks a FSD and FSSCS in its creation, but the transferee rather than the transferor has the future interest.
Associated Future Interest:
“executory interest” – regardless of whether the transferee has an automatic right to possession or simply a right to enter.
Future Interests
- Reversion
- Possibility of Reverter
- Right of Entry
Note: a future interest is also a present interest in that it gives legally protected rights.
Future interest holders have certain rights to monitor and police the present possessors and to protect their rights.
Reversion
Definition: the interest left in an owner when he carves out of his estate a lesser estate and does not provide who is to take the property when the lesser estate expires.
When O transfers lesser estates and does not also transfer a vested remainder in fee simple, O has a reversion.
Note: reversions may not be certain to become possessory, but they are still called reversions, not possibility of reversion.
Possibility of Reverter
Definition: future interest retained in the transferor when a fee simple determinable (FSD) is created.
Corresponds to a Fee Simple Determinable
Right of Entry
Definition: when an owner transfers an estate subject to condition subsequent (FSSCS) and retains the power to cut short or terminate the estate, transferor has this right.
Corresponds to Fee Simple Subject to a Condition Subsequent
Remainders
Definition: a future interest created in someone other than the transferor that, according to the terms of its creation, will become a present estate (if ever) immediately upon, and no sooner than, the expiration of all prior particular estates created with it.
Created in someone other than transferor
Capable of becoming possessory immediately upon termination of prior estate
Follows a “particular” estate (one less than a fee simple)
Executory Interests
Definition: a future interest in someone other than the transferor that can take effect only by divesting another interest
There are springing and shifting interests
Shifting Executory Interests
Divests or cuts short some interest in another transferee
Springing Executory Interests
Divests or cuts short the transferor in the future
Interests Created in a Transferee
Vested Remainder
Vested Remainder
Requires:
remainder is given to an ascertained person, and
remainder is not subject to a condition precedent (other than the natural termination of the preceding estates)
Note: where ambiguous, the law has a preference for vested remainders
Types of Vested Remainders
- Indefeasibly Vested
- Vested Remainders Subject to Complete Divestment/Defacement
- Vested Remainders Subject to Open/Partial Divestment
Indefeasibly Vested
remainder is certain to become possessory in the future and cannot be divested. no condition subsequent can divest the interest interest is indivisible (the class of takers is closed)
Vested Remainders Subject to Complete Divestment/Defacement
Example: “to A for life, then to B and her heirs, but if B does not survive A to C and his heirs.”
Vested Remainders Subject to Open/Partial Divestment
First two requirements are met (Remainder is certain to become possessory in the future and cannot be divested. No condition subsequent can divest the interest), but more people can be added to the class of grantees.
Contingent Remainder
Exists when:
remainder is given to an unascertained person, or
remainder is contingent upon some event occurring other than the natural termination of the preceding estates.
Signifies that remainder is not ready to become possessory upon termination of preceding estates
Alternative contingent remainders exist where if one contingent remainder vests, the other cannot, and vice versa
Characteristics of Vested Remainders
-Accelerate into possession whenever preceding estate ends,
-are assignable (thus reachable by creditors),
-are not destroyed if not vested upon termination of preceding estate, and
-are not subjected to the Rule Against Perpetuities.
Requires:
-remainder is given to an ascertained person, and
-remainder is not subject to a condition precedent (other than the natural termination of the preceding estates)
-Note: where ambiguous, the law has a preference for vested remainders.
Characteristics of Contingent Remainders
Exists when:
remainder is given to an unascertained person, or
remainder is contingent upon some event occurring other than the natural termination of the preceding estates.
Signifies that remainder is not ready to become possessory upon termination of preceding estates
Alternative contingent remainders exist where if one contingent remainder vests, the other cannot, and vice versa.
Dead Hand Control
Deceased “earned,” kept control, did not lose, or otherwise had the money to “give” to the living.
Incentive to earn would be harmed if society did not allow inheritance, or more to the point here, did not allow the deceased to exercise control over the inheritance.
Perpetual Trusts
Prevents heirs from getting the inheritance – a way of setting aside money to be used for the benefit of a certain entity, person, or group of people known as the beneficiaries. This money is managed by a trustee who may or may not be the beneficiary. A perpetual trust is a type of trust that passes from generation to generation so that the children of the original beneficiaries can also benefit from the trust. Trusts are often used as a legal way to avoid taxes and keep money and property from being taken by creditors in the event of legal trouble.
A trust is created when one person, sometimes called the originator, names one or several beneficiaries. These are often children of the originator, but they can also be other family members or even charity organizations. A manager is chosen for the trust, called a trustee. This person can be a friend or family member, but can also be a lawyer, attorney, or accountant. The income and principal created by the trust are used for the benefit of each named beneficiary.
Words creating a FSD
- So long as
- as long as
- until
- while
- during
Words creating a FSSCS
- if
- but if
- provided
- however
- on the condition
- subject to the condition
