Unit 2.2 - Estates (from LTP) Flashcards
What is an estate?
A legal RELATIONSHIP someone has to real property.
An interest in real property, which may be possessory now or at some point in the future.
If you own property (freehold), lease property (non-freehold or leasehold) or are remainderman (property will be transferred to you in the future), then you have AN ESTATE in real property.
What is freehold?
In an estate, when you own property.
Freehold means ownership. Ownership comes in two varieties. Mostly “Fee”, which means if an owner has a fee relationship with the property, then they not only own it now but they can leave it to their heirs after they die. Their ownership will continue even after they die.
What is non-freehold?
In an estate, when you lease property (aka leasehold).
What is a remainderman?
In an estate, when property will be transferred to you in the future.
Which Estates are inheritable?
Fee Simple Absolute
Fee Simple Defeasible (absolute, conditional)
Pur Atre Vie
Which Estates are non-inheritable?
Martial Estates, created by statute
Conventional Life Estates, created by intention
Define Estovers.
The right to use timber for repairs or fuel. Life tenant cannot CAUSE waste.
What is a leasehold estate?
Tenant’s interested in a leased property.
The tenant has a “hold” on property. They have possession.
What is a leased-fee estate?
The landlord’s interest in a leased property. The owner gets a fee.
The owner has dual estates – freehold estate AND leased fee estate.
What is homestead exemption?
Protection from one property from certain unsecured debts.
In NC, $35k exemption (increases to $60k for widowed unmarried individuals).
What are types of leasehold estates?
- Estate for Years (definite end date)
- Estate from Year to Year (automatic renewal)
- Estate at Will (either party may terminate without notice)
- Estate Ends at Sufferance (lease ends and tenant won’t leave)
Ownership in Severalty
One owner (individual or entity) Fee to convey the property (unless married)
*When you see the word fee it means the current owner of the property has the legal right to leave it as an inheritance.
Ownership in Severalty makes life easy.
- One person has all rights
- One person gets to use property 100% of the time
- There is only one owner who approves sale of property
Fancy name for one owner, sole ownership. Freehold interest. Even though Severalty sounds like several, it’s just one. Instead you have severed all ties with other owners.
What is/are Tenants in Common? And an example of Tenants in Common?
- unlimited co-owners/concurrent owners
- each has an equal right of possession and use of the land.
- not legally required to be equal shares of ownership (percentages/portions), especially for testing purposes
- default mode of ownership for unmarried co-owners
- any owner can sell their share without the permission of the other owners
- NO RIGHT OF SURVIVORSHIP POSSIBLE w/ tenants in common
Tenants in common don’t have rights to survivorship.
Joint tenants can sell their share at any time without permission from other owner(s).
Condominium ownership is tenants in common. They own the building and the land in common. And if you die, it goes to your heirs, because you have that in common with them.
What is Joint Tenancy? And an example of Joint Tenancy?
Unlimited number of co-owners/concurrent owners [as joint tenants]
Allows for survivorship between non-married owners, but survivorship must be requested; not automatic
Joint tenants w/the right of the survivorship must purchase the property at the same time and request the right of survivorship in order for it to apply and be granted
Individual owners (in a joint tenancy concurrent ownership scenario) can sell their individual share without the permission of the other co-owners.
Typically equal shares, especially for testing purposes.
“you would not pass a joint to your heirs. if you are a ‘joint tenant’, then you would pass the ownership (joint…) to the surviving owners.” (Travis’ slideshow example)
For joint tenancy, all parties must be there when the party starts. If they come in late, they are tenants in common. With joint tenancy, you have to be part of the party from the beginning to get Joint Tenancy. Puff puff give, but only give to those who were there from the beginning. You don’t pass a joint to your kid, just like you don’t pass property to your kid in joint tenancy. It goes to the original joint tenants.
Example: Steve’s beach house. If he dies, he doesn’t pass the joint to his kids (heirs), he passes it to the original joint tenants.
What is Tenancy by Entirety? And what’s an example?
Limited to married couples; must be married at time of purchase.
Default ownership as it provides the most protection.
Rights of survivorship – automatically passes to the surviving spouse; cannot be defeated by a will
Divorce terminates tenancy by the entirety – will own in common
From the moment you get married, any future purchases qualify for Tenancy By the Entirety. Your spouse will be a 50% owner. No matter what. No question asked.
Key: Just because people are married after they get married does not make them Tenants by Entirety. It only applies to the future.
