V. Estates And Future Interests + VI. Concurrent Ownership and Marital Property

Question 1

Fee Simple Absolute

Answer 1

A Fee Simple Absolute is an interest in land where the land is owned completely, without any limitations or conditions.

Question 2

Life Estate

Answer 2

A life estate is a present estate that lasts for the duration of the grantee’s life.
Life estate is freely transferrable during the life of the grantee, but the estate is not devisable or descendible.
Companies cannot hold life estates.
A Life Estate Pur Autre Vie is
O convey “to G for the life of H”
O conveys “to G for as long as H lives.”
O conveys “to G for the life of G’s only child H”
O conveys “to G for life” then G conveys her interest to H

Question 3

Fee Tail

Answer 3

To “A and the heirs of his body.”
An owner could keep land within the family for generations
Almost extinct in the United States (except DMMR States - Delaware, Maine, Massachusetts & Rhode Island)

Question 4

Fee Simple Determinable

Answer 4

A Fee Simple Determinable is an estate that will automatically terminate when a certain event or condition occurs or fails to occur. It uses durational language like ‘so long as’, ‘while’ ‘until’ ‘during’.
It is freely alienable, devisable and descendible. The grantor retains a possibility of reverter.
For example: To A for as long as the property is used for a museum.

Question 5

Fee Simple Subject to a Condition Subsequent

Answer 5

A Fee Simple Subject to a Condition Subsequent is a present possessory estate that may terminate upon the occurrence or nonoccurrence of a stated future event. The grantor retains a right to reenter and reclaim the property. It is freely alienable, devisable and descendible. Uses words like provided that, on the condition that, but if, however if, provided however that

Question 6

In a transfer by deed, what is the transaction called?

Answer 6

A conveyance or a grant.

Question 7

Fee Simple Subject to an Executory Limitation

Answer 7

A Fee Simple Subject to an Executory Limitation is a present possessory estate that is followed by a future interest in a third party. The grantor does NOT retain a future interest, which is why the FSSEL is differentiated from the FSD and the FSSCS.
To April and her heirs as long as liquor is never sold on the premises, and if so, then to Ron and his heirs.
O conveys “to G and her heirs on the condition that Alaska does not secede from the United States, then to M and her heirs.”

Question 8

In a transfer by deed, who are the two parties?

Answer 8

Person who makes transfer: grantor

Recipient: grantee

Question 9

In a transfer by will, what is the transaction called?

Answer 9

Devise

Question 10

In a transfer by will, what is the verb?

Answer 10

Devise

Question 11

In a transfer by will, who are the parties?

Answer 11

Person who wrote the will = testator

Person who receives the property = devisee

Question 12

In a transfer by intestate succession (no will) what is the verb used to describe the transaction and what is the recipient called?

Answer 12

Descend;

Heir

Question 13

If you have no will and no heirs, what happens to your property?

Answer 13

It escheats to the State.

Question 14

Can a company hold a Fee Simple Absolute?

Answer 14

Yes. You can devise your land to a company. However, you cannot give a company a Life Estate, because companies have no lives.

Question 15

What are some examples of Life Estates Pur Aurtre Vie?

Answer 15

O convey “to G for the life of H”
O conveys “to G for as long as H lives.”
O conveys “to G for the life of G’s only child H”
O conveys “to G for life” then G conveys her interest to H

Question 16

Q
What are the three types of waste?

Answer 16

Voluntary waste
Permissive waste
Ameliorative waste

Question 17

What is voluntary waste?

Answer 17

Voluntary waste occurs when there is an affirmative act that significantly reduces the value of the property.

Question 18

What is permissive waste?

Answer 18

Permissive waste happens when there is a failure to take reasonable care to protect the estate.

Question 19

What is a restraint on alienation?

Answer 19

A restraint on alienation is any attempt to unreasonably prohibit the ability to transfer or sell property.

Question 20

What is a forfeiture restraint?

Answer 20

A forfeiture restraint is a restraint for which if the transferee attempts to transfer or sell the property they will forfeit their rights to the property. A court will invalidate any language that provides a forfeiture restraint.
O conveys “to B, but if B ever tries to sell the estate, then to D.”

Question 21

What is a disabling restraint?

Answer 21

A restraint that prevents the transferee from transferring her interest.
O conveys “to B, and any conveyance by B is void.”

Question 22

What is a promissory restraint?

Answer 22

A restraint that stipulates that the transferee promises not to transfer her interest.
O conveys “to B, and B promises that she will not sell the estate.”

Question 23

What is the duration of B’s estate? O conveys to A and his heirs. Then A conveys to B for 2 years. One year later A dies.

Answer 23

B’s estate is unaffected by A’s death. B has one more year of possession left.

Question 24

How can a landowner control the future of her property after she transfers her property?

Answer 24

Fee Simple Subject to a Condition Subsequent

Fee Simple Determinable

Question 25

How does an Absolute estate end?

Answer 25

Naturally

Question 26

How does a Defeasible estate end?

Answer 26

Unnaturally

Question 27

What is the consequence of the distinction here? Suppose O grants a defeasible fee simple in Orangeacre, an orange grove, to D, and the triggering event is D’s consumption of alcohol. D first drinks alcohol in 2017, but remains in possession until O brings suit in 2020.

Answer 27

If D’s estate was an FSD, it ended in 2017, and D owes rent to O for three years. However, if the estate was a FSSCS, D owes no rent until O retakes the premises.

Question 28

Courts will generally construe an estate as a fee simple subject to a condition subsequent. Why?

Answer 28

To avoid forfeiture!

Question 29

What is a term of years?

Answer 29

An estate of fixed duration. A present possessory interest of fixed duration. Grantor retains a reversion.

Question 30

Estate begins

Answer 30

And estate ends

Question 31

What is a reversion?

Answer 31

A reversion is a future interest in the transferor which can become possessory upon the expiration of a life estate, term of years or contingent remainder. A reversion generally follows a contingent remainder because someone must hold seisin in the estate at all times (someone must be in possession).

Question 32

What does a possibility of reverter do?

Answer 32

A possibility of reverter is a future interest which automatically divests the grantee of her possessory interest upon the end of fee simple determinable estate.

Question 33

If there is ambiguity in the conveyance’s language, which estate do courts prefer?

Answer 33

A fee simple subject to a condition subsequent, because there are no automatic forfeitures. This presumption is more in favor of the transferee and more in favor of the modern marketplace.

Question 34

Which present possessory interest do we apply the doctrine of waste to?

Answer 34

Life estate.

Question 35

What is a future interest?

Answer 35

An existing, nonpossessory property right that may become possessory in the future.

Question 36

What are the three types of future interests for a grantor?

Answer 36

A reversion; A possibility of reverter; A right to reenter and reclaim the property.

Question 37

What are the two main types of future possessory interests for a grantee?

Answer 37

Remainder (indefeasible or contingent) - Executory interest (springing or shifting)

Question 38

What are the three types of vested remainders?

Answer 38

1. Indefeasible 2. Subject to divestment 3. Subject to open

Question 39

What future interest is there when an owner conveys a fee simple absolute?

Answer 39

None.

Question 40

What is a remainder?

Answer 40

A future interests that “waits patiently” until the termination of the preceding possessory estate. Possession is not guaranteed, it cannot divest any interest in a prior transferee.

Question 41

What is an indefeasibly vested remainder?

Answer 41

A future possessory interest in which the interest is conveyed to an ascertainable person and is not subject to a condition precedent

Question 42

Who counts as an ascertainable person?

Answer 42

- People alive and ascertainable - NOT heirs - NOT kids in womb

Question 43

What is a contingent remainder? What is a contingent remainder subject to a condition precedent?

Answer 43

A contingent remainder is a future interest in an unascertainable person OR a future interest that is subject to a condition precedent O conveys Greenacre “to B for life, then to the heirs of D.” Subject to a condition precedent (stated event must occur before) Condition precedent = something that must happen before the remainder can become possessory (not natural expiration)

Question 44

What is a condition precedent?

Answer 44

Something that must happen before the remainder can become possessory (not natural expiration)

Question 45

What is a vested remainder subject to divestment?

Answer 45

A future possessory interest that is vested but it can be lost. “It’s yours, but you’ll lose if it so and so occurs” Example: O conveys “to B for life, then to D, but if D smokes marijuana during B’s lifetime, then to E.”

Question 46

What is a Vested remainder subject to open?

Answer 46

A vested remainder held by one or more living members of a group orclassthat may be enlarged in the future. Example: O conveys Greenacre “to B for life, then to D’s children.” At the time, D has two living children, E and F.

Question 47

How does a class close (in a vested remainder subject to open)?

Answer 47

Natural Closing – an event that prevents further creation of members (i.e. death)To Jorge for life, then to the children of Pepe. Class will close at Pepe’s death. OR Rule of Convenience – class closes the time designated in the conveyance for distribution To Jorge for life, then to the children of Pepe. Class will close at Jorge’s death.

Question 48

Remember living cannot be a contigency

Answer 48

1. O conveys “to D for life, then to B, but if B does not survive D, then to E.” 2. D – Life estate 3. B – Vested remainder subject to divestment 4. E – Shifting executory interest

Question 49

What does a kid in the womb have ONLY AFTER it is born? O to A for life, then to A’s children. (A’s wife is pregnant with their first child.)

Answer 49

A vested remainder subject to open.

Question 50

What does O have O to A for life, then to B, but if B ever opens a restaurant in San Diego, then to O.

Answer 50

Shifting executory interest

Question 51

Can there be more than one condition precedent/conditions in a contingent remainder?

Answer 51

Yes. O conveys “to G for life, then if M marries, to M’s oldest son.”M has no children.” Two conditions: If M Marries, on condition that M has a son.

Question 52

What is an alternative contingent remainder?

Answer 52

Alternative Contingent Remainders occur when each transferee waits patiently for possession, but only one gets it. Their conditions precedent are opposite of one another. One vesting precludes the other from vesting. Even though alternative contingent remainders are mutually exclusive and will exhaust all possibilities, the transferor still carries a reversion because at common law, contingent remainders were destructible. Example: O to A for life, then to B if B has graduated from law school, but if B has not graduated from law school, then to C.

Question 53

What is an executory interest?

Answer 53

A future interest that can only take effect by divesting (cutting off) another’s interest Note: When you see a third-party sneaking into the conveyance, there is going to be an executory interest

Question 54

What is the definition of the Rule Against Perpetuities (RAP)?

Answer 54

No interest is good unless it must vest, if at all, no later than twenty-one years after some life in being at the creation of the interests.

Question 55

What three types of future interests are subject to the Rule Against Perpetuities?

Answer 55

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

Question 56

Label the interests O conveys “to D for life, then to B, but if B does not survive D, then to E.”

Answer 56

i. D – Life estate ii. B – Vested remainder subject to divestment iii. E – Shifting executory interest

Question 56

Who are the “lives in being” in a Rule Against Perpetuities analysis?

Answer 56

Must be persons who are alive at the time the instrument becomes effective (a child in gestation is considered if later born alive)

Question 56

Q If you see a Fee Simple Determinable followed by a Condition Subsequent what do you do? Example: O to A and the heirs of her body SO LONG AS the land is farmed, BUT IF the land ceases to be farmed, then back to O.

Answer 56

The property market prefers a Fee Simple Subject to a Condition Subsequent, so choose this over a Fee Simple Determinable.

Question 56

Label the interests T devises “to A for life, then to T’s children.” T is 80 and has no children.

Answer 56

a. A – LE b. T’s children – Contingent Remainder c. T - reversion

Question 56

O conveys “to A for life, then to B for life if B learns how to play the piano, then to C for life if C learns how to play the trombone. What is C’s interests?

Answer 56

B and C - contingent remainders in life estate

Question 57

O to A for life, then to B and his heirs, then to C and his heirs. Who has what?

Answer 57

1. A – LE 2. B – IVR 3. C- nothing Note - no one can have anything after it goes to someone and their HEIRS

Question 58

Name the interest Google has O conveys “to F for life.” F then conveys her interest “to Google, Inc.”

Answer 58

Life estate pur autrie vie

Question 59

Name the interest. To April for life, but if she moves to New York, then I may take my estate back

Answer 59

Life Estate Subject to a Condition Subsequent

Question 60

What are the interests? a. O to A for life, then to B, but if B ever owns an insurance agency, then to O. b. O to A for life, then to B; however, if B divorces after A dies, then to O.

Answer 60

i. A has a life estate (present possessory interest/estate) ii. B has a vested remainder subject to divestment (future interest. Will vest when A dies. We can point to B and there is no condition precedent, so it is a vested remainder. However, B can be divested at some point in time—if he ever owns an insurance agency or if he divorces—so it’s a vested remainder subject to divestment) iii. O has a right to rentry. It’s going to O, not to a 3rd party (in which case there would be an executory interest). To make it real, fast forward, and say A dies. B then has a fee simple subject to condition subsequent (FSSCS), and in a FSSCS, the grantor retains the right to reenter.

Question 61

Name the interests. O devises “to G for life, then to H, but if H does not survive G, then to I.”

Answer 61

a. G – LE b. H and I – are ACR c. O has nothing – the interest either goes to H and his heirs or to I and his heirs

Question 62

Name the interests. Bob for life, then to Dan and his heirs, but if Dan does not survive Bob, to Marshall and her heirs.

Answer 62

Alternative contingent remainders

Question 63

Name the interest. O devises “to my grandchildren WHO reach age 21.”

Answer 63

A The grandchildren have a contingent remainder, some of them may be 21 at the time the instrument is effective; some may not be 21. Note that the interests vest at the time the instrument is effective; not 10 years later. It is contingent because they are not yet ascertainable. They have to be 21 at the time the instrument is effective. If this said “WHEN” they reach - then they are cutting off, and it’s an executory interes

Question 64

O conveys “to F for life, and then to G for life.”

Answer 64

O has a reversion. a. F has a life estate b. G has an indefeasibly vested remainder in life estate

Question 65

O to A for life, then to B’s heirs, but if B has no heirs, then to C’s heirs.

Answer 65

Alternative contingent remainders

Question 66

What is the ONLY language that can trigger joint tenancy with right of survivorship rules?

Answer 66

“joint tenants with right of survivorship” Have to see word “survivorship”

Question 67

What is a tenancy in common?

Answer 67

- Undivided, fractional interest in the property -Each has the right to use and possess the whole parcel - Proceeds of sales are proportionate shares - Freely alienable, transferable, and devisable - If an owner dies, ownership is transferred to the person named in their will.

Question 68

Here is an example of a tenancy in common.

Answer 68

A & B are “tenants in common” in fee simple absolute in Greenacre, a 100-acre farm. A holds a 75% undivided interest and B holds the remaining 25%. B is entitled to possession of all 100 acres, as is A. However, upon sale of Greenacre, the proceeds will be divided in proportion to the fractional shares.

Question 69

Here are other examples of a tenancy in common.

Answer 69

- O conveys Greenacre “to A and B” - O conveys Greenacre “to A and B as tenants in common” - O dies intestate, leaving to children A and B as her only surviving relatives.

Question 70

What is a joint tenancy with a right of survivorship?

Answer 70

Joint tenancy with a right of survivorship is a type of property ownership giving co-owners survivorship rights upon another co-owner’s death. It is neither devisable or descendible, and the joint tenants have an undivided right to use and possess property. A creation of a joint tenancy requires the four unities, and a transfer of interest severs the joint tenancy. If interest is transferred, the new owner has a tenancy in common with the others. If an owner dies, ownership is transferred to the remaining owner. PITT Possession - the right to possession. Interest - must hold equal type of interest (FSA) - not equal shares of interest Title - must receive interest via same instrument. Time - ownership must be received at the same time.

Question 71

What is an example of violating the unities?

Answer 71

Violating the unity of time - receiving the interest at the same time. Let’s say that O conveys a “one half undivided share of Greenacre as a joint tenant” to E on Monday and then conveys a similar interest to F on Tuesday. E and F are NOT joint tenants because the unities of time and title are missing. Instead, they are tenants in common.

Question 72

What language do we need for a joint tenancy with right of survivorship?

Answer 72

Joint tenancy with right of survivorship.

Question 73

What is a tenancy by entirety?

Answer 73

- O conveys Greenacre “to A and B as tenants by the entirety.” - Must be a married couple - Undivided right to use and possess the whole property and right of survivorship - Ended by death, divorce or the agreement of both spouses

Question 74

What are the three types of concurrent ownership?

Answer 74

- Tenancy in common - Joint tenancy with right of survivorship - Tenancy by the entirety

Question 75

How can a joint tenancy with right of survivorship be severed and how does a mortgage or lease impact a joint tenancy with right of survivorship?

Answer 75

- A joint tenancy is severed if one cotenant transfers her interest during her lifetime - The majority of jurisdictions state a lease does NOT sever the joint tenancy - Depending on jurisdiction, mortgage may sever the joint tenancy - In a Title Theory jurisdiction, a mortgage is seen as the conveyance of title to the mortgagee. - In a Lien Theory Jurisdiction, a mortgage is viewed as a lien to secure repayment of the debt.

Question 76

What is a partition?

Answer 76

An action to end the co-tenancy and distribute the assets.

Question 77

What is a partition in kind?

Answer 77

Occurs when the property is PHYSICALLY divided, equitably and fairly, between the multiple owners.

Question 78

What is a partition by sale?

Answer 78

Courts may order a sale of the entire property and the proceeds from the sale will be divided up among the co-owners.

Question 79

What are the three factors a court looks to balance when determining whether to conduct a partition by sale?

Answer 79

1. First, the property cannot be conveniently partitioned in kind 2. Second, the interests of one or more of the parties will be promoted by the sale 3. Third, the interests of the other parties will not be prejudiced by the sale

Question 80

What are the two rights and duties of cotenants?

Answer 80

- Each cotenant has the right to use and enjoy all of the property. - Each cotenant has the right to use and enjoy all of the property. - Each cotenant is responsible for payment of his pro-rata share of operating expenses

Question 81

Do the cotenants in possession of the property have to pay rent to the person who is not using the property?

Answer 81

- The majority rule is that no rent is owed by cotenants in possession to co-tenants not in possession, UNLESS there is an ouster - Minority rule is that rent is owed

Question 82

What is an ouster?

Answer 82

- Anousteroccurs when a cotenant in possession refuses to allow another cotenant to occupy the property. - The individual committing the ouster is liable for the pro rata share of the rental value of the individual’s occupancy to the ousted.

Question 83

What are the two main ways waste factors into concurrent ownership?

Answer 83

One concurrent owner may bring an action in waste against another concurrent owner of property (voluntary waste) Concurrent owners do not have to contribute to improvements made to property by other concurrent owners (ameliorative waste)

Question 84

What is a partition action?

Answer 84

Cotenant seeks to both partition the property and have the court settle the financial affairs of the cotenants.

Question 85

What is a contribution action?

Answer 85

Cotenant seeks reimbursement from other cotenants for certain expenses she has paid for the operation of the property (the mortgage, taxes and insurance)

Question 86

What is an accounting action?

Answer 86

Cotenant seeks to obtain her share of the rents or profits that the property has generated. In a majority of jurisdictions, improvements and repairs are covered here.

Question 87

How is an accounting action based on fractional interests?

Answer 87

If one of four tenants in common rents commonly owned property, all four tenants in common are entitled to share in the revenue. If the rent equals $100, then, unless the grant to the four tenants in common specifies unequal ownership percentages, each owner is entitled to $25.