Future Interests

Question 1

Future interests held by grantor

Answer 1

1. Possibility of reverter
   -Accompanies fee simple determinable
2. Right of entry (a.k.a. power of termination)
   -Accompanies fee simple subject to condition subsequent
3. Reversion
   -Future interest granted when grantor conveys an estate of lesser duration (i.e., life estate)

Question 2

Future interests held by tranferee

Answer 2

1. Contingent remainder
2. Vested remainder
   -Indefeasibly vested remainder
   -Vested remainder subject to complete defeasance
   -Vested remainder subject to open
3. Executory interest
   -Shifting executory interest
   -Springing executory interest

Question 3

Remainder

Answer 3

Remainders do not travel alone or cut off another’s interest (sociable and polite)
-Accompanies life estates or term of years
-“To A for life, then to B” (B has indefeasibly vested remainder)

Remainders do not benefit from forfeiture (patient)
-Can never follow a fee simple estate (fee simple determinable, fee simple subject to condition subsequent, fee simple subject to executory interest)

Question 4

Contingent remainder

Answer 4

A contingent remainder is contingent as to a person or event
-Contingent on a person’s death or birth; or
-Condition (event) that must be satisfied before the remaindermen has the right to take

Examples:
-O to A for life, then to B’s first child (B’s first child has CR)
-O to A for life, then to those children of B who survive A (B’s children have CR)
-O to A for life, then, if B graduates from college, to B (B has CR)

Question 5

Vested remainders (three types)

Answer 5

Created in an existing and ascertained person and not subject to a condition precedent

Three types:
-Indefeasibly vested remainder
-Vested remainder subject to total divestment
-Vested remainder subject to open

Question 6

Indefeasibly vested remainder

Answer 6

The holder of this remainder is certain to acquire an estate in the future with no strings or conditions attached
-Best third party future interest

Example:
“O to A for life, remainder to B”

Question 7

Vested remainder subject to total divestment/complete defeasance

Answer 7

The holder of this remainder is certain to acquire an estate but its subject to forfeiture because of a condition subsequent

Example:
“O to A for life, then to B and his heirs; but if B dies unmarried, then to C and his heirs”

Question 8

Vested remainder subject to open

Answer 8

A vested remainder created in a class of persons (i.e., children) that is certain to become possessory, but is subject to diminution
-Each group member’s share gets smaller when additional takers join the class
-Rule of convenience: a class closes when some members of the class can demand possession
-Womb rule: persons in gestation at the time the class closes are included in the class

Example:
“O to A for life, then to B’s children, C and D.”
-Class closes when A dies because C and D can demand possession
-Class also closes when B dies because B cannot have more children