IV. FUTURE INTERESTS (275-95, 303-28)

Question 1

possessory estate: life estate

correlative future interest in grantor: ______________

Answer 1

reversion

Question 2

possessory estate: fee simple determinable

correlative future interest in grantor: ______________

Answer 2

possibility of reverter

Question 3

possessory estate: fee simple on condition subsequent

correlative future interest in grantor: ______________

Answer 3

right of entry

Question 4

reversion, possibility of reverter, right of entry are future interests in ________

Answer 4

grantor

Question 5

remainder and executory interest are future interests in _______

Answer 5

grantee

Question 6

reversion

Answer 6

future interest in grantor after he conveys vested estate of lesser quantum than he has

Question 7

possibility of reverter

Answer 7

future interest in grantor after he carves out determinable estate of same quantum

Question 8

right of entry

Answer 8

future interest in grantor that he creates subject to condition subsequent

Question 9

remainder

Answer 9

future interest in grantee, has capacity of becoming possessory at expiration of prior estates and can’t divest prior estates (naturally follows)

Question 10

executory interest

Answer 10

future interest in grantee that divests/cuts short prior estate

Question 11

shifting executory interest

Answer 11

divests the grantee, prior estate generally has fee simple subject to executor limitation

Question 12

springing executory interest

Answer 12

divests the grantor by springing out of grantor’s estate at a future date

Question 13

Can a remainder follow a fee simple?

Answer 13

NO - must follow a fee tail, life estate, or term of years

Question 14

vested remainders (definition)

Answer 14

remainder created in an ascertained person AND not subject to a condition precedent

Question 15

condition precedent

Answer 15

express condition attached to remainder

Question 16

indefeasibly vested remainder

Answer 16

holder of remainder is certain to acquire a possessory estate at some time in the future and is also certain to be entitled to retain the possessory estate permanently

Question 17

vested remainder subject to open

Answer 17

vested in a class of person, at least one of whom is qualified to take possession, but shares of class member are not yet fixed because more people can subsequently become members of the class

Question 18

Class gifts

Answer 18

gift to group of persons described as a class; class is either open (possible for others to enter class) or closed (not possible for others to enter the class)

ex. class gift to “children of A” remains open until A’s death

Question 19

What is O grants “to A for life, then to A’s kids”, and at the time of the conveyance A has one child, X. If X dies before A, who gets the remainder when A dies?

Answer 19

CL Rule: whoever A’s heirs are get X’s divested remainder, and siblings keep their remainder

American Rule: parents keep X’s divested remainder, siblings keep their remainder

Question 20

Why are vested remainders subject to divestment reachable by creditors?

Answer 20

they are certain to come into possession

Question 21

vested remainder subject to divestment

Answer 21

either vested subject to being divested by operation of a condition subsequent or vested subject to divestment by inherent limitation of estate in remainder

Question 22

contingent remainder

Answer 22

remainder that is either created in an unascertained person OR subject to a condition precedent

Question 23

O to A for life, then to B and his heirs if B survives A, and if B does not survive A to B’s children and their heirs - who has what?

Answer 23

O: nothing
A: life estate
B and B’s children have alternative contingent remainders

Question 24

indefeasibly vested, vested subject to open, and vested subject to complete defeasance are types of ___________________

Answer 24

vested remainders

Question 25

Indefeasibly vested remainder

Answer 25

holder of remainder is certain to acquire a possessory estate at some time in the future and is also certain to be entitled to retain the possessory estate permanently

Question 26

Vested remainder subject to open

Answer 26

vested in a class of persons, at least one of whom is qualified to take possession but shares of class members are not yet fixed because more people can subsequently become members of the class

Question 27

O to A for life, then to B’s heirs

Answer 27

A: life estate
B’s heirs: contingent remainder (heirs not determined until B dies)
O: reversion (B may be alive when A dies)

Question 28

Statute of Uses (1536)

Answer 28

Before Statute, large part of land in England was held in use; Henry VIII abolished the uses and turned them into legal estates that would be subject to all feudal incidents on death of legal owner. Large result of the Statute of Uses is that it increased alienability of the land.

Question 29

cestui que use

Answer 29

the person for whose benefit the feeoffment was made

Question 30

O enfeoffed (conveyed a freehold of land into the possession of his bro A with the understanding that O’s wife and kids would have the use of the land

What is A vs. O’s wife and kids?

Answer 30

CL cts refused to enforce uses but chancellor compelled the feoffee to uses to hold land in accordance with the understanding

A is the feoffee to uses (trustee), holds seisin
O’s wife and kids are cestuis que use (beneficiaries)

Question 31

How to distinguish executory interest from a remainder?

Answer 31

both are future interests in grantee but executory interests = no preceding estate, follows a fee simple, does not follow natural termination of preceding estate

Question 32

Symphony Space v. Pergola

Answer 32

Court holds Symphony Space own theater space; option agreement violates RAP (date in 2003 more than 21 years after creation of option); court says it must strike down entire agreement because whole thing is void if it violates RAP. Court holds perpetuities period is 21 years in commercial transactions where no measuring life is stated in agreement.

Question 33

Cy Pres Doctrine

Answer 33

“as near as possible”; the invalid interest could have been struck out or the instrument could be reformed to approximate the intentions of the creator. (court could have stricken one date that was outside RAP range and upheld rest of contract)

Question 34

“Wait and See” Doctrine

Answer 34

Wait out the common law perpetuities period before declaring the contingent interest void.

Question 35

USRAP

Answer 35

Replaces RAP with an extending of “wait and see” for 90-year vesting period – some still say that is too long and criticize it for tying up wealth.

Question 36

Statute of Enrollments

Answer 36

Required the parties to go to the enrollment office to record the land transfer to have the public notice.

Question 37

What made livery of seisin obsolete?

Answer 37

Statute of Frauds required written instrument to be used to transfer title to land (prior to this Statute of Usues permitted legal title to be conveyed by deed)

Question 38

3 rules cts have established to destroy contingent interests and make land more marketable

Answer 38

(1) Destructibility of contingent remainders: A remainder in land is destroyed if it does not vest at or before termination of preceding freehold estate; applies to contingent remainders ONLY.
(2) Rule in Shelley’s case: If one instrument creates a life estate in land in A and purports to create a remainder in A’s heirs, remainder becomes a remainder in fee simple (or fee tail) in A; has been abolished in most jxns
(3) Doctrine of worthier title: When an inter vivos (while you’re alive) conveyance purports to create a future interest in the heirs of the grantor, the future interest is void and the grantor has a reversion

Question 39

Destructibility of contingent remainders

Answer 39

A remainder in land is destroyed if it does not vest at or before termination of preceding freehold estate; applies to contingent remainders ONLY.

Doctrine of merger: If life estate and next vested estate in fee simple come into hands of one person, lesser estate is merged into the larger (Same Instrument Exception: If the life estate and the next vested interest were created by the same instrument, there is no merger if merger would destroy an intervening contingent remainder because this would defeat the grantor’s intent. But if A subsequently conveys the life estate with the reversion then merger can take place.)

Question 40

Why were destructibility of contingent remainders, rule in Shelley’s case, doctrine of worthier title, and Rule Against Perpetuities established?

Answer 40

courts established three rules (plus RAP) to destroy contingent interests and make land more marketable (mostly have been abolished, but since they remain in existence in some jxns we still have to learn them)

Question 41

Rule in Shelley’s case

Answer 41

If one instrument creates a life estate in land in A and purports to create a remainder in A’s heirs, remainder becomes a remainder in fee simple (or fee tail) in A; has been abolished in most jxns

Question 42

Doctrine of worthier title

Answer 42

When an inter vivos (while you’re alive) conveyance purports to create a future interest in the heirs of the grantor, the future interest is void and the grantor has a reversion

Question 43

Are interests retained by the grantor subject to RAP?

Answer 43

NO, reversions, possibilities of reverter, and rights of entry are treated as vested as soon as they arise.

Question 44

What are the 3 interests RAP applies to?

Answer 44

contingent remainders, executory interests, class gifts

Question 45

Rule of proof for RAP

Answer 45

must prove that contingent interest is certain to vest or terminate no later than 21 years after death of some person alive at the creation of the interest

Question 46

en ventre sa mere

Answer 46

in mom’s belly

Question 47

Saving Statute

Answer 47

cross out the offending party of a grant that violated RAP (codification of cy pres)

Question 48

abeyance

Answer 48

a state of temporary disuse or suspension