Estates in Land

Question 1

What is a fee simple absolute?

Answer 1

Fee simple absolute = the ABSOLUTE ownership of potentially infinite duration

1)Language used to create:
“To A and his heirs”
“To A”

2) Transferability:
Devisable (can pass by will)
Descendible (can pass via intestacy)
Alienable (capable of inter vivos transfer)

3) Future Interest:
NO accompanying future interest

Question 2

What is a fee tail?

Answer 2

Fee tail = estate where inheritability is limited to lineal heirs, which lasts as long as there are lineal blood decendants of grantee

NOTE: most jurisdictions have ABOLISHED fee tails; an attempt to create a fee tail today leads to fee simple absolute

1)Language used to create:
“To A and his heirs of his body”

2) Transferability:
Passes automatically to grantee’s lineal descendants

3) Future Interest:
Reversion (if held by grantor)

Question 3

What are the defeasible fees?

Answer 3

1) Fee Simple Determinable
2) Fee Simple Subject to Condition Subsequent
3) Fee Simple Subject to Executory Limitation

Question 4

What is a fee simple determinable?

NOTE: NY Distinction

Answer 4

Fee simple determinable = a defeasible fee that terminates upon the occurance of a stated event and AUTOMATICALLY reverts back to grantor

NY DISTINCTION: In NY it is called a Fee on Limitation

1)Language used to create:	"To A...									
	for so long as [event...]
	during [event...]
	while [event...]
	until [event...]

**NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee

2) Transferability (ALL subject to condition):
Devisable (can pass by will)
Descendible (can pass via intestacy)
Alienable (capable of inter vivos transfer)

NOTE: an absoluterestraint on alienability as a condition is void (e.g. “To A so long as she never attempts to sell”)

3) Future Interest:
Possibility of reverter

Question 5

What is a fee simple subject to condition subsequent?

NOTE: NY Distinction

Answer 5

Fee simple subject to condition subsequent= a defeasible fee that gives grantor the RIGHT to terminate upon the occurrence of a stated event (i.e. must file an ejectment action)

NY DISTINCTION: called a Fee on Condition

1)Language used to create: “To A,…
but if [event…],
upon condition that [event…],
provided that [event…],
if it happens that [event…]
…grantor reserves the right to reenter and retake”

** NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee

2) Transferability (ALL subject to condition):
Devisable (can pass by will)
Descendible (can pass via intestacy)
Alienable (capable of inter vivos transfer)

NOTE: an absolute restraint on alienability as a condition is void (e.g. “To A so long as she never attempts to sell”)

3) Future Interest:
Right of entry/power of termination (held by grantor)
NY DISTINCTION: In NY right of reentry is known as right of reaquisition

Question 6

What is a fee simple subject to executory interest?

Answer 6

Fee simple subject to executory interest= a defeasible fee that terminates upon a stated event and then passes to a third party (remainder vs. reversion to grantor)

1)Language used to create:

Fee simple s/t shifting executory interest...	"To A,...															
	for so long as [event...], 
	while[event...],
	during[event...],
	until[event...]
	...then to B"

Fee simple s/t springing executory interest… To A
if and when [event…]

** NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee

2) Transferability (ALL subject to condition):
Devisable (can pass by will)
Descendible (can pass via intestacy)
Alienable (capable of inter vivos transfer)

** NOTE: an absolute restraint on alienability as a condition is void (e.g. “To A so long as she never attempts to sell”)

3) Future Interest:
The shifting/springingexecutory interest (3d party) [which is subject to the RAP!]

Question 7

What is a life estate?

Answer 7

Life estate= an estate that is measured by the life of transferee; OR by some other life (pur autre vie)

1)Language used to create:
“To A for life” (simple life estate)
“To A for the life of B” (life estate pur autre vie)
“To A for life, then to B” (B has indefeasibly vested remainder)
“To A for life, but if…, to B” (B has contingent remainder)

2) Transferability (IF pur autre vie AND measuring life is still alive):
Devisable (can pass by will)
Descendible (can pass via intestacy)
Alienable (capable of inter vivos transfer)

3) Future Interest:
Reversion (if held by grantor)
Remainder (if held by a 3d party)

Question 8

What is a life tenant’s entitlements and restrictions?

Answer 8

The life tenant…

1) is entitled to all ordinary uses and profits from the land
2) must NOT commit waste

Question 9

What are types of waste can a life tenant commit?

NOTE: NY Distinction

Answer 9

3 types of waste…

1) Voluntary or affirmative waste = overt conduct that causes a drop in value (i.e. willful destruction)

PURGE EXCEPTIONS...										
	Prior Use (including open mines doctrine)
	Repairs
	Granted
	Exploitation (quarry)

2) Permissive waste or neglect = this occurs when the land falls into disrepair.
- Maintain the premises in reasonably good repair
- Pay all ordinary taxes and interest on mortgages ** NOTE: if the life tenant fails to pay taxes or interest, the government or mortgagee can foreclose on the property, which will cut off the interest to the remaindermen

3) Ameliorative waste = the life tenant must not engage in acts that enhance the property value, unless all future interest holders are known and consent

• • Exception = Changed Condition Doctrine (land now uninhabitable for prior use)
• • Policy = protects the sentimental value for future interests
• • NY DISTINCTION = In NY via statute, life tenant may make reasonable improvements unless remaindermen object

Question 10

What are the types of future interests?

Answer 10

3 interests created in GRANTOR

1) Possibility of Reverter (fee simple determinable)
2) Right of Entry/Power of Termination (fee simple subject to a condition subsequent)
3) Reversion (life estate)

5 interests created in a TRANSFEREE

4) IndefeasiblyVested Remainder(life estate or term of years)
5) Vested Remainder s/t Complete Defeasance(life estate or term of years)
6) Vested Remainder s/t Open(life estate or term of years)
7) Contingent Remainder (life estateor term of years)
8) Executory Interest (fee simple subject to executory limitation)

Question 11

What is a remainder? What are the types of remainders?

Answer 11

Remainder = a future interest created in a grantee that is capable of becoming posessory on the natural expiration of the preceeding estate (i.e. it can never cut short the preceeding estate)

• • ONLY follows a life estate OR a term of years
• • A remainderman is “patient and polite”

TYPES:

(i) contingent remainder;
(ii) indefeasibly vested remainder;
(iii) vested remainder s/t complete defeasance; AND
(iv) vested remainder s/t open

Question 12

What is acontingent remainder?

NOTE: NY Distinction

Answer 12

Contingent remainder = a remainder that is created in

(i) an unascertained/unborn person;
(ii) is subject to a condition precedent;
(iii) or BOTH

Unascertained/unborn e.g. =”To A for life, then to B’s first child (TBD)”

Condition precedent e.g. = “To A for life, then, IF B graduates from college, to B” ** If B graduates college while A is alive, then B’s contingent remainder BECOMES an indefeasibly vested remainder
** If the contigency never occurs, the original GRANTOR has a reversion

NOTE: contingent remaiders are OPEN TO the Rule Against Perpetuties

NY DISTINCTION: NY has abolished the distinction between an executory interest and a contingent remainder. Instead BOTH are called remainders subject to a condition precedent

Question 13

What is the Rule of Destructability of Contingent Remainders?

NOTE: NY Distinction

Answer 13

TheRule of Destructability of Contingent Remainders… HISTORICALLY at common law: a contingent remainder was DESTROYED if it was still contingent at the time the preceeding estate ended

TODAY: the Rule has been abolished; if still contingent at end of preceding estate, then grantor (or his heirs) hold the estate subject to a springing executory interest

NY DISTINCTION: the rule has also been abolished in NY

Question 14

What is the Rule in Shelley’s Case?

NOTE: NY Distinction

Answer 14

TheRule in Shelley’s case…
Applies ONLY to this type of contingent remainder: “To A for life, then, on A’s death, to A’s heirs” A is alive.

HISTORICALLY at common law: the present and future interests would MERGE giving a fee simple absolute (in order to promote alienability) ** This rule was applied EVEN IF it went against the grantor’s intent

TODAY: the Rule has been abolished; A would have a life estate and A’s heirs would have a contingent remainder

NY DISTINCTION: the rules has also been abolished in NY

Question 15

What is the Doctrine of Worthier Title?

NOTE: NY Distinction

Answer 15

TheDoctrine of Worthier Title…
Applies when: the GRANTOR tries to create a future interest in his OWN heirs
“To A for life, then to O’s heirs” (contingent remainder)

The Doctrine would make the contingent remainder in GRANTOR’s heirs VOID (i.e. A would have a life estate and O would have a reversion) BUT, grantor’s intent controls (i.e. if he intended-with a clear statement-to create a contingent remainder in his heirs, then it shall exist)

NY DISTINCTION: the doctrine has been ABOLISHED in NY

Question 16

What is a indefeasibly vested remainder?

Answer 16

The holder of this remainder is CERTAIN to acquire an estate in the future, NO STRINGS ATTACHED

Language used to create: To A for life, remainder to B” A is alive. B is alive
A has a life estate
B has a indefeasibly vested remainder
Grantor has a reversion

NOTE: If remainder predeceases the life tenant, the future interest passes by will or intestacy

Question 17

What is a vested remainder subject to complete defeasance?

NOTE: NY Distinction

Answer 17

The remainderman exists and is NOT subject to a condition precedent, BUT his posession could be cut short by a CONDITION SUBSEQUENT

Comma rule= if conditional language appears AFTER language that would (by itself) created a vested remander, it’s a CONDITION SUBSEQUENT; if language appears BEFORE then it’s a CONDITION PRECEDENT

“To A for life, remainder to B, PROVIDED, HOWEVER, that if B dies under the age of 25, to C” A is alive. B is 20
A has a life estate
B has a vested remainder subject to complete defeasance (and will take upon A’s death)
C has a shifting executory interest
Grantor has a reversion

NY DISTINCTION: in NY it’s known as remainder vested subject to complete defeasance

Question 18

What is a vested remainder subject to open?

Answer 18

A remaider is vested in a GROUP of takers, at least ONE OF WHOM is qualified to take, BUT each class member’s share is subject to partial diminution because ADDITIONAL takers can still join the group

Language to create
“To A for life, then to B’s children [OPEN].” A is alive. B has two children, C & D

Open class vs. closed class

1) Open = others can still join the group
2) Closed = no other can join the group
* * Determined by rule of convenience, which happens whenever any class member can demand possession ** EXCEPTION: under the womb rule, a child of B in the womb at time of A’s death can share with C & D

NOTE: vested remainders subject to open are OPEN TO the Rule Against Perpetuties

Question 19

What is anexecutory interest?

NOTE: NY Distinction

Answer 19

It’s a future interest created in a transferee (third party), which is NOT a remainder and which takes effect by either CUTTING SHORT (i) some interest in ANOTHER person (shifting); OR (ii) in the GRANTOR (springing)

1) Shifiting executory interest
Always follows a defeasible fee ANDcuts short someone OTHER than grantor
Ex: To A and her heirs, but if B returns from Canada, to B and his heirs
A has fee simple subject to shifting executory interest
B has a shifting executory interest

2) Springing executory interest
Always follows a defeasible fee AND cuts short the GRANTOR
Ex: To A, if and when he marries
A has a springing executory interest
O has afee simple subject to executory interest

NOTE: an executory interests areOPEN TO the Rule Against Perpetuities

NY DISTINCTION: NY has abolished the distinction between an EXECUTORY INTEREST and a CONTINGENT REMAINDER. Instead BOTH are called remainders subject to a condition precedent

Question 20

What is the Rule Against Perpetutities (RAP)?

Answer 20

RAP = Certain kinds of FUTURE INTERESTS are VOID if there is ANY POSSIBILITY (no matter how remote) that the given interest may vest more than 21 YEARS after the death of a measuring life

Question 21

What are the steps to assessing anyRule Against Perpetutities (RAP) issue?

Answer 21

Step 1: determine which future interest have been created by the conveyance

RAP ONLY applies to:

(i) contingent remainders; 
(ii) certainvested remainders subject to open; AND 
(iii) executory interests

RAP DOES NOT apply to:

(i) any future interest in GRANTOR; 
(ii) indefeasibly vested remainders; OR 
(iii) vested remainders subject to complete defeasance

Step 2: identify the conditions precedent to the vesting of the suspect future interest (i.e. what must happen in order for the future interest can take posession)

Step 3: find a measuring life (i.e. a person that is ALIVE at the date of the conveyance whose life/death is RELEVANT to the condition occurance)

Step 4: Ask: will we know, with CERTAINTY, within 21 yrs of the death of our measuring life (A) if our future interest holder(s) CAN or CANNOT take?
Yes? the future interest is VALID
No? the future interest is VOID

** Remember the Fertile Octogenarian Rule and the parade of horribles

Question 22

What are thebright line rules re: common law Rule Against Perpetuties (RAP)?

Answer 22

1) A gift to an OPEN CLASS that is conditioned on the members surviving to an age BEYOND 21 violates the common law RAP
2) An executory interest with NO TIME LIMIT for vesting violates the common law RAP
3) A GIFT from one charity to another WILL NOT violate the RAP

Question 23

What are the reforms to the Rules of Perpetuity (RAP)?

NOTE: NY Distinction

Answer 23

1) “Wait and see” or “second look” doctrine: wait until end of measuring life to adjudicate future interest (no more parade of horribles).
2) The Uniform Statutory Rule Against Perpetuities: provides alternative 90 YEAR vesting period
3) Cy pres doctrine: “as near as possible”; a ct. may reform in such a way that most closely maintains grantor’s intent WHILE comporting with the RAP (i.e. reducing any offensive age contingency to 21 yrs)

NY DISTINCTION: the NY reform statute applies the common law RAP and REJECTS the wait and see approach and cy pres (judicial) doctrineEXCEPT for charitable trusts AND powers of appointment

• • If an interest is invalid because condition requires age > 21 yrs, a ct WILL reduce age to 21
• • The common law Fertile Octogenarian principle is modifed providing that women OVER AGE of 55 are presumed to not have any more children
• • The NY “suspension” rule (Trusts and Wills) applies the common law RAP on restrictions of power to sell or transfer