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Real Property > Ownership - Future Interests > Flashcards

Ownership - Future Interests Flashcards

1
Q

Reversion

A

Held by grantor who transfers LE or estate for years without conveying the remaining FI to a 3d party

  • Not subj. to RAP
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2
Q

Possibility of Reverter

A

Auto. reverts to grantor upon occurence of stated event when FSD conveyed

  • Freely transferable
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3
Q

Right of Reentry

A

Held by grantor after FSSCS is granted

  • Right to take back prop.
  • Grantor must exercise the right of reentry to take the prop. back from the grantee
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4
Q

Executory Interest

A

FI in 3d party (not a remainder) that cuts the prior estate short upon the occurence of a specified condition b/f it would have naturally been terminated

  • Transferable
  • Subject to RAP
  • Can be shifting or Springing
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5
Q

Shifting Executory Interest

A

Cuts short prior estate created in same conveyance

  • Estate shifts from 1 grantee to another grantee upon the happening of a condition
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6
Q

Springing Executory Interest

A

Divests the grantor’s interest or fills a gap in possession in which the estate reverts to grantor

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7
Q

Remainder

A

FI that becomes possessory upon the expiration of a prior estate of known fixed duration created in same conveyance in which the remainder is created

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8
Q

Contingent Remainder

A
  1. Created in an unascertainable grantee or
    • Remainder that is not vested
    • Remainder Interest that may not vestw
  2. is subject to an express condition precedent to grantee’s taking (b/c of unknown beneficiary or known beneficiary subj. to cond. precedent that has not yet occurred)
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9
Q

Vested Remainder

A

An interest that cant be taken away

  1. Not subject to any conditions precedent
  2. Created in an ascertainable person
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10
Q

Vested Remainder Subject to Complete Divestment

A

Therer is a condition on a vested remainder

  • The occurance of a cond. subseq. will divest the remainder
    • The vested remainder could be lost entirely after the ascertainable person receives the property
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11
Q

Vested Remainder Subject to Open

A

Class Gifts

  1. Group of unspecified persons whose number, identity, and share of the int. is determined in the future
  2. If at least 1 class mem. is qualified to take poss. at the time of the conveyance,
    • then each class member’s share is subj. to partial diminution
    • b/c additional takers not yet ascertained can still vest
  3. Once the class Closes
    • Any person who might otherwise have become a class member can’t claim an int. in the prop.as a class member
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12
Q

How are class openings created?

A

A class is deemed open the moment the class opens

  1. Inter vivos conveyance - when the conveyance is made, the class opens
  2. Testamentary conveyance - when testator dies, the class opens

Rights don’t vest until the class is open

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13
Q

When does a class close?

A

A class closes to new members as soon as at least one member of the class comes into immed. poss. of the land

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14
Q

What is the rule of convenaience ?

A

A class closes as soon as at least one member of the class comes into immed. poss. of the land

  • But if there is a potential member that is alive, but has to satisfy a cond. precedent to join the class, they are allowed to do so even after the class is closed
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15
Q

Transferability

A
  • Remainders & Executory Interests are transferable inter vivos and Devisable/Descendible
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16
Q

Rules Against Perpetuities (RAP)

A

Spcific Future Interests are valid only if they must vest or fail by the end of a life in being plus 21 years

17
Q

If RAP applies, what is the analysis ?

A

Can someone come into existence more than 21 years after everyone currently alive is dead that will have a poss. interest?

18
Q

RAP Vest or Fail Requirement

A
  • If there is any possibility that it will not be known whether the int. will vest or fail within the applicable pd.
    • RAP has not been satisfied
19
Q

At what time does the RAP analysis start?

A

At the time of creation of the prop. int.

  • Is there a possibility of a RAP violation?
20
Q

RAP - Measuring Lives

A
  • A mesauring life is a natural person alive when the interest was created
    • Measuring life must be human
    • Can be anyone so long as they are identifiable & connected w/ vesting or failing of the interest
21
Q

RAP - What if the measuring life is not specified?

A

The measuring life is the life directly related to the future int. that is subj to the rule

22
Q

RAP - If there is no measuring life, what is the effect?

A

The applicable vesting period is 21 years from the time that the future int. is created

23
Q

RAP only applies to what types of land interests ?

A

It doesn’t apply to present estates. It only applies to:

  1. Future Interests
    • Executory Interests
    • Contingent Remainder
    • Vested Remainder Subj. to Open
  2. Partial Restraints on Alienation
    • Purchase Options
    • Right of first refusals
    • Powers of Appointment
24
Q

What is the effect of a RAP Violation?

A

If a future interest violates RAP

  • If it is possible that the fut. int. will not vest w/in 21 years of the measuring life THEN there is a violation
  • Only the offending interest fails (future interest)
  • Unless (rare case) the voiding of the future int. undermines the grantor’s intent THEN the entire transfer is voided
25
Q

RAP - When does a Contingent Remainder Vest?

A

Requires:

  • Identification of the taker and
  • Satisfaction of all the conditions precedent
26
Q

RAP - When does An Executory Interest Vest?

A

Vesting means the taking of possession

  • Did a contingent event occur?
27
Q

RAP - When does a Remainder Subject to Open Vest?

A

When the class closes

  • All or Nothing Rule
    • If any class members interest might vest beyond 21 years after the measuring life
    • all the cllass members interests are void
    • So, you can’t have interest subj. to open beyond the perpetuities period
28
Q

What are the exceptions to the Rule of convenience ?

A

2 Exceptions

  1. Transfer of a Specific Dollar amountto each class memebr OR
  2. Transfer of Specific Dollar amount to a subclass that vests at a specific time

Any pers. who is entitled to transferred interest is not prohibited from taking that interest just b/c there are other members of the class who are prohibited from taking the int.

29
Q

Common Violations of RAP

A
  1. “Survival beyond age 21” Condition
  2. Fertile Octogenarian
  3. Unborn Spouse
  4. Defeasible Fee followed by executory Interest
  5. Conditional passage of interest
30
Q

Common Violation of Rap - Class Transfers “Survival Beyond age 21” Condition

A

The transfer to a class is violates the Rule:

  1. If transfer to class is conditioned on the class members surviving to an age beyond 21 AND
  2. The class is open
31
Q

Common Violation of Rap - Fertile Octogenarian

A

Anyone, regardless of age or physical condition (including 80 year old woman - “Octogenarian”) is deemed capable of having children

  • Same states have set an age limit beyond which it is rebuttably presumed that a woman can’t have a child
32
Q

Common Violation of Rap - Unborn Spouse

A

If an interest following a widow’s life estate can’t vest until the widow dies, then it violates the rule

  • Rule presumes that a grantor could subsequently marry a person who was not a life in being at the time interest was created
33
Q

Common Violation of Rap - Defeasible fee followed by executory interest

A
  • Violates the rule unless there is a time limit on the vesting of the executory interest that satisfies the rule
  • If limit is durational
    • then striking of EI leaves grantor w/ Possibility of Reverter
  • If Limit is conditon subsequent
    • Striking of EI leaves holder of defeasible fee with FSA
34
Q

Common Violation of Rap - Slothful Executor

A
  • Rule presumes that the executor of the estate might not probate the will for many years after the testator’s death
35
Q

What is the doctrine of worthier title?

A

Rule of construction - applies in some states

  • Preference for prop. passing by descent instead of devise
  • Creates presumption that there is a reversion to grantor, rebuttable by showing of contrary intent
  • Prevents remainder’s in the grantor’s heirs
36
Q

What is total restraint on alienation ?

A
  • A no sell provision
  • If grantee tries to sell, they lose the rights to the prop.
  • Can never have total restrain on a fee

Real Property (14 decks)

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