Present Estates

Question 1

What sort of language will a fee simple absolute use?

Answer 1

“To A and his heirs” or “To A…”

Question 2

What is the transferability of a fee simple absolute?

Answer 2

Devisable

Descendible

Alienable (during holder’s lifetime)

Question 3

Can you put a direct restraint on alienation of a fee simple?

Answer 3

No, these are void

Question 4

What is a fee simple determinable with the possibility of remainder?

Answer 4

It is a potentially infinite estate, provided a stated event does not occur

Look for language like: “To A, so long as,” or “until…”

Question 5

If the states event happens during the grant of fee simple determinable with the possibility of remainder, what happens to the estate?

Answer 5

The possibility of reverter materialises and the estate goes back to the GRANTOR

Question 6

Is the fee simple determinable with the possibility of remainder transferable?

Answer 6

Yes, it’s divisible, descendible and alienable, but subject to the grantor’s condition

Question 7

What is a fee simple subject to condition subsequent?

Answer 7

Potentially infinite estate, provided the condition is not breached.

For this estate you need clear durational language, stating which event needs to occur; AND if the event does occur, a statement that the grantor has the right of re-entry onto the land.

Question 8

What is the difference between a fee simple determinable with the possibility of remainder and a fee simple subject to condition subsequent?

Answer 8

Both come with a condition and both hold a right to revert to the grantor if the condition is not met. However, FSSCS only reverts if the grantor exercises their right of reentry. It’s not automatic

Question 9

What is a fee simple subject to executor?

Answer 9

It’s a potentially infinite estate, but if a condition occurs, the estate goes to a third party (rather than back to grantor)

Look for language like “To A, but if X moves back from Canada, then to X”

Question 10

What is a life estate?

Answer 10

“To A for life”

This is a life estate measure by the life of the transferee (A) or the life of another.

Question 11

Under the doctrine of waste, what is the tenant usually entitled to?

Answer 11

The life tenant is entitled to ordinary uses and profits from the land. But they cannot sell it the natural resources or tear down structures

Question 12

What is voluntary/affirmative waste?

Answer 12

Actual over conduct/destruction that causes a drop in the value of the property

Question 13

In which circumstances is the tenant permitted to commit voluntary/affirmative waste?

Answer 13

P U R G E

Prior use (land previously exploited under grant—subject to open mines doctrine)

Reasonable repairs and maintenance

Grant (express)

Exploitation (land only suitable for that)

Question 14

What is permissive waste?

And what are the T’s obligations?

Answer 14

When life tenant neglects the land.

Tenant has a duty to carry out maintenance and repairs to a reasonable standard. But not to replace.

Question 15

What is ameliorative waste?

Answer 15

The tenant cannot engage in acts that enhance the land’s value unless all future interest holders know and consent.

Question 16

What are the three future interests possible of creation in the GRANTOR?

Answer 16

Possibility of Reverter

Right of re-entry

Reversion

Question 17

What are the three types of future interest capable of creation for a third party transferee?

Answer 17

A contingent remainder

A vested remainder: (1) indefensibly vested remainder; (2) vested remainder subject to complete defeasance; and vested remainder subject to open.

An executory interest (springing and shifting)

Question 18

What do remainders ALWAYS follow?

Answer 18

A preceding estate of known, fixed duration

Question 19

What is a remainder?

Answer 19

A remainder is a future interest

Created in a grantee

That is capable of becoming possessory upon the expiration or a prior possessory estate

Created in the same conveyance as when the remainder is created

Question 20

What is a contingent remainder?

Language used for a contingent remainder?

Answer 20

A remainder created in an unascertainable or unknown person

OR

That is subject to an as of yet unmet condition precedent.

E.g. “To A for life, then to B’s first child.” A is alive and B doesn’t get have children

Question 21

If a remainder exists with no condition precedent, it is what?

Answer 21

A vested remainder

Question 22

What is an indefensibly vested remainder?

Which other estate might convert to it?

Answer 22

The holder is known and certain to acquire the estate in the future, with no strings attached.

If the grantee satisfies the condition precedent attached to the contingent remainder, the third party grantee will then have an indefensibly vested remainder

Question 23

What is a vested remainder subject to complete defeasance?

Answer 23

A condition subsequent still attached and must be complied with for the transferee to take the estate.

Question 24

What is a vested remainder subject to open?

Answer 24

A future estate created in a class of person that is still open (like if B has more children)

Question 25

For the purposes of a vested remainder subject to open, when does the class close?

Answer 25

When the grantor dies, because that’s when the current class could demand possession

Or if B died, because then they couldn’t have more children.

Question 26

What estate does a shifting executory interest always follow?

Answer 26

A defensible fee and it will cut short the current holder’s right

Question 27

What is the effect of a springing executory interest?

Answer 27

It cuts short the grantor’s interest (rather than a third party)

Question 28

What is the Rule Against Perpetuities?

Answer 28

If there is a possibility that the given interest may best more than 21 years after the death of a measuring life, then the future interest = void

Question 29

To which estates does the RAP apply?

And that means it does not apply to which estates?

Answer 29

Applies only to:
—Contingent remainders
— Executory interests
— Vested remainders subject to open

Does NOT apply to:
— Indefensibly Vested Remainders
— Vested Remainders Subject to Total Divestment/Complete Defeasance
— Interests capable of creation in the grantor

Question 30

What is the “Wait and See” or “Second Look” doctrine?

Answer 30

Consider whether the interest actually vested at the end of the 21 year Perpetuities period. If it did in fact vest, it’s good. If not, it is void.

Question 31

What is the rule under the Uniform Statutory Rule Against Perpetuities?

Answer 31

It provides for an alternative 90 year beating period

Question 32

What is the Cy Pres doctrine?

Answer 32

If a disposition of property violates the RAP, a court may reform the gift to match the grantor’s intent and get it as close as possible to what the grantor would have wanted.

Only applies to trusts.

Question 33

If the grantee holds an indefensibly vested remainder and then dies, who takes their right?

Answer 33

It passes by will or through intestacy

Question 34

If a grantor coveys the following right: “To D for life and then to B if she becomes a licensed attorney.” What estate does B have?

If B never becomes an attorney what happens?

If B does become an attorney, what happens?

Answer 34

B has a Contingent Remainder because it’s subject to an unsatisfied condition precedent

If B never becomes an attorney, the life estate will revert back to Grantor.

If B does become an attorney, they then have an Indefensibly Vested Remainder and take the land with no further strings attached.

Question 35

A third party executory Interest that follows which type of interest will often violate the RAP?

Answer 35

The three defeasible fees.

Question 36

If a gift is made to an open class of people, conditioned on those members surviving to a certain age, will this typically violate or not violate the RAP and what’s the exception?

Answer 36

Usually violate the RAP

But if the age contingent links back to the parents, then it might be ok.

Question 37

For the purpose of assessing when the RAP rule begins to run, when does the 21 year period start for making gifts under a Will?

Answer 37

From the date of death, not execution.

Question 38

Which of the following are subject to the RAP?

1. Option contracts
2. Rights of first refusal

Answer 38

Option contracts are subject (unless for a current leasee)

Rights of first refusal are not.