Estates & Future Interest - Future Interest Held by Transferee Flashcards
What are the two categories of future interest that can be held by a transferee:
- Remainder
- Executory Interest
What is a remainder?
A future interest created in a transferee that is capable of becoming possessory upon the natural termination of a prior estate created by the same instrument.
example: A conveys “To B for life, then to C” C’s interest is capable of becoming possessory when the prior estate (B’s life estate” naturally terminates, C holds a remainder.
What are the two type of remainders?
Vested Remainders and Contingent Remainders
What are the three types of Vested remainders?
- Indefeasibly vested remainder
- vested remainder to divestment
- vested remainder subject to open
How many types of remainders are there?
How many types of executory interest are there?
4 types of remainders
2 types of executory interest
What are the commonalities in vested remainders?
- Created in a living, ascertainable person
- Not subject to any condition precedent except the natural termination of the prior estate.
Explain an indefeasibly vested remainder.
The vested remainder is CERTAIN to become a possessory estate.
ex: To B for life, then to C….C is going to get it upon B’s death.
Explain a vested remainder subject to divestment.
Is certain to become possessory unless a specified event occurs
Ex: To be for life, then to C, but if B smokes, then to D.
Explain vested remainder subject to open.
Held by one or more ascertainable members of a class that may grow by future additions of unknown at the time persons.
Explain a contingent remainder.
is either created in an unascertainable person or subject to a condition precedent.
Ex: To be for life, then to C if C graduates law school.
C’s remainder is contingent on satisfying a condition precedent (law School) before she is eligible to take possession.
What is an executory interest?
A future interest created in a transferee that must “cut short” or “divest” another estate or interest in order to become a possessory estate.
Example: To A, but if B returns from the war, to B.
A has a fee simple that may potentially endure forever. But for B to have a possessory estate, B’s interest must cut A’s fee simple. B has a n executory interest.
What are the two types of executory interest?
Springing and shifting.
What is a springing executory interest?
One that divests the transferor
Ex: To A, but if not used as farm, goes back to O, then to B
What is a shifting executory interest?
One that divests to the transferee
Ex: To A, but if used as a farm, to B
What are the four special restrictions on contingent future interest held by transferees?
Rule against perpetuities
The doctrine of Worthier title
The rule in Shelley’s case
Destructibility of contingent remainders
