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Flashcards in Freehold Estates Deck (65):
1

What estate is:
To A and his heirs.” or
“To A."?

Fee Simple Absolute

2

What is the transferability and future interest of a fee simple absolute?

Transferability: Devisable, descendible,
alienable
Future Interest: None.

3

What estate is: “To A so long as
…” “To A until ….” “To A while ….” (Language providing that upon the happening of a stated event, the land is to revert to the grantor)"

Fee Simple Determinable

4

What is the transferability and future interest of a Fee Simple Determinable?

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Possibility of
Reverter (held by grantor). (ends automatically on condition)

5

What estate is: “To A. but if X event happens, grantor reserves the right to reenter and retake.?”

Fee simple subject to condition subsequent

6

What is the transferability and future interest of a Fee simple subject to condition subsequent?

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Right of Entry/Power of Termination (held by grantor).
Not automatically ended, but can be ended at the grantor's option if the condition occurs.

7

What estate is: “To A, but if X event occurs, then to B.”?

Fee simple subject to an executor limitation

8

What is the transferability and future interest of a Fee simple subject to an executor limitation?

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Executory Interest (held by third party).
Automatically ended and given to executory interest holder on condition taking place.

9

What estate is: “To A for life.” “To A
for the life of B.”?

Life Estate

10

What is the transferability and future interest of a Life Estate?

Transferability: Alienable, devisable and descendible if pur autre vie and measuring life is still alive.
Future interest: Reversion (if held by grantor); Remainder (if held by third party).

11

What are the 2 most important rules of defeasible fee construction?

1. Words of mere desire, hope, or intention are insufficient to create a defeasable fee.
2. Absolute restraints on alienation are void.

12

Define: Absolute restraints on alienation.

An absolute restraint on alienation is an absolute ban on the power to sell or transfer that is not limited to a reasonable time limited purpose.

13

What happens if there is an absolute restraint on alienation in the conveyance?

that part is deleted.

14

Can a life estate be measured in a term of years?

No.

15

What estate is: “To A for the life of B.”?

The life estate pur autre vie

16

What are the 2 general rules of a life estate?

1. The life tenant is entitled to all ordinary uses and profits form the and.
2. The life tenant must not commit waste.

17

What are the three types of waste?

1. Voluntary or affirmative waste
2. Permissive waste or neglect
3. Ameliorative waste

18

Define: Voluntary or affirmative waste

Overt conduct that decreases value of the land.

19

Rule for voluntary waste and natural resources.

The life tenant must not consume or exploit natural resources on the property (such as timber, oil, or minerals), unless one of four exceptions applies, remembered by PURGE.

20

What dies PURGE mean?

Prior Use-> prior to the grant the land was used to exploit
Repairs-> The life tenant may consume natural resources for repairs and maitnance
Grant-> The life tenant may exploit if granted that right
Exploration-> the land is only suitable to exploit.

21

Define: Permissive waste

Life tenant allows land to fall into disrepair.

22

What are the obligations of life tenant to avoid committing permissive waste?

1. The life tenant must simply maintain the premises in reasonably good repair.

2. The life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits on the land. If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of the premises fair market value.

23

Define: Ameliorative Waste

The life tenant must not engage in acts that will enhance the property’s value, unless all future interest holders are known and consent.

24

What are the future interests capable of creation in the Grantor?

1. The possibility of reverter
2. The right of entry (or power of termination)
3. The reversion

25

What estate does the possibility of reverter accompany?

The fee simple determinable

26

What estate does the right of entry accompany?

The fee simple subject to condition subsequent.

27

What estate does the reversion accompany?

Any time O conveys less than what he owns (e.g., life estate)

Potentially a Fee Simple Subject to a Condition Subsequent if the grantor does not expressly reserve the right of reentry

28

Define: reversion

A reversion is the future interest that arises in a grantor who transfers an estate of lesser quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent. Ex: “To A for life.” O has conveyed less than what she started with. She has a reversion.

29

What are the future interests in transferees?

1. Vested remainder
2. Contingent remainder
3. Executory interest

30

Define: remainder

A remainder is a future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.
A remainder is social patient and polite.

31

When is a remainder vested?

A remainder is vested if it is both created in an ascertained person and is not subject to any condition precedent.

32

When is a remainder contingent?

A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent, or both.

33

Is the remainder contingent or vested:
“To A for life, then to B’s first child.” A is alive. B, as yet, has no children.
Why?

Contingent because it is created in as yet unborn or unascertained persons

34

Define: condition precedent

A condition is a condition precedent when it appears before the language creating the remainder or is woven into the grant to remainderman

35

What interests do B and O have in the following conveyance:
“To A for life, then, if B graduates from college, to B.” A is alive. B is now in high school.

What happens if B graduates form college during A's lifetime?

B contingent remainder (contingent on graduating college

O has the possibility of reversion (If B never graduates then O or O's heirs take)

If B graduates form college during A's lifetime B's contingent remainder turns into an Indefeasibly vested remainder.

36

Define the rule of destructibility of contingent remainders

At common law, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended.

Today the rule has been abolished, only apply common law when it says to.

37

“To A for life, and, if B has reached the age of 21, to B.” A has died. B is 19 years old.

Assess the state of the tittle:
At common law?
Modern law?

Common law:
B has nothing. his contingent remainder was destroyed.
O takes in fee simple absolute.

Modern Law
B would have a springing executory interest.
O would hold fee simple subject to B's springing executory interest.

38

Rule in Shelley's case

Present and future interests merge even if contrary to grantor's intent.
Today the rule is virtually abolished.

39

O conveys “To A for life, then, on A’s death, to A’s heirs.” A is alive.
What is the state of the tittle applying the Rule in Shelly's Case?
What is the state of the tittle using modern law?

Historically: A would have a fee simple absolute.

Modern: A would have a life estate, A's unknown heirs would have a contingent remainder. O has a possibility of reversion because A could die without heirs.

40

The Doctrine of Worthier Title.

The DOWT applies when O, who is alive, tries to create a future interest in his heirs. If that happens the DOWT would void the future interest in O's heirs and instead create a reversion in O. Intent of O still controls.

41

Define: indefeasibly vested remainder

The holder of this remainder is certain to acquire an estate in the future, with no strings attached.

42

Define: vested remainder subject to complete defeasance/subject to total divestment

A remainder is subject to a condition subsequent.

Ex: O conveys "To A for life, then to B and his heirs, but if B dies unmarried, then to C and his heirs"

B has vested remainder subject to total divestment by C's shifting executory interest (B could never marry, and upon A's death his interest would not have vested, thus C takes)

43

Define: vested remainder subject to open

A remainder that is vested in a group of takers, at least one of whom is qualified to take, but each class member is subject to a partial diminuation because they are subject to an additional member joining the class.

44

When does a class close?

The class closes whenever any member can demand possession. Called rule of convenience.

45

To A for life, then to B’s children.” A is alive. B has two children, C and D. When does the class close?

When A dies (however a child in the womb will share in the gift)

46

Define executory interest

It is a future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (“shifting”) or in the grantor or his heirs (“springing”).

47

“To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs.”
What does B have?
What does A have?

B has a springing executory interest.

A has a fee simple subject to B's springing executory interest.

48

Define: Shifting executory interest

Always cuts short a defeasible fee and cuts short someone other than O the grantor.

49

O conveys: “To A, if and when he marries.” A is unmarried.
What do A and O have?

A has a springing executory interest.
O has a fee simple subject to A's springing executory interest

50

THE RULE AGAINST PERPETUITIES

Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.

51

What does the RAP apply to?

contingent remainders, executory interests, and certain vested remainders subject to open

52

4 step process for the RAP

1. Identify the future interest.
2. Identify the conditions precedent to the vesting of the suspect future interest.
3. Find a measuring life. Look for a person alive at the date of the conveyance and ask whether that person’s life or death is relevant to the condition’s occurrence.
4. Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take? If so, the conveyance is good. If not (if there is any possibility, however remote, that the condition precedent could or could not occur more than 21 years after the death of a measuring life), the future interest is void.

53

“To A for life, then to the first of her children to reach the age of 30.” A is 70. Her only child, B, is 29 years old.

What is the state of tittle?

A has a life estate, O has a reversion.

54

2 bright line rules for the RAP

A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP.

“Bad as to one, bad as to all.” To be valid, it must be shown that the condition precedent to every class member’s taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class,

2. Many shifting executory interests violate the RAP. An executory interest with no limit on the time within which it must vest violates the RAP.

55

“To A for life, then to such of A’s children as live to attain the age of 30.” A has two children, B and C. B is 35 and C is 40. A is alive.
What is the state of the tittle?

A has a life estate. O has a reversion.

After Rap would look like this:
“To A for life"
A could have a kid that does not vest in 21 years, whats bad for one member of the class is bad for all.

56

“To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs.”
What is the state of the tittle?

A has a fee simple determinable. O has a possibility of reverter.

After RAP would look like this:
"To A and his heirs so long as the land is used for farm purposes"

57

What happens if after the RAP is applied the new conveyance is not grammatically correct?

the whole clause is stricken.

58

“To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs.

What is the state of the tittle?

A has a fee simple absolute. O has nothing.

New conveyance would look like this:
"To A and his heirs"

Why? "To A and his heirs, but if the land ceases to be used for farm purposes" .is not grammatically correct thus the non-grammatically correct part of the conveyance is stricken as a whole.

59

Charity to charity exception

A gift from one charity to another does not violate the RAP.

60

“To the American Red Cross, so long as the premises are used for Red Cross purposes, and if they cease to be so used, then to the YMCA.”

ARC has a fee simple subject to YMCA's shifting executory interest.

Does not violate the RAP because of the charity to charity exception.

61

What are the 2 methods for Reform of the RAP?

1. The “wait and see” or “second look” doctrine.
2. USRAP

62

what is the wait and see” or “second look” doctrine?

Under this majority reform effort, the validity of any suspect future interest is determined on the basis of the facts as they now exist, at the end of the measuring life.

63

How does the USRAP work?

Codifies the common law RAP and, in addition, provides for: an alternative 90 year vesting period.

64

What doctrine do both the wait and see and USRAP embrace?

Cy pres doctrine and the reduction of any offensive age contingency to 21 years.

65

Define the Cy Pres Doctrine

If a given disposition violates the rule, a court may reform it in a way that most closely matches grantor's intent while still complying with the RAP.