Future Interests Flashcards
(36 cards)
What are the three types of future interests capable of creation in the grantor?
- Possibility of reverter (only FS)
- Right of Entry aka Power of termination (only FS subject to a condition subsequent)
- The reversion (everything else)
What are the three types of future interests in transferees?
- A vested remainder OR 2. A contingent remainder OR 3. An executory interest
What are the three things you need to distinguish when assessing future interests in transferees?
You must distinguish:
- Vested remainders (three types) from Contingent remainders;
- The three types of vested remainders from each other; AND
- All remainders from Executory interests
What is a 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)
What is a VESTED remainder?
A remainder is vested IF:
- It is created in an ASCERTAINED person, AND
- It is NOT subject to any condition precedent
What is a CONTINGENT remainder?
A remainder is contingent IF:
- It is created in an UNascertained person, OR
- It IS subject to a condition precedent
(or both)
(i.e., If it’s not a vested remained, it MUST be contingent!)
What does it mean to be an ascertained vs. an unascertained person?
(Examples)
Ascertained: the remainder exists in a specific, living person
e.g., “To A for life, then to B’s son,” where A and B’s son are both alive.
Unascertained: the remainder exists in an uncertain or yet unborn person
e. g., “To A for life, then to B’s first child,” where A is alive but B has no kids yet
e. g., “To A for life, then to B’s heirs,” where A is alive and B is alive, so unascertained because a living person can have no heirs
What is a condition precedent?
A condition precendent is a condition that appears BEFORE the language creating the remainder, or is woven into the grant to the remainderman
e.g., “To A for life, then, IF B GRADUATES COLLEGE, to B”
What are the types of vested remainders?
- indefeasibly vested
- vested remainder subject to complete defeasance (total divestment)
- vested remainder subject to open (only remainders can be vested)
What are the two types of executory interests?
- shifting
- springing
What is an executory interest?
A future interest created in a 3d party, which is not a remainder and which takes effect either by:
- cutting short some interest of another OR
- cutting short some interest in the grantor or his heirs
What is a shifting executory interest?
(“Fee simple with a catch”)
- Follows defeasible fee AND
- Cuts short someone other than O, the grantor
e. g., “O to A and his heirs, but if B returns from Canada, to B and her heirs.”
B has a shifting executory interest; A has fee simple subject to B’s shifting executory interest
(B’s interest is not a remainder because remainders NEVER follow defeasible fees!)
What is a springing executory interest?
Cuts short O, the grantor
e.g., “O to A, if and when A marries.” A is unmarried.
A has a springing executory interest
O has fee simple subject to A’s springing executory interest
NY QUESTION
What are executory interests and contingent remainders called in NY?
(Distinction abolished)
Remainders subject to a condition precedent
What is a remainder (of any type, vested or contingent) (4 elements)
A remainder is (1) a future interest created in a grantee [that is] (2) capable of becoming possessory (3) upon the expiration of a prior estate [that is] (4) created in the same conveyance as the remainder
What are the characteristics of remainders? (2)
- Always accompany a preceding estate of known, fixed duration (LE or Term of Years)
- Cannot cut short or divest a prior transferee (never follows a defeasible fee—that would be an executory interest)
What makes a remainder vested?
Created in a known, ascertained person AND
Not subject to any condition precedent
What makes a remainder contingent?
Created in an unborn or unascertained person AND/OR
Is subject to a condition precedent
NY QUESTION
What are future interests subject to a condition precedent called in NY?
Remainder subject to a condition precedent (usually a contingent remainder)
What constitutes a condition precedent?
- It appears before the language creating the remainder OR
- Is woven into the grant to the remainderman (a prerequisite)
What are the limiting doctrines to contingent remainders? (3)
- Destructibility of contingent remainder
- Rule in Shelley’s Case
- Doctrine of worthier title
What is the rule of destructibility of contingent remainders?
(Historical common law rule)
(Present MBE)
(NY law)
Historically: IF contingent remainder still contingent when preceding estate destroyed, contingent remainder destroyed
Today (MBE and NY): Rule abolished
What is the rule in Shelley’s Case?
i.e., “To A for life, then, on A’s death, to A’s heirs,” where A is alive
(Historical)
(Present MBE)
(NY)
Historically: RISC present and future interests merge, giving A a FSA
Today: (virtually abolished) RISC creates Life Estate in A, contingent remainder in heirs; O has reversion
NY: RISC abolished
What is the rule w/r/t the doctrine of worthier title?
i.e., O (who is alive) to A for life, then to O’s heirs. What are the future interests of O, A, and O’s heirs?
(MBE)
(NY)
MBE: A contingent remainder created in living O’s heirs is void. So A has a life estate and O has reversion.
((NOTE: Rule of construction, not law! Grantor intent can overcome if he clearly intends to create the contingent interest in his heirs))
NY: Abolished as to transfers taking effect after September 1967. So A has a life estate and O’s heirs have a contingent remainder.
