Future Interests

Question 1

Definition
___________: the interest retained by the grantor when he transfers an interest less than the entirety of the interest the grantor owns.

Answer 1

Reversion

Reversion: the interest retained by the grantor when he transfers an interest less than the entirety of the interest the grantor owns.

Question 2

What are the three types of Future Interests in transferees?

1.
2.
3.

Answer 2

The three types of Future Interest in transferees are:

1. Vested Remainders
2. Contingent Remainders
3. Executory Interests

Question 3

Remainders typically follow ________.

Answer 3

Remainders typically follow interests less than a fee simple (usually life estates or terms of years)

Question 4

A Remainder follows the ____________ termination of a prior estate.

Answer 4

Natural

A Remainder follows the natural termination of a prior estate.

Question 5

The owner of a Remainder takes possession ___________________.

Answer 5

Immediately; with no gap time

The owner of a Remainder takes possession immediately following the natural ending of the prior estate with no gap time between possession.

Question 6

A Vested Remainder is a remainder that is:

A) owned by ______
B) is NOT subject to ______

Answer 6

A Vested Remainder is a remainder that is:

A) owned by an ascertained person (or persons)
B) is NOT subject to a condition precedent

Question 7

A Contingent Remainder is a remainder where

A) the owner is ________; OR
B) the property is __________

Answer 7

A Contingent Remainder is a remainder where:

A) the owner is unascertained; OR
B) the property is subject to a condition precedent

Question 8

Definition:

___________: an interest in a third party that follows interests less than a fee simple. Corollary to Reversion, but interest is in third party, not grantor.

Answer 8

Remainder

Remainder: is an interest in a third party that follows interests less than a fee simple. Corollary to Reversion, but interest is in third party, not grantor.

Question 9

A person is considered ascertained if 1) ____ 2) ___ 3) _________.

Answer 9

A person is considered ascertained if he or she can be 1) specifically 2) named 3) currently.

Question 10

O conveys to A for life, then to B and B’s heirs.

Is B an ascertained person?

Answer 10

Yes, B is an ascertained person because B is named.

Question 11

O conveys to A for life, then to B’s children. B is newly married, but childless as of yet.

Is the remainder to B’s children ascertained or unascertained?

Answer 11

The remainder to B’s children is to a group of unascertained persons.

Therefore, B’s unborn children have a contingent remainder.

Question 12

O conveys to A for life, remainder to B’s heirs. B is married to C and has one son, D.

Is the remainder to B’s heirs ascertained or unascertained?

Answer 12

The remainder to B’s heirs is unascertained.

Heirs can only be definitely identified when a person dies.

While B is still alive, B’s heirs are unascertained, so their interest is contingent remainder.

When B dies, B’s heirs can be identified and the remainder becomes vested.

Question 13

The criteria for a ___________:

1) a future interest
2) in someone other than the grantor
3) following immediately after
4) the expiration
5) of a particular estate.

Answer 13

Remainder

1) a future interest
2) in someone other than the grantor
3) following immediately after
4) the expiration
5) of a particular estate.

Question 14

A _________ Remainder is one in which the remainderman’s right to immediate possession is without pre-conditions (except expiration of the the prior estate).

Answer 14

A VESTED REMAINDER is one in which the remainderman’s right to immediate possession is without pre-conditions (except expiration of the the prior estate).

Question 15

A remainder is _______ if the remainderman is:

(a) born and
(b) ascertained, and
(c) no (stated) event need occur before possession (except expiration of the prior, particular estate).

Answer 15

Vested

A remainder is vested if the remainderman is:

(a) born and
(b) ascertained, and
(c) no (stated) event need occur before possession (except expiration of the prior, particular estate).

Question 16

A remainder is _____ if any of the following applies:

1. A stated event must occur before possession.
2. It is conveyed to unascertained persons.
3. It is conveyed to unborn persons.

Answer 16

Contingent

A remainder is contingent if any of the following applies:

1. A stated event must occur before possession.
2. It is conveyed to unascertained persons.
3. It is conveyed to unborn persons.

Question 17

Is the below remainder Vested or Contingent?

“to B for 10 years, then to C and his heirs”

Answer 17

Vested.

C is born (A)
C is ascertained (B)
No event need occur before possession, except the expiration of the prior estate

Question 18

Is the below remainder Vested or Contingent?

“to B for life and then, if C survives B, to C and his heirs”

Answer 18

Contingent

Surviving the prior estate holder is probably the most common type of stated event found in contingent remainders.

Question 19

Is the below remainder Vested or Contingent?

“to B for life, then to C’s heirs”

Answer 19

Contingent

This is the classic contingent remainder. Nobody has “heirs”until they’re deceased. Living persons have only “heirs apparent.” As long as C is alive, C’s actual heirs are unascertained.

Question 20

Is the below remainder Vested or Contingent?

“to B for life, then to C and her heirs”

Answer 20

Vested

C is born (A)
C is ascertained (B) {and her heirs shows fee simple]
No event need occur before possession, except the expiration of the prior estate

Question 21

Is the below remainder Vested or Contingent?

“to B for life, then to C’s eldest child, Nancy, and her heirs”

Answer 21

Vested

Nancy is born (A)
Nancy is ascertained (B)
No event need occur before possession, except the expiration of the prior estate

Question 22

Is the below remainder Vested or Contingent?

“to my wife, Sarah, for life, then to my first grandchild”

(assume has no grandchildren yet)

Answer 22

Contingent, if the grantor doesn’t have any grandchildren yet, this would be a contingent remainder to unborn persons.

If the grantor DID have a grandchild, then this would be Vested.

Question 23

Is the below remainder Vested or Contingent?

“to B for life, then to C and his heirs”

Answer 23

The answer is vested.

This conveyance represents the most straightforward possible vested remainder. It is to a born, ascertained person, and there’s no “stated event” condition precedent to possession by the remainderman (except expiration of the prior estate).

It’s true that C will have to outlive B in order to personally enjoy possession of the premises, but if C predeceases B, his vested remainder will go to his heirs or devisees – and they will be entitled to possession at the end of B’s life estate.

Question 24

Is the below remainder Vested or Contingent?

“to B for life, then to C’s heirs”

Answer 24

The answer is contingent.

As a living person, C has no heirs–only heirs apparent. (No one is the heir of a living person).

Of course, if C dies before the end of B’s life estate, C’s heirs will thereupon be definitively ascertained, and C’s actual heirs will than have a vested remainder from that point on.

Question 25

Is the below remainder Vested or Contingent? "to B for life, then to C's eldest child, Nancy"

Answer 25

The answer is vested. This is a conveyance to a born, ascertained person (namely, Nancy), and there's no "stated event" condition precedent to possession by the remainderman (except expiration of the prior estate).

Question 26

Is the below remainder Vested or Contingent? "to B for life, then to C's eldest child to survive him"

Answer 26

The answer is contingent. We may know who C's eldest child is, but as long as C is alive, the identity of his eldest child to survive him will remain unascertained. Therefore, this remainder is to an unascertained person, and it is, accordingly, contingent.

Question 27

Is the below remainder Vested or Contingent? "to B for life then, if C survives B, to C and his heirs"

Answer 27

The answer is contingent. This is a remainder to a born and ascertained person, But the conveyance sets up a stated event (C outliving B) that must occur in order for C's remainder to become effective in possession.

Question 28

Is the below remainder Vested or Contingent? "to B for life, then to C for life"

Answer 28

The answer is vested. Even though C will have to outlive B in order for anybody to actually enjoy possession under this remainder, it is considered to be a vested remainder. It is to a born, ascertained person, and there's no "stated event" condition precedent to the remainderman's entitlement to possession (except expiration of the prior estate).

Question 29

What kind of Remainder is the below? "to B for life, then to C and his heirs, but if C dies before B, then to D and her heirs"

Answer 29

Vested Remainder Subject to Divestment C has a remainder that is vested (C is born, ascertained and can take without pre-conditions), BUT, C's remainder is subject to divestment if a stated event occurs (if C dies before B).

Question 30

Barbara, owning a fee simple absolute, conveys: "to B for life, then to C and his heirs if C survives B, otherwise to D and her heirs" What interest does C have?

Answer 30

C has a contingent remainder. C is born and ascertained. However, there is a condition precedent on C's entitlement to take possession (C must survive B).

Question 31

Barbara, owning a fee simple absolute, conveys: "to B for life, then to C and his heirs if C survives B, otherwise to D and her heirs" What interest does D have?

Answer 31

D has a contingent remainder. D is also born/ascertained, but has a condition precedent. The condition precedent on D's entitlement is just the opposite of C's. For D, C must not survive B.

Question 32

What kind of Remainder is the below? "to B for life, then to C and his heirs, but if C dies childless, then to D and her heirs"

Answer 32

C has a remainder that is vested (C is born, ascertained and can take without pre-conditions) BUT, C's remainder is subject to divestment if a stated event occurs (C dies childless).

Question 33

O conveyed Greenacre "to B for life, then to C and his heirs, but if C dies before B, then to D and her heirs" and O conveyed Blueacre "to B for life, then to C and his heirs, but if C dies childless, then to D and her heirs" C's remainder in each case is in FEE SIMPLE ON EXECUTORY LIMITATION. What is D's interest in each case called?

Answer 33

Executory Interest The answer is "executory interest." D is not the grantor, so D's interest can't be a reversionary interest or right of re-entry. C has a fee simple, so D's interest can't be a remainder. (A remainder can never directly follow a fee simple.) Indeed, D has a classic "shifting"-type executory interest, and C's remainder is VESTED SUBJECT TO DIVESTMENT -- in this case, a fee simple on executory limitation.

Question 34

True or False: A remainder can never follow a fee simple.

Answer 34

True. A remainder can never follow a fee simple.

Question 35

Does the below conveyance create an: A) Vested or B) Contingent remainder in C? "to B for life, then to C and her heirs, but if C dies childless, then to D and her heirs"

Answer 35

The remainder is vested. This conveyance creates a remainder to a person who is born and ascertained and there is no "stated event" condition precedent to possession by the remainderman (except expiration of the prior estate). The condition on this remainder is a condition subsequent. The words of conveyance grant the remainder to C without pre-condition, but then set up an after-the-fact condition that can later cut off her rights, in favor of D.

Question 36

Does the below conveyance create an: A) Vested or B) Contingent remainder in C? "to B for life, then to C and his heirs if C goes straight to college after high school, otherwise to D and her heirs"

Answer 36

The remainder is contingent. The words of conveyance set up a pre-condition that must be met before C can have a right to immediate possession, thus giving him a contingent remainder. In fact, this conveyance creates two contingent remainders, sometimes referred to as "alternative contingent remainders." The non-occurrence of the stated event for C's condition precedent is worded to be also the occurrence of the stated event for D's condition precedent.

Question 37

Does the below conveyance create an: A) Vested or B) Contingent remainder in C? "to B for life, then to C and his heirs, but if C predeceases B, then to D and her heirs"

Answer 37

The answer is vested (subject to divestment). C's remainder bears none of the earmarks of a contingent remainder (unborn; unascertained; pre-conditional stated event). So it's vested, but subject to divestment. The condition on this remainder is a condition subsequent. The words of conveyance grant the remainder to C without pre-condition, but then set up an after-the-fact condition that can later cut off his rights, in favor of D.

Question 38

Does the below conveyance create an: A) Vested or B) Contingent remainder in C? "to B for life, then to C and his heirs so long as the land is used for agricultural purposes"

Answer 38

The answer is vested (subject to defeasance). Here again, C's remainder bears none of the earmarks of a contingent remainder (unborn; unascertained; pre-conditional stated event). It's vested, but subject to defeasance, though it will be defeased by expiration, not by divestment. Actually, there's no condition on this remainder at all, but rather a limitation -- to be exact, a special limitation. So, what C has here is a remainder in fee simple on special limitation, more commonly known as a fee simple determinable.

Question 39

What kind of remainder do B's children have created by the below conveyance? "to B for life, remainder to B's children and their heirs"

Answer 39

Vested Remainder Subject to Open If B has one or more living children, this remainder is "vested." But it's nonetheless subject to partial divestment -- "subject to open"-- as more people are added to share the same pie: REASON: B might have more children before the life estate ends. If B has additional children, each new child will be vested with his/her equal share, while the shares of B's prior children are correspondingly reduced (partially divested).

Question 40

What kind of remainder do B's children have created by the below conveyance? "To A for life, then to B's first child". A is alive, and B is alive, but as of yet, has no children.

Answer 40

Contingent Remainder B's unborn first child has a contingent remainder, because it is created in an unborn taker.

Question 41

What kind of remainder does B have created by the below conveyance? "To A for life, then, if B graduates from college, to B." A is alive and B is alive.

Answer 41

Contingent Remainder B must graduate from college before B may take the property. This is a condition precedent, and thus must be a contingent remainder.

Question 42

What kind of remainder does B have created by the below conveyance? O conveys “to A for life, remainder to B”. A is alive and B is alive.

Answer 42

Indefeasibly Vested Remainder Bi is known, and there are no conditions precedent (or subsequent) attached to B's taking.

Question 43

What interests are held under the below conveyance? O conveys “To A for life, remainder to B’s children”. A & B are alive. B has two children, C & D.

Answer 43

A has a Life Estate. B has no interest. C & D have Vested Remainders Subject to Open, because B could still have more children, and thus add to their class.

Question 44

What interests are held under the below conveyance? O conveys "To A and his heirs, but if B returns from Europe within the next year, to B."

Answer 44

A has fee simple subject to executory limitation. B has a shifting executory interest. A has fee simple rights, but upon the occurrence of a specified condition, the rights transfer to a third party. Thus, fee simple subject to executory limitation. B has a shifting executory interest, because B's future interest cuts off the rights of A (third party).

Question 45

What is C's future interest? O conveys "to B for life, then to C and her heirs if C provides B a proper burial."

Answer 45

C has an executory interest. C's interest can't be a remainder because it doesn't give possession to C "immediately after the expiration of a prior particular estate." There has to be a "gap," while C gives B a proper burial. During the "gap," possession reverts to O, from whom it must then "spring" out, and C's possession directly follows possession by the grantor.

Question 46

What is C's future interest? O conveys "to B for life, then to C and her heirs if C marries H."

Answer 46

A contingent remainder. C's future interest can take effect "immediately after the expiration of a prior particular estate"--provided that C marries H before the death of B. Because C's interest can meet the definition of remainder, the law treats it as a remainder. Because a stated event (marriage to H) must occur before C can take possession, her remainder is contingent.