Future Interests

Question 1

reversions

Answer 1

a reversion is the estate left in a grantor who conveys less than she owns. A reversion is alienable, devisable, and inheritable. these are vested and not subject to RAP

Question 2

remainders

Answer 2

a future interest in a third person that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate, and it cannot follow a time gap after the preceding estate. a remainder must be expressly created in the instrument

Question 3

Ex. of Remainder

Answer 3

O conveys to A for life, then to B and his heirs
O conveys to A for life, then to B and his heirs one day after A’s death - B does not have a remainder because there is a gap.

Question 4

indefeasibly vested remainder

Answer 4

a vested remainder is one created in an existing and ascertained person and not subject to a condition precedent

Question 5

Vested Remainder subject to open

Answer 5

remainder created in a class of persons that is certain to become possessory, but is sibject to diminution
ex. O conveys to A for life, then to the children of B. A and B are living and B has one kid C. C has a vested remainder subject to open

Question 6

Vested Remainder subject to total divestment

Answer 6

this is a vested remainder that 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 a vested remainder subject to complete divestement by C’s executory interest.

Question 7

contingent remainder

Answer 7

contingent remainders are those created in unborn or unascertained persons, or subject to a condition precedent.

Question 8

condition precedent

Answer 8

must be satisfied before the remainderman has a right of possession

Question 9

Contingent remainder examples.

Answer 9

1. O conveys to A for life, then to B and his heirs if B marries C.
2. to A for life, then to B and his heirs if B marries C, otherwise to D and his heirs. B and D have alternative contingent remainders.

Question 10

Unborn or unascertained persons

Answer 10

a remainder created in unborn or unascertained persons is contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding estate ends.

Question 11

Doctrine of Merger

Answer 11

When one person acquires all of the present and future interests in land except a contingent remainder, under the common law, the contingent remainder is destroyed

Question 12

ex. of Merger

Answer 12

O conveys to A for life, then to B’s children. If before B has any children, O purchases A’s life estate then O will have a life estate pur autre vie and a reversion and the contingent remainder in B’s unborn child is destroyed.

Question 13

rule in shelleys case

Answer 13

will be a wrong answer choice on MBE - if the same instrument created a life estate in A and gave the remainder only to A’s heirs, the remainder was not recognized, and A took the life estate and the remainder

Question 14

doctrine of worthier title

Answer 14

A remainder in the grantor’s heirs is ineffective, so the grantor gets a reversion ex. to A for life, then to my heirs at law.

Question 15

Executory interests

Answer 15

future interests in third parties that either divest a transferee’s preceding freehold estate (shifting) or follow a gap in possession or cut short a grantor’s estate (springing) Subject to RAP because not vested

Question 16

ex. of springing interest

Answer 16

In a grant from O “to A and his heirs when A marries B, A has a springing executory interest because it divests the grantor’s estate.

Question 17

ex. of shifting executory interest

Answer 17

In a grant from O “ to A for life, then to B and his heirs; but if B predeceases a, then to C and his heirs,” C has a shifting executory interest because it divests a transferee’s preceding estate.

Question 18

class gifts

Answer 18

a class is a group of persons having a common characteristic. The share of each member is determined by the number of persons in the class. may be open or contingent

Question 19

when does class close

Answer 19

a class closes when some member of the class can call for distribution of her share ie. life tenant’s death

Question 20

Survival

Answer 20

survival of a class member to the time of closing is usually unnecessary to share in a future gift unless survival was made an express condition ( to A for life and then to his surviving children) anti lapse statute will save gift for party’s descendants even if there is an express survival condition.

Question 21

ex. of contingent remainder

Answer 21

to a for life, remainder to those of B’s children who survive A, this looks like vested remainder subject to open but its not because it is contingent on B surviving A.

Question 22

RAP applies to

Answer 22

contingent remainders, executory interests, vested remainders subject to open, options to purchase, rights of first refusal, and powers of appointment.

Question 23

when does perpetuities period begin to run

Answer 23

by will - the testators death
deeds- date of delivery
irrevocable trust - date created
revocable trust - date it became irrevocable.

Question 24

Charity to Charity exception

Answer 24

RAP does not apply when one charity gives to another.

Question 25

To A for so long as no liquor is consumed on the premises, then to B

Answer 25

violates RAP, executory interest is stricken , A has fsd and O has POR

Question 26

To A for life, then to those of A’s children who attain the age of 25

Answer 26

gift to an open class on the condition they live beyond 21 violates rule

Question 27

to A for life, then to A’s children for life, then to A’s grandchildren in fee

Answer 27

A’s grandchildren violates RAP

Question 28

O conveys to A for life then to A’s widow for life, then to A’s surviving issue in fee.

Answer 28

gift to A’s issue is invalid absent a statute because A’s widow might be a spouse who nos not in being when the interest was created. To A’s children however would be ok.

Question 29

a gift to my issue surviving at the distribution of my estate

Answer 29

invalid bc estate may be distrubuted beyond RAP

Question 30

Right of first refusal

Answer 30

if a seller receives a third party’s offer to purchase the property, the right of first refusal gives its holder the right to purchase the property, usually on the same terms as the offer.

Question 31

Rights of first refusal not person to the holder

Answer 31

if given to holder’s heirs and assigns will violate RAP.

Question 32

Current lessee or tenant

Answer 32

RAP does not apply. Rule against restraints on alienation applies. valid if it does not impose an unreasonable restraint on alienation.

Question 33

Bad as to One, Bad as to all Rule

Answer 33

If the interest of any class member may vest too remotely, the whole class gift fails. For the class gift to vest, the class must be closed and all conditions precedent must be satisfied for every member.

Question 34

gift to subclass

Answer 34

each gift to a subclass may be treated as a separate gift under the Rule.

Question 35

Per capita gift exception

Answer 35

a gift of a fixed amount to each member of a class is not treated as a class gift under the Rule. ex. 1k to each of my great-grand children, whether born before or after my death.