Land Estates and Future Interests

Question 1

Steps to analyze a problem

Answer 1

1- Identify the basic estate that O transferred to A
2- Determine whether the estate is modified or unmodified. If it is modified (defeasible), determine how it is modified. Name it.
3- Once you know what O has transferred to A, you then determine what’s left, determine who holds it, and accurately name it.
4- Determine if any rules of marketability apply

Question 2

What are the basic estates?

Answer 2

Fee simple, Life Estate, Fee Tail, Fee for a Term of Years

Question 3

What are the three ways an estate can be modified?

Answer 3

1- Determinable
2- Subject to a Condition Subsequent
3- Subject to Executory Limitation

Question 4

O gives to A and his heirs

Answer 4

Fee simple absolute

Question 5

O gives to A for life

Answer 5

Life estate

Question 6

O gives to A for the life of B

Answer 6

Life estate pur autre vie

Question 7

O gives to A and the heirs of his/her body

Answer 7

Fee tail male/female

Question 8

O to A for 6 years

Answer 8

A fee for a term of years

Question 9

Determinable

Answer 9

To be determinable, an estate must be granted or conveyed with a condition subsequent which, if it occurs, cuts short the estate and returns it to the grantor. These estates are no longer absolute because they can be terminated by the occurrence or non-occurrence of a condition. I usually refer to that as the happening of a condition—but it can also be the not happening of the condition.​

Each one of the major forms of estates can arise in a determinable form. This means that it is subject to a conditional limitation, and if the condition is triggered, it is subject to immediate and automatic forfeiture in favor of the grantor.​

Question 10

Subject to condition subsequent

Answer 10

The major estates also come in another flavor, very similar to determinable estates. This form is called estates “subject to condition subsequent.” This is the name for an estate granted or conveyed with a condition subsequent which, if it occurs, gives O, the original grantor, the power to retake the estate.

This is different from a determinable estate. In a determinable estate, the happening of the condition automatically terminates the estate in favor of the grantor. Here, the happening of the condition allows the grantor to make a reentry or repossession of the land—or bring an action to do so. You can tell when you’ve got this type of estate by the language, or operation of the language.​

Question 11

Subject to executory limitation

Answer 11

The last major type of defeasible, or conditioned, estate is an estate “subject to executory limitation.” Here, there is also a condition subsequent, just like we had in the last two types of estates.

The difference is that unlike in a determinable estate, (in which the happening of the event automatically ends the estate and returns it to the grantor), and unlike the estate subject to a condition subsequent, (in which the happening of the event allows the grantor to reenter and reclaim the estate), in an estate subject to executory limitation, the happening of the condition subsequent automatically terminates the estate in favor of another grantee. That means the original grantor has decided that if you trigger the condition, someone else gets the land. (It doesn’t even have to be a screw-up, it could be a naturally occurring event.)​

Question 12

What are the possible future interests that could be retained by O at the time of transfer?

Answer 12

Reversion possibility of reverter, right of entry(re-entry/power of termination)

Question 13

Reversion

Answer 13

A reversion is the future interest that the grantor retains when the estate that the grantor granted is one that terminates naturally (that is, not by the happening of any specific condition). Life estate, fee tail, and fee for a term of years are examples of estates that terminate naturally.

Question 14

Possibility of Reverter

Answer 14

A possibility of reverter arises when what O granted to A is some form of determinable estate, where there is a condition upon which the estate returns to the grantor. What the grantor has left is called a possibility of reverter. This applies to any type of determinable estate—fee simple determinable, life estate determinable, or fee tail determinable).

Question 15

Right of Entry

Answer 15

A right of reentry (right of entry, power of termination, right to retake, etc.) arises when O has granted A any estate in a “subject to a condition subsequent” form, meaning that should the condition occur O may exercise an option to reenter and retake possession of the estate. The right of reentry is a future interest that the grantor creates for themselves, and it depends on circumstances and language. It can occur with a fee simple subject to condition subsequent, a life estate subject to condition subsequent, etc.

Question 16

If O transfers any estate determinable, what is the future interest held by O?

Answer 16

possibility of reverter

Question 17

If O transfers any estate subject to a condition subsequent, what is the future interest held by O?

Answer 17

Right of entry, Power of termination (held by O at TOG)

Question 18

If O transfers any estate that terms naturally, what is the future interest held by O?

Answer 18

Reversion

Question 19

If O transfers any estate subject to executory limitation, what is the future interested held by O?

Answer 19

No future interest in O (instead it’s with a 3rd party)

Question 20

What are the general future interests created in a transferee?

Answer 20

Remainder or Executory Interest

Question 21

When is a vested remainder
?

Answer 21

a remainder is vested when: 1) the grantee is ascertainable and 2) there are no conditions precedent to that person taking the state

Question 22

What are the types of vested remainders?

Answer 22

indefeasible vested remainder, vested remainder subject to divestment, vested remainder subject to open, vested remainder subject to executory limitation

Question 23

Indefeasible vested remainder

Answer 23

created in an ascertainable person and not subject to a condition
precedent
Example: O conveys “to A for life, then to B.” B is ascertainable, and no condition precedent must be met before B can take possession

Question 24

Vested remainder subject to divestment

Answer 24

a vested remainder that is subject to a condition and could be taken away or lost BEFORE the grantee gets it

Example: O conveys “to A for life, then to B, but if B does not live to age 21, then to C.” (All are living. B is 19.) B’s remainder is vested; but it will end if the condition occurs—if B does not live to age 21
Note: Vested remainder in Fee Simple Subject to Executory Limitation looks similar but is not the same. In a VR FSE, the condition has to cut the estate during or after it becomes possessory
Example: O to A for life, then to B and his heirs, but if B uses the land for commercial purposes, to C and his heirs. (All are living.)

Question 25

Vested remainder subject to open

Answer 25

a vested remainder held by one or more members of a class that may be enlarged in the future Example: O conveys “to A for life, then to B’s children.” B is alive and has one child, C. C’s remainder is vested, but his share may become smaller in the future if more children are born

Question 26

Vested remainder subject to executory limitation

Answer 26

when it is subject to a condition that could cut short the interest only after or during the time that remainderman is in possession of the estate. Example: O to A for life, then to B and his heirs, but if B uses the land for commercial purposes, to C and his heirs. (O, A, B, and C are living.) a. A has a life estate b. B has a vested remainder (B is living and ascertainable, no conditions precedent) in fee simple subject to executory limitation. This is because B could lose his fee simple only after he comes into possession of the estate. B can’t use the land for noncommercial purposes before B has the land. c. C has a shifting executory interest in FSA d. O has nothing

Question 27

Contingent remainder

Answer 27

a remainder is contingent when 1) there is a condition precedent to the grantee taking the estate OR 2) the grantee is unascertainable Note: A condition precedent is something someone must do to take the estate versus condition subsequent happens after that grantee has possession of the estate (and it’s happening might cut short the estate)

Question 28

Executory Interest

Answer 28

Future interest created in a grantEE that is not a remainder. If it terminates naturally, there is a remainder. If it terminates by the happening of a condition, there is an executory interest. i. O conveys to A and her heirs, but if A divorces, then to B for life and then to C ii. O conveys to A for life, then 15 years after the end of A’s life, to B and her heirs a future interest can switch from the original or preceding estate to a later estate when the earlier estate is cut short by a condition subsequent. When this happens, it is called either a springing or shifting interest.

Question 29

Springing executory interest

Answer 29

An interest springs from the preceding estate, if that estate was in the grantor.

Question 30

Shifting executory interest

Answer 30

An interest shifts from the preceding estate, if that estate was in a grantee.

Question 31

What are the four rules that further marketability?

Answer 31

1- Rule in Shelley's Case 2- Doctrine of Worthier Title 3- Doctrine of Destructibility of Contingent Remainders 4- Rule Against Perpetuities

Question 32

Rule in Shelley's Case

Answer 32

if a freehold estate is given to a person and, in the same instrument, a remainder is given to the heirs (or the heirs of the body) of that person, he takes both the freehold estate and the remainder

Question 33

Four requirements for Rule in Shelley's Case

Answer 33

1- one instrument 2- creates a freehold estate in a transferee and 3- a remainder in that transferee's heirs, and 4- both interests are legal or both equitable

Question 34

If the Rule in Shelley's Case applies, what happens?

Answer 34

The contingent remainder in the transferee's heirs (unascertainable at the time) becomes a vested remainder in the transferee (ascertainable)

Question 35

How does the Rule in Shelley's case apply to the following: O to B for life, then to B's heirs

Answer 35

Normally: B- life estate B's heirs- contingent remainder in fee simple O- reversion Under rule in Shelley's case: B- life estate and remainder in fee simple (contingent turns into vested) B now holds present possessory interest and complete future interests, B's two interests merge and now B holds a fee simple absolute

Question 36

Does intent matter in Rule of Shelley's Case?

Answer 36

No, it is a rule of law

Question 37

Doctrine of Worthier Title

Answer 37

If a grantor creates a remainder or an executory interest in his own heirs, the grantor retains a future interest in himself rather than creating a future interest in those heirs

Question 38

When does the doctrine of worthier title apply

Answer 38

1- a conveyance creates a remainder or executory interests 2- in the grantor's heirs

Question 39

What happens in effect when the doctrine of worthier title applies?

Answer 39

the contingent future interest in the heirs (who are unascertainable at the time) becomes a vested future interest in the grantor (who is ascertainable)

Question 40

How does the doctrine of worthier title apply to: O to G for life, then to O's heirs

Answer 40

Initially: G- life estate O's heirs- contingent remainder in fee simple O- reversion But the doctrine creates remainders in grantor's heirs.. so, the future interest in O's heirs becomes a future interest in O. The contingent remainder becomes a vested remainder.

Question 41

What does the doctrine of worthier title apply to?

Answer 41

applies only to both remainders and executory interests in the heirs of the transferors

Question 42

What does the Rule in Shelley's case apply to?

Answer 42

Only applies to remainders not executory interests

Question 43

Doctrine of Destructibility of Contingent Remainders

Answer 43

any contingent remainder that has not vested at the termination of the preceding freehold estate is destroyed

Question 44

When does the doctrine of destructibility of contingent remainders apply?

Answer 44

1- a contingent remainder 2- doesn't vest before the preceding freehold estate (typically life estate) ends

Question 45

How does the doctrine of destructibility of contingent remainders apply to: O to G for life, then to M and her heirs if M marries

Answer 45

Initially G- life estate M & her heirs- contingent remainder in fee simple O- reversion If M is not married by the time G's life ends, M's contingent remainder is destroyed and she loses her interest, then O's reversion becomes possessory

Question 46

What type of modification is O conveys “to A and his heirs, as long as A remains married.”

Answer 46

Fee simple determinable

Question 47

What type of modification is O conveys “to A for life, as long as A stays in law school.”​

Answer 47

Life estate determinable

Question 48

What is the rule against perpetuities?

Answer 48

​“No interest is good unless it must vest, if at all, no later than twenty-one years after some life in being at the creation of the interest.​”

Question 49

Which types of estates does the RAP apply to?

Answer 49

The rule applies only to unvested future interests held by a grantee. This means it includes only: contingent remainders, ​ vested remainders subject to open, and executory interests​. It does not apply to vested future interests held by a grantee (like vested remainders) and it does not apply to any future interests held by O.

Question 50

Steps for RAP

Answer 50

(a) identify the contingent interest; (b) list the lives in being; (c) consider whether anyone can be born who might affect vesting; (d) kill off the lives in being at some future date and add 21 years; (e) ask yourself, “Is there any possibility that the contingent interest will vest after this point?” If so, it is void; if not, it is valid.