004 02 Property--Freehold Estates/ Furture Interests/rap

Front 1

3 Categories of Present Estates

Back 1

1. Fee Simple Absolute
2. Fee Simple Defeasible--potential to be absolute
3. Life Estate

Front 2

Definition: Fee Simple Absolute
3 elements

Back 2

1. goes forward indefinitely;
2. inheritable
3. Cannot be divested
4. fully alienable EXCEPT right of first refusal

Front 3

FSA--how created

Back 3

To A--modern--words of purchase
To A and his heirs-- common law--words of limitation b/c heirs have no present interest

FS is presumed unless language shows a clear intent to create another estate.

Front 4

FSA--future interests created

Back 4

none

Front 5

Definition and Types: Fee Simple Defeasible

Back 5

1. Fee Simple Determinable
2. Fee Simple on Condition Subsequent
3. Fee Simple subject to executory limitation

Front 6

Definition: Heirs

Back 6

Those who succeed to the real property of an intestate decedent(one who dies without a will) under a state's statute of descent/intestate succession

not necessarily children

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FSD--Definition

Back 7

Will automatically end when a specified event happens. It may endure forever, but will automatically end if event occurs

Front 8

FSD-Future Interests

Back 8

Possibility of Reverter to Grantor or grantor's heirs

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Possibility of Reverter

Back 9

when the FSD ends (after condition happens) the prop reverts back to grantor.

look for: "so long as" "while" "during" "until"

Front 10

Synonyms--FSD

Back 10

fee simple on a special limitation; fee simple on a conditional limitation; base fee

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FSD--how created

Back 11

to A so long as
to A until
to A while
to A during

Front 12

FSD--motive/purpose v. technical words

Back 12

Just because someone states the purpose intended by FSD, does not always mean that it is one.

there must be words that limit the duration of the estate upon the happening of a certain event when the land then reverts back to the grantor

Front 13

Fee Simple Subject to Condition Subsequent--Definition

Back 13

unlike FSD bc it does not automatically terminate. It divest at the grantor;s election

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Def-Divest

Back 14

to cut short

Front 15

Distinction bt FSSCSub and FSD

Back 15

Grantor must act in the case of a FSSCS, whereas in a FSD, it is automatic

Front 16

FSSCS--how created

Back 16

-but if... X event happens
-upon the condition that...if... X event happens
-provided, however that if ... X event happens

Front 17

FSSCS--future interests created

Back 17

Right of Reentry aka. Power of termination. but he must elect to exercise this right.

Front 18

If ambiguous language and court has to choose b/t FSD and FSSCS?

Back 18

They choose FSSC bc of the policy to avoid forfeiture

Front 19

Fee Simple subject to an executory limitation--definition

Back 19

on the happening of a certain event divested in favor of a third person i.e. grantee B

Front 20

Life Estates--2 types

Back 20

1. For the life of the grantee
2. Pur Autre Vie

Front 21

Life Estates--For the the Life of Grantee
How Created
FI

Back 21

Def--estate as long as grantee lives
"To A for Life"
Reversion

**can be created by implication

e.g. to A after B dies. Implied Life Estate.

Front 22

Life Estates--Per Autre Vie
How Created
FI

Back 22

Def: estate as long as someone else lives

"To A for life of B"

OR

"O To A for life" then A transfers" to B for life"--B has a life estate per autre Vie bc A is the measuring life.

Reversion to 0

Front 23

Life Estates--Waste definition

Back 23

conduct by life tenant that unreasonably, permanently impairs the value of the land

OR

the interest of a person holding title or some subsequent estate in the land

Front 24

Life Estate--Waste Rationale(2)

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1. grantor intends for the life tenant to use the property in a reasonable manner, but that the land shall pass to owner of the remainder as nearly as practicable

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Life Estate--Waste--As nearly as practicable rational definition

Back 25

unimpaired in its nature, improvements and character

Front 26

Life Estate--Waste--Types--3

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1. Affirmative
2. Permissive
3. Ameliorating

Front 27

Life Estate--Waste--Affirmative
Exception

Back 27

LT actively causes permanent injury--e.g. destroying buildings, removing natural resources **(UNLESS normal use of land was to deplete natural resources i.e. OPEN MINES DOCTRINE)
--Cutting trees to create clearing for conversion into farmland

Front 28

Life Estate--Waste--Permissive(Involuntary)

Back 28

To avoid permissive waste T must:

1. Repair (not replace)
2. Pay taxes
3. Pay interest on mortgage (but not prinicpal)
Land falls into into disrepair, or tenant does not make reasonable efforts to protect property from elements

also, failing to pay taxes, NOT insurance

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Life Estate--Waste--Ameliorating

Back 29

principal use of the land is substantially changed but the effect is an increase in the value of the land.

Front 30

Life Estate--Waste--Ameliorating-->Exception

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1. market value of FIs is not dimished

AND

1. the remaindermen do not oject

OR

2. changed conditions have rendered the property relatively useless, then life tenant can tear down without being held liable.

e.g. demolishing a house because of heavy railroad traffic for business purposes when the conveyance was intended for the prop to be used as a residence.

Front 31

Life Estate--Waste--Remedies

Back 31

Injunctive Relief or Damages

Front 32

Class Gifts

Back 32

gifts to a class of unnamed persons

-members of a class who predecease the Testator are eliminated and do not recover.

-once class is established when the will is executed, the class stays open to accommodate those who later meet the definition of class member

Front 33

Class Gifts--Rule of COnvenience

Back 33

class CLOSES when any one class member is entitled to a distribution.

can be specified to not apply b/c it is a rule of construction not of law

Front 34

Future Interest--definition

Back 34

a present nonpossessory interest capable of becoming possessory in the future.

Front 35

FI--Types

Back 35

1. Reversion
2. Possibility of Reverter
3. Right of Entry
4. Remainder
5. Executory Interest

Front 36

FI--Reversion

Back 36

FI left in grantor after the grantor conveys a vested estate of a lesser quantum(amount) than he has

-alienable
-accelerates possession upon the termination of the preceding estate
-NOT SUBJECT to RAP
-age of P almost always irrelevant

Front 37

FI--Poss of Reverter

Back 37

arises when grantor carves out a determinable estate of the same quantum-->must follow a FSD

look for: so long as; while, during, or until.

In grantor

Front 38

FI--Right of Entry

Back 38

retained IN GRANTOR when he creates FSSCS retains the power to cut short the estate

--**grantor must expressly reserve the right of entry

look for condition introduced by:

"provided however" (most common) and gives O right to "go and retake", also: "But if" or "upon condition that"

-not subject to RAP but cannot be transferred inter vivos (will or intestate OK)

Front 39

FI--Remainder--Generally

Back 39

a future interest in GRANTEE that:
1. has the capacity of becoming possessory at the expiration of the prior estates

AND
2. cannot divest the prior estates

-must follow a preceding estate-->life estate or term of years

Front 40

FI--Executory Interest

Back 40

FI in GRANTEE that, in order to become possessory, MUST DIVEST [cut short] the prior estate or SPRING out of the grantor at a future date

Front 41

FI--Remainder v. Executory Interest

Back 41

a remainder never divests whereas an executory interest almost always does.

Front 42

FI--Remainders--Types

Back 42

1. Vested
2. Contingent

Front 43

FI--Remainders--Types--Vested

Back 43

BOTH created in an ascertained individual AND is not subject to any condition precedent

Front 44

FI-Remainders--Types--Contingent

Back 44

EITHER created in an un-ascertained person OR not subject to a condition precedent

Front 45

FI--Vested Remainder--Types

Back 45

-vested remainder is one that is created in an EXISTING and ASCERTAINED person, and NOT SUBJECT TO a CONDITION PRECEDENT.

-the remainderman has right to immediate possession upon the normal termination of the preceeding estate

1. Indefeasibly Vested Remainder

2. Vested Remainder Subject to Open[vested in a class of persons]

3. Vested Remainder subject to total divestment aka
vested remainder subject to an executory interest
also vested remainder subject to an executory limitation

Front 46

FI--Vested Remainder--Indefeasibly Vested Remainder

Back 46

a vested remainder that is not subject to divestment or diminution

Front 47

FI--Vested Remainder--Vested Remainder Subject to Open

Back 47

a vested remainder created in a class of persons (e.g. children) that is certain to become possessory, but is SUBJECT TO DIMINUTION--by the birth of additional persons who will share in the remainder as a class.

"to A for life, then to the children of B."

A and B are living and B has one child, C. C has a vested remainder subject to open.

Front 48

FI--Vested Remainder--Vested remainder subject to total divestment

Back 48

vested remainder that is subject to a condition subsequent.

"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 divestment by C's executory interest.

Front 49

FI--CR--considerations/how to spot

Back 49

must be:
1. condition precedent i.e. a condition must be satisfied before the grantee can be certain of possession

2. Grantee does not exist i.e. grantee's interest is contingent on being born

3. Identity of exact taker is unknown--must be identifiable by NAME

Front 50

Contingent Remainders--Doctrine of Merger

Back 50

doctrine of merger: when one person acquires all of the present and future interests in land except a contingent remainder, the contingent remainder is destroyed

BUT
If the life estate and the next vested interest were CREATED BY THE SAME INSTRUMENT, there is no merger. Merger can only occur when one person later acquires immediately successive estates.

Front 51

Fi--Executory Interests

Back 51

, must be an executory interest
-If no preceding estate
-if the FI follows a FS
-the FI does not follow the natural termination of the preceding estate

Front 52

FI-Exec. Interest--Springing Interest

Back 52

-springs out of the grantor at a date subsequent to the granting of the interest, divesting the grantor.

Front 53

Fi--Exec. Interest--Shifting Interest

Back 53

-divests the grantee to another grantee i.e. shifts the estate from one grantee to another

Front 54

FI-- Vested Remainder-->Alienability

Back 54

Alienable, Devisable, can be limited to be divested at death.

Front 55

RAP--Definition

Back 55

No interest is good unless it must vest if at all, not later than 21 years after some life in being at the creation of the interest

-ONLY applies to contingent remainders, executory interests, and vested remainders subject to open/ partial divestment.

Front 56

RAP--policy

Back 56

-hindrance to creation of dynastic devices

Front 57

RAP--Application Questions

Back 57

1. Is there any contingent remainder that might vest in the "distant future"?
--if yes, then it is void.

Front 58

RAP--validating lives

Back 58

persons who can
1. affect the vesting of the interests
2. are alive at the creation of the contingent interest [either by will or inter vivos gift]
-look to people mentioned in the grant and weed out the ones that do not effect the vesting
-sometimes the person is not mentioned in the grant

Front 59

RAP--class gifts

Back 59

-all members of the class must validate the RAP
-rationale property cannot be sold until all owners are ascertained, thus making the property unmarketable for too long

Front 60

RAP--remote possibilities

Back 60

1. fertile octogenarian
2. unborn widow
3. slothful executor

Front 61

RAP--exemptions

Back 61

gift from one charity to another charity

Charities are favored by the law; both the possessory estate and the future interest must be charitable organizations

Front 62

Doctrine of Worthier Title

Back 62

under DOWT a remainder in the grantor's heirs is invalid and becomes a reversion in the grantor.

-applies only to inter vivos transfers (not wills) and only if word "heirs" is used.
"O to A for life, then to the heirs of O

Front 63

Valid Restraints on Alienation

Back 63

1. forfeiture and promissory restraints on life estates

2. Forfeiture restraints on transferability of future interests

3. reasonable restrictions in commercial transactions

4. Rights of first refusal

5. Restrictions on assignment and sublease

Front 64

Fee Tail

Back 64

A to B and the heirs of B's body is NOT alienable (other than for current owner's lifetime) or devisable.

It IS inheritable.