Property

Front 1

Remainder indefeasibly vested

Back 1

a remainder that is certain to become possessory
ex. To A for life, and on A's death to B. A has a life estate; B has a indefeasibly vested remainder

Front 2

Remainder subject to open
(Class Gift)

Back 2

a vested remainder to a group for which others may qualify for membership after the transferring document becomes effective

Front 3

Exampmle: Remainder subject to open

Back 3

“To A for life, then to A’s sons.” A has one son. The son has a vested remainder subject to open, because A can have more sons.

Front 4

Is a Remainder subject to open subject to the rule against perpetuities?

Back 4

yes

Front 5

What if a remainder subject to open fails because of the RAP

Back 5

if it fails because of the rule, and one other than the transferor or its successors will take, then that third party's interest is a contingent remainder

Front 6

Two types of Class Gifts

Back 6

1) open
2) closed - when it is not possible for others to enter the class

Front 7

Class Closing Rule

Back 7

the class closes whenever any member of the class is entitled to immediate possession or enjoyment of the interest, if it has not already closed physiologically and there is no expression to the contrary

Front 8

Vested Remainder Subject to total divestment

Back 8

a vested remainder which the remainder persons might loose their right to immediate possesson due to the happening of a condition that might occur after the remainder is created and has become vested in interest
1) condition subsequent
2) executory interest cuts off remainder
3) right of entry

Front 9

Example: Vested remainder subject to total divestment

Back 9

“To A for life, then to B for life.” A has a life estate; B has a vested remainder in a life estate subject to total divestment. If B dies before A then his vested remainder will be totally divested

Front 10

contingent remainder

Back 10

a remainder in which the remainderperson does not havae a right to immediate possession upon the termination of the preceding estate, unless a condition stated in the transferring document occurs first

Front 11

A remainder is contingent if:

Back 11

1) it is created in favor of unborn or unidentifiable person and/or
2) subject to a condition precedent other than the expiration of all prior interests created by the same transfer

Front 12

condition precedent

Back 12

is an express condition in the instrument other than the termination of the preceding estate, which must occur before the remainder becomes possessory

Front 13

Are contingent remainders alienable?

Back 13

not at common law

yes, in some states today

Front 14

How to determine if a remainder is contingent or vested?

Back 14

1) look to the intent of the transferor

2) where does the conditional language occur

Front 15

contingent/vested remainders
Intent of transferor

Back 15

Look to the intent of the transferor to determine:
1) If remaindermand was to have vested interest subject to its being taken away by the happening of a stated event, or
2) if he intended that the interest would not be vested until the stated event occurred

Front 16

distinguishing between vested/contingent remainders
Where does the conditional language occur

Back 16

1) conditional language after language that, if considered alone, would have created vested remainder makes it a vested remainder subject to divestment
2) Conditional language before the language that created the remainder, or, it is placed so that it is part of the description of remainder person --condition subsequent + contingent remainder

Front 17

What about a remainder which is found to be in favor of an unborn person, or unascertainable person

Back 17

it will be considered contingent

Front 18

Vested/contingent remainders

what if language is ambiguous?

Back 18

law favors vested remainders

Front 19

Doctrine of Worthier Title

Back 19

one cannot, either by conveyance or will, give a remainder to his own heirs

Front 20

What is the reason for having the Doctrine of Worthier title?

Back 20

so we don't create fee tails

Front 21

Doctrine of Worthier Title

Rule of construction

Back 21

when a remainder is expressly given to the grantor's heirs, it should be presumed that the grantor did not intend to create a reaminader unless there is additional evidence of his intent to do so -- raises rebuttable presumption that no remainder was created

Front 22

When does the doctrine of worthier title apply?

Back 22

only to inter vivos transfers when the words "heirs", "next of kin", or other equivalent is used

Front 23

Example: Doctrine of Worthier title

Back 23

O deeds property “to A for life, and on A’s death to my heir’s at law.” In most states, A has a life estate and O has a reversion in fee simple. In a state that has abolished the doctrine, the state of title is: life estate in A; contingent remainder in O’s heirs; reversion in O.

Front 24

Executory Interest

Back 24

a future interest created by the transferring instrument. It is in someone other than the original transferor or its successors. It never waits until the natural expiration of all prior estates as remainders will. Rather, an executory interest divests present estates created in favor of someone other than the executory interest holder or vested future interests created in fovor of someone other than the executory interest holder

** if it is not a remainder because the preceding estate is not a life estate, then it must be an executory interest

Front 25

Executory interest might become a possessory estate by

Back 25

1) upon the expiration of a fee simple determinable (automatically)
2) upon the expiration of a fee simple subject to an executory limitation (automatically)
3) Upon termination of a fee simple subject to a consition subsequent (automaticall)
4) Upon exercise of the power of termination (re-entry, reverter)
5) premature termination of a determinable life estate
6) upon divestment of a vested remainder subject to divestment

Front 26

Executory Interests restrictions before the statute of uses

Back 26

No springing interests - freehold could not be created to commence in future

Front 27

springing executory interest

Back 27

on that follows a gap in possession or divests the estate of the transferor...transferee -to- transferor -to- new transferee

Front 28

Example of Springing executory Interest

Back 28

Ex: O conveys property “to A when and if A marries B.” O has a fee simple subject to an executory interest in O; springing executory interest in fee simple in A. Since it divests the estate of a transferor, it is a springing executory interest

Front 29

shifting executory interest

Back 29

on that divests the interest of another transferee
transferee -to- someone else

can not give estate that would cut another estate short

Front 30

Example: Shifting Executory Interest

Back 30

“To A and her heirs; but if B returns from Canada, then and in that event to B and his heirs.” A has a fee simple subject to a shifting executory interest. If B returns, it will divest A’s fee simple and title will shift to B.

Front 31

Rule Against Perpetuities

Back 31

No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest

Front 32

Analysis of When to Apply "Rule Against Perpetuities"

Back 32

1. Determine whether there is an interest that applies
2. When did the instrument creating the interest become effective?
3. Who were the lives in being when the instrument became effective
4. If we were back in time when the instrument became effective, when would 21 years after the last life in being be and is it at all possible it might take more than that time for the interest to vest or become impossible of vesting?
5. What most likely will happen to this interest which is not "good" under the RAP

Front 33

To what interests does the Rule against perpetuities apply?

Back 33

1) executory interests
2) contingent remainders
3) vested remainder in a class subject to partial divestment
4) powers of appointment
5) option contracts
6) pre-emptive rights of first approval

Front 34

Exceptions to applying the Rule Against Perpetuities in Options Contracts

Back 34

1) Tenant's option to renew an existing lease
2) Tenant's option to purchase a part or all of the leased premises
3) An easement or profit owner's option to extend the scope of its easement or profit

Front 35

What interests does the rule against perpetuities NOT apply to

Back 35

1) present possessory interests
2) possibilities of reverter
3) powers of termination/rights of entry
4) reversions
5) absolutely vested remainders
6) vested remainders in individuals subject to divestment

Front 36

3 Types of instruments which can create an interest subject to the RAP

Back 36

1) Deeds
2) Wills
3) Contracts

Front 37

How to determine when a Deed creating the interest becomes effective

Back 37

1) when written so as to include essential terms
2) executed by the grantor
3) delivered by the grantor with the present intent to divest itself of the right to control how title is to pass under the deed
4) AND accepted by the grantee

Front 38

How to determine when a Will creating the interest becomes effective

Back 38

1) When the testator executes valid will
2) and the Testator passes away

Front 39

How to determien when a Contract creating the interest becomes effective

Back 39

(options, rights of refusal, and preemptive rights)
- when the parties intend them to become effective

Front 40

Determine who were the lives in being at the time the interest was created

Back 40

Life in Being
- Human being + alive at time interest was created
AND
- Be named as a life in being
OR
- Have at least some potential interest in the property
OR
- Be named as a transferee of a prior interest
OR
- Be able to influence or affect who might take

Front 41

Determine when would 21 years after the last life in being be and is it at all possible that it might take more than that time for thhe interest to vest or become impossible of vesting

Back 41

The measuring life is the relevant life that enables you to prove that interest is valid
** the interest will be valid under the rule if it will vest or fail
1) during the lifetime of a relavant life
2) at the death of a relevant life
3) within 21 years of the relevant life

** If there is more than one measuring life then the interest must vest or fail withing 21 years after death of survivor of persons named

Front 42

Determine what will most likely happen to the interest which is not "good" under the RAP

Back 42

1) for the most part, courts merely strike from the instrument an interest that is invalid under the RAP
2) If the transfer is by grant, the grantor retains its reversionsary interest and is free to transfer it to another or retain it for ther grantor's benefit
3) If the transfer is by devise, and, if, because a third party's interest is invalid under the rule, the invalid future interest results in some reversionary interest in the testator
4) what role the invalid interest played in the transfer under the will
1. If the invalid interest
a. is so material to the will's distribution scheme so as to invalidate the entire devise, and
b. is not a part of the residuary clause,
the testator's reversionary interest typically passes as the residuary clause directs
2. if the invalid interest is so material to the will's distribution scheme so as to invalidate the entire devise, or if the invalid interest is a part of the residuary clause, the testator's reversionary interest passes as the intestacy statues direct

Front 43

Modern Trends in RAP

Back 43

1. Wait and See Doctrine

2) Cy Pres Doctrine

3) USRAP

Front 44

Wait and See Doctrine

Back 44

Validity of interests judged by actual events as they happen, and not by possible events that might happen. Wait and see what actually happens instead of determining at time interests is created

Front 45

Cy Pres Doctrine

Back 45

1. Determine whether interest violates RAP
a. if not, no further RAP analysis
b. If so, determine whether transferor's general intent wasa to violate common law rule
i. if so, do not modify interest's contingency
ii. if not, determine whether contingency can be modified so to comply with RAP and stisfy transferor's general intent
1. if so, apply modification and follow instrument's directives with modification rather than original contingency
2. if not, deal with interest as invalid under RAP

Front 46

USRAP

Back 46

provides an alternative 90-year vesting period and takes a "wait and see" approach in determining whether an interest actually vests within 90 years

Front 47

What does the USRAP apply to

Back 47

1) nonvested, donative, interfamily gifts of land, or to institutions

Front 48

USRAP Exception

Back 48

1. a nonvested property interest or a power of appointment arising out of (i) a premarital or postmarital agreement, (ii) a separation or divorce settlement , (iii) a spouse's election, (iv) a similar arrangement arising out do a prospective, existing, or previous marital relationship between the parties, (v) a contract to make or not to revoke a will or trust, (vi) a contract to exercise or not to exercise a power of appointment, (vii) a transfer in satisfaction of a duty to support, or (viii) a reciprocal transfer;

Front 49

Direct Restraints on alienation

Back 49

restraint intends to be a restraint

Front 50

Disabling restraints

Back 50

(generally unenforceable) prevents conveyance of property in some way for some time. If holder of restrained property conveys in a way contrarty to restraint, conveyance is annulled and set aside

Front 51

When is a disabling restraint invalid and unenforceable?

Back 51

if the restraint would make it impossible for any period of time from date of transfer to transfer restrained interest

Front 52

Do disabling restraints have a reversionary interest?

Back 52

no

Front 53

When is limited disabling allowed?

Back 53

when freedom of alienation does not apply

Front 54

Forfeiture restraints

Back 54

If attempting to convey property contradictory to restraint, property will be taken away and given to other party (movement of title)
Forfeiture restraints are more harsh then disabling because property can be taken away

Front 55

Is a forfeiture restraint on life estate for amount of time beginning with transfer good?

Back 55

yes

Front 56

Promissory restraint

Back 56

interest holder promises not to transfer property

Front 57

indirect restraint

Back 57

transferrability is hindered by attempt to achieve completely unrelated objective

Front 58

concurrent estates

Back 58

when two or more parties own interests in the same property at the same time

Front 59

tenancy in common

Back 59

(this is the presumption) a type of concurrent ownership where each cotenant is the owner of a separate and undivided share of the property and there is not right of survivorship

Front 60

Characteristics of Tenancy in Common

Back 60

1) Absent intent to convey unequal interests, presume that interests are equal
2) No right to survivorship means that when cotenant dies interests passes to heirs, not surviving tenant
3) estates can be different (i.e. life estate for one, and remainder for other)

Front 61

why is modern common law "tenants in common" rather than "joint tenancy"

Back 61

1) inequitable to give all property to surviving joint tenant and leave decedeant's survivor's without any interest
2) Joint tenant can convert interest to tenants in common with conveyance to third party without knowledge of other joint tenants

Front 62

Joint Tenancy

Back 62

a form of concurrent ownership where each cotenant wons an equal, undivided interest in property with rights of survivorship

Front 63

4 Unities Required for Joint Tenancy

Back 63

1) Unity of Time - interests must be taken at the same time
2) Unity of Interests - equal and identical interest in the property
3) Unity of Title - interest must be taken from same source (deed, will, or intestate)
4) Unity of Possession - all must have possessory interest in whole

Front 64

Can Joint Tenancy be converted into tenancy in common?

Back 64

yes, by two ways
1) unilateral act
- when tenant coveys interest to another
- Common law - lease severs
- NOW - lease does not sever
2) Mutual Agreement