Ls - Estates And Future Interests

Front 1

Define fee simple absolute

Back 1

The largest estate. Holder has full posessory rights. "To A and his heirs" To A are words of purchcase, "And his heirs" are words of limitation. Can sell, divise or divide it. Cannot be cut short.

Front 2

Define Defeasible Fees

Back 2

Any fee that can be cut short. Includes fee simple determinable, fee simple subject to a condition subsequent and executory interests.

Front 3

Define Fee Simple Determinable

Back 3

Estate automatically terminates on the happening of a stated event and goes back to the grantor, called a possibility of reverter. Uses words of duration such as: as long as, while, during, until. Possibility of reverter is left in the grantor.

Front 4

Define Fee Simple Subject to a Condition Subsequent

Back 4

Grantor retains the power to terminate the estate of the grantee upon the happening of a specified event, Right of entry (re-entry). The grantor must exercise his power of termination/right of entry by bringing suit or making re-entry to discontinue the estate of the grantee. Language: “upon condition that” “provided that” “but if” “if it happens that”

Front 5

Define Fee Simple Subject to an Executory Interest

Back 5

Can be fee simple determinable or subject to a condition subsequent. An estate upon the happening of a stated event is divested in favor of a 3rd person rather than the grantor.

Front 6

Fee Tail

Back 6

Language: “to A and the heirs of his body." To A - words of purchase. And the heirs of her body - words of limitation. Can have fee tail female, fee tail male, fee tail special.

Front 7

Jurisdictional Splits on Fee Tail

Back 7

1) Most US jurisdictions have abolished fee tail and have enacted statutes where any attempt to create a fee tail results in the creation of a fee simple in the first grantee. 2) Minority – convert the fee tail into a life estate in the first grantee with a fee simple to the descendants of the first taker. 3) Minority – fee tail in first taker, lineal descendants acquire a fee simple 4) A few states still allow fee tail as it was at common law (Delaware, Maine, Massachusetts and Rhode Island) However, they can convey away, called disentailing.

Front 8

Define Life Estate

Back 8

The right to occupy, possess or otherwise use a property during one's life time. The right in the property exists so as the right holder is alive. Can be for the life of the grantee or for the life of another (per autre vie). To A – words of purchase. For Life – words of limitation. Can only transfer the amount you own – until your death. If no executory interest is state it reverts to the owner.

Front 9

Duties of Life Tenant

Back 9

Doctrine of Waste: Tenant for life is entitled to all the ordinary uses and profits of the land; but he can’t lawfully do any act that would injure the interests of the person who owns the remainder or the reversion. If he does, the future interest holder may sue for damages and/or to enjoin such acts. Court can order sale to prevent waste. Baker v. Weedon: Judicial Sale of property is drastic and will only be done if it is the best interest of the parties. When there is waste and when there is injury to the property.

Front 10

What are the two types of waste?

Back 10

Affirmative waste (purposeful) and Permissive Waste (failure to act-- negligence)

Front 11

What are the future interests in both grantors and 3rd parties?

Back 11

In the grantor: remainder, possibility of reverter, right of reentry. In a 3rd party: vested remainder, contingent remainder, executory interest

Front 12

Define Reversion

Back 12

Property goes back to the grantor, usually follows a life estate.

Front 13

Define Right of entry

Back 13

Applies to fee simple subject to a condition subsequent, must be exercised.

Front 14

Define Possibility of reverter

Back 14

Applies to when simple determinable, automatic

Front 15

What is a remainder?

Back 15

Remainders are capable of becoming possessory at the termination of the preceding estate. Remainders do not cut short the prior estate, they are polite.

Front 16

What is a vested remainder? Define the three types of vested remainders

Back 16

Vested remainders are remainders in an ascertained person and no condition precedent. 1.) Indefeasibly vested: certain to become possessory in a specific individual 2) Vested remainder subject to complete divestment: is certain to become possessory unless some specified event occurs 3) Vested remainder subject to open: a class gift that may be enlarged by presently unascertained persons.

Front 17

What is a contingent remainder?

Back 17

A remainder that is either (a) created in an unascertainable person or (b) subject to a condition precedent other than the natural termination of the preceding estates

Front 18

Define Executory Interests. What are the two types of executory interests?

Back 18

The prior estate is cut short, interest goes to a third party. – not polite. 1) Shifting - gos from one grantee to another upon the occurrence of some condition. 2) Springing - Future interest that divests the transferor of the estate following a gap in possession, it springs out of the transferor’s reversion. From grantee – revert to grantor – springs to another grantee.

Front 19

Policies regarding future interests

Back 19

1) vested remainder over a contingent remainder 2) contingent remainders over executory interests 3) remainder cannot follow a fee simple, if something cuts it short, it is an executory interest. 4) After a life estate, if the first future interest is a contingent remainder, the second one is also a contingent remainder. 5) After a life estate, if the first future interest is a vested remainder, then the second remainder is an executory interest.

Front 20

Define Destructibility of contingent remainders

Back 20

If the preceding estate ends while the contingent remainder still remains, the contingent remainder is destroyed

Front 21

Doctrine of merger

Back 21

The present interest and future successive estates will merge if they are held by the same person, so long as there is no intervening vested interest.

Front 22

Rule in Shelley’s case

Back 22

When a conveyance purports to convey from “O to A for life, remainder to A’s heirs” the remainder is destroyed and the conveyance is rewritten to be a life estate to A and a remainder if fee simple absolute to A’s heirs.

Front 23

Doctrine of Worthier Title

Back 23

When a conveyance purports to convey “O to A for life, remainder to O’s heirs” the doctrine operates to destroy the remainder to O’s heirs. It becomes simple a life estate with a reversion.

Front 24

Rule Against Perpetuities: State the Rule

Back 24

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.

Front 25

RAP Attack

Back 25

1) Analyze each estate that has been created. 2) Determine when those interests are created. (Is it a conveyance or a will?) 3) Does the RAP apply? Make sure the interest is a contingent remainder, an executory interest or vested remainders subject to open (class gifts.) If so, the rule applies. If not, it isn’t a RAP Problem. 4) Narrow to the interests where the rule may be violated. (Throw out any interests that aren’t subject to the RAP.) 5) Identify the life in being for the interest that may be violated. (Intervivos, someone alive when grant was made. Will, life of a person when testator died. 6) Will the interest vest or become certain to fail in the life in being plus 21 years? To vest means to become either a present possessory interest or a vested interest. If you can identify any circumstance when the interest might vest after the deadline, then the RAP has been violated. If no such series exists, the interest is valid. You may need to go back to another life in being. 7) If you strike the interest, it is as if the interest never existed.

Front 26

Special Rules for RAP

Back 26

1) Fertile Octogenarian: A legal fiction which means that, for the purposes of the, a woman in her eighties can conceive and give birth. Actually both males and females. 2) Precocious Toddler: A legal fiction, which assumes that a living person is fertile at birth. 3) Unborn Widow: widow is not born at the time of the interests and so cannot be a life in being - the grantor could get married again, can’t determine widow until he dies, she may not be a life in being. 4) Slothful Executor: a situation where the executor of the estate does not probate the will for many years after the testator's death. So, gift explicitly conditioned on distribution violate RAP.

Front 27

Four Jurisdictional Splits for RAP

Back 27

1) Common law RAP - apply the RAP as of the date of the creation or attempted creation of the contingent future interest. 2) Wait and see: You wait and see for the perpetuities period, life in being plus 21 years. You actually wait and see what happens – whether the interest will need to be stricken after the life in being plus 21 years. 3) USRAP: CL rule or wait and see for 90 years 4) Cy Pres- Texas statute: Allows courts to reform the interests so that they do not violate the rule to the fullest extent consistent with the creator’s interest.