Memory Property Future Interests

Front 1

Life Estate

Back 1

• Estate that endures for the lifetime of the grantee

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Life Estate Pur Autre Vie

Back 2

• Life estate “for another’s life.”
• An interest in land which terminates at the end of a 3rd person’s life (not measured by the grantee’s life).

Front 3

Fee Simple

Back 3

• “Fee simple” signifies that it can last forever. “Absolute” means there are no limits on it
• Can be transferred both by will and inter vivos.
• Example: “To A and his heirs”

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Words of Limitation

Back 4

• Tells us how long a grant is for
• Example: Words of limitation would be found in the Habendum clause

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Habendum Clause

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• Part of the deed that controls and tells us what the grant transfers, the limiting part of the deed
o Defines the extent of the interest being granted and any conditions affecting the grant.
• Introductory words usually “to have and to hold”

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Words of Purchase

Back 6

• Tells us to whom the grant is given

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Fee Tail

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• A possessory interest that may endure forever if the designated bloodline continues
• Example: “To A and the heirs of his body”
• Born out of the desire to limit property to bloodline once property is attained – can only leave it to your children (family property).

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Fee Tail - Massachusetts

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o Recognized in common law form, except that the tail can be “docked” by inter vivos transfer

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Fee Tail - Texas

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o Fee tail abolished. Any language attempting to create a fee tail will be construed as granting a fee simple absolute

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Fee Tail - Oklahoma

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o If the grant contains a “gift over,” it will be recognized as a valid restriction for the life of the initial grantee (who holds a fee simple subject to executory limitation), but
o Upon the death of the initial grantee the transfer ripens into a fee simple absolute if the grantee dies with issue.
o If the grantee dies without issue, the executory interest takes a fee simple absolute
o If the grant does not contain a “gift over,” the grant is treated as a fee simple absolute

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Fee Tail - Florida

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o Grantee takes a life estate, and issue take a remainder in fee simple absolute.

Front 12

Shifting Executory Interests

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• Arise from grantee to grantee (3rd party)

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Springing Executory Interests

Back 13

• Arise from grantor to grantor

Front 14

Future Interests of Grantor

Back 14

• Possibility of reverter
• Right of re-entry
• Reversion

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Future Interests in the Grantee

Back 15

• Vested Remainder
• Contingent Remainder
• Executory Interest

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Reversion

Back 16

• A future interest remaining in the grantor (or in the successor in interest of a testator) who transfers a vested estate of a lesser quantum than that of the vested estate which he has
• Property returns to the original grantor – usually when bloodline runs out or the contingency is not met by the grantee
• If there is a contingent remainder, then there is a reversion
• If you haven’t given away the “forever” then you have a reversion

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Possessory Interest

Back 17

• Whoever has the “keys to the cottage” has the possessory interest
• Example: “To A and the heirs of his body”

Front 18

Contingent Remainder

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• Future interest given to grantee
• Contingent if:
(1) given to unascertained person or
(2) made contingent upon some event occurring other than natural termination of preceding estates (i.e. subject to condition precedent)

Front 19

Vested Remainder

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• if the property doesn’t go to unascertained persons and is not subject to a condition precedent, then it’s a vested remainder
• when a contingency is met, the interest vests (for example: if the contingency was upon B’s 21st birthday, when B turns 21 his future interest will become a vested interest)

Front 20

Alternative Contingent Remainders

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• A remainder in which the disposition of property is to take effect only if another disposition does not take effect
• Example: “To A for life, then to A's children and their heirs, but if at A's death he is not survived by any children, then to B and her heirs.”
o A’s children have a contingent remainder in a fee simple absolute. B has an alternative contingent remainder in a fee simple absolute followed by a reversion.

Front 21

Docking the Tail

Back 21

• Type of fee tail that may endure forever if the designated bloodline continues, but pursuant to Massachusetts’ law the tail can be docked by inter vivos transfer.
• Example: In Massachusetts, O conveys “to A and the heirs of her body.” A dies leaving her only child B as her sole heir. B dies without having had children, devising all her property to C.
o There are no heirs to the body therefore fee tail terminates, reversion to O.
o The attempt to devise all of the property to C has no effect on the fee tail, because the fee tail terminates automatically when you die without issue, so it makes a will void (no property to be transferred).
• By docking the tail and placing the property temporarily in the hands of lawyer’s secretary (strawman), then you are cutting off the fee tail and original owner can then hold it as a fee simple absolute.
• The public policy behind the MA style is that the person who made the transfer would then suffer the loss.

Front 22

Freehold Estates

Back 22

• Land held in fee simple, as opposed to leasehold (leased land). You own the property and the land on which the property sets.
• Types of estates: Leasehold, Freehold, Term of Years.
• Fee Simple, Fee Tail, Fee Simple Conditional, Fee Simple Determinable, Fee Simple on Condition Subsequent, Fee Simple subject to an Executory Interest, Life Estate and Qualified Fees

Front 23

Executory Interest

Back 23

• An executory interest is a future interest, held by a third person, that can take effect only by divesting another’s interest
• Grantee’s future interest in the land, which begins upon some condition or occurrence of some event rather than upon the end of a natural interest.
o There are shifting executory interests (divests grantees) and springing executory interests (divests grantors)

Front 24

Fee Simple Defeasible

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• An estate that ends either because there are no more heirs of the person to whom it is granted or because a special limitation, condition subsequent, or executory limitation takes effect before the line of heirs runs out.
• Types: Fee Simple Determinable, Fee Simple Subject to…

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Fee Simple Determinable

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• Fee so limited that it will end automatically when a stated event happens.
• Example: “to Albert and his heirs while the property is used for charitable purposes”
• Future Interest: possibility of a reverter in the grantor OR an executory interest in a 3rd person
• Buzzwords: “So long as”, “As long as”, “During”, “While”, “Unless”, “Until
• Aka: fee simple on a special limitation (will expire by this limitation if it occurs)

Front 26

Fee Simple Subject to Condition Precedent

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• Contingent – have to wait to see if condition occurs before the act can follow through
• Buzzwords: “if”
• Example: “I’ll give you this book if you amjure the course.” You have to achieve the highest grade before the book is given (the transfer takes place).

Front 27

Fee Simple Subject to Condition Subsequent

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• Divesting – does not automatically terminate but may be cut short or divested at happening of a particular event.
• Future interest: a right of re-entry retained by the grantor OR an executory interest in 3rd party
• Buzzwords: “but if”, “provided, however”, “on condition that”
• Example: “I’ll give you this book but if you fail to amjure the course you must give it to him.
o Here the book is given to you immediately (transferred right away) but can be required to be given away if you don’t achieve the highest grade.

Front 28

Right of Re-entry

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• aka power of termination
• Grantor transfers an estate subject to a condition subsequent and retains power to cut short or terminate the estate
• Buzzwords: "on condition"

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Possibility of Reverter

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• Future interest remaining in the grantor or his heirs when a fee simple determinable is created
• All states allow these to be inherited or devised by will, but not all allow inter vivos transfer
• If conveyance says that the property is to revert to the grantor this is a sign of fee simple determinable

Front 30

Fee Simple Subject to an Executory Limitation

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• Provides for the estate to pass to a third party upon the happening of a stated event
• A fee simple that, upon the happening of a state event, is automatically divested by an executory interest in a transferee

Front 31

Condition Precedent

Back 31

• Condition expressly stated in the instrument
• Must occur before the remainder becomes possessory
• Remainder subject to condition precedent (Contingent remainder)
• “If the conditional element is incorporated into the description of, or into the gift to the person taking the remainder, then the remainder is contingent”

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Remainder Vested Subject to Open

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• A remainder in a class of persons is vested if one member of class is ascertained and no condition precedent exists
• Shares of members are not fixed because more persons can become members of the class but at least one is qualified to take possession
o “to A for life, then to A’s children and their heirs”
 A has a child B, B has Vested subject to open because more children could be born, thus does not know exact share until A dies;

Front 33

Remainder Vested Subject to Partial Divestment

Back 33

• A remainder in a class of persons is vested if one member of class is ascertained and no condition precedent exists
• Subject to divestment on the occurrence of a condition subsequent
o “to A for life, then to B, but if B does not survive A, to C”
 B has vested remainder subject to divestment
 C has executory interest

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Indefeasibly Vested Remainder

Back 34

• Certain to become possessory in the future and cannot be divested (no executory interest)
o “to A for life then to B and her heirs” B has indefeasibly vested remainder certain to become possessory upon termination of the life estate
 B has vested remainder in fee simple absolute
• Certain to be entitled to retain permanently thereafter the possessory estate so acquired