Estates and Future Interests Terms

"and his heirs" creates a...

fee simple absolute

"for his life" creates a...

life estate

Escheat

The state takes property upon an owners death if there is no will & no heirs exist.

Life Estate

an estate which is not terminable at any fixed or computable period and has its duration measured by the life or lives of one or more persons

Life Estate Pur Autre Vie

A life estate in one person with another person serving as the measuring life.

Issue

lineal descendants of all generations of a particular person

Collateral kin

common ancestor but are not related by descent

Per capita

one who takes in his own right

Per Stirpes

one who takes by representation, one who takes in place of another who has pre-decesased the intestate

Reversion

"the residue of an estate left in the grantor, to commence in possession after the determination of some particular estate granted out by him" (Moynihan P. 94). Not conditional. Think life estate or non-fee simple interest.

A reversion continues to be classified as a reversion even if it is transferred to a third person.

Fee Simple Determinable

estate of general inheritance and potentially infinite duration (i.e., it is a fee simple), but it is subject to a self-executing stated contingency or special limitation. In the words of Prof. Moynihan, "the fee simple determinable could come to an end or expire automatically upon the happening or non-happening of an event stated as a limitation in the conveyance or will creating the estate.

Fee Simple Absolute

- Largest estate in our legal system.

- estate of general inheritance and potentially infinite duration

intestate

when a person dies without leaving a will he is said to have died intestate and his property will be distributed to his heirs

heirs

those persons who take under the statute of descent and distribution. Note well: A living person has no heirs!

Fee Simple Subject to a Condition Subsequent

an estate of general inheritance and potentially infinite duration (i.e., it is a fee simple), but it is subject to a condition which, if broken, allows the Grantor to elect to terminate the Grantee's estate. Here is how Moynihan describes this estate: "A fee simple subject to a condition subsequent exists when the fee simple is subject to a stated condition subsequent (rather than a limitation) which, if it occurs, invokes a power in the grantor to terminate the estate granted on the happening of the condition, if the grantor so chooses

Possibility of Reverter

The future interest that the grantor retains when he grants a Fee Simple Determinable or a Fee Simple Conditional. (Possibility of Reverter is different from a Reversion)

Power of Termination (Right of Re-entry)

The future interest that the grantor retains when he grants a Fee Simple Subject to a Condition Subsequent.

Words of Purchase

The words of the conveyance that tell us who takes the estate being granted.

E.g., "To Fernando Tatis Jr. and his heirs"

Words of Limitation definition

The words of the conveyance that describe the estate being granted (not the persons who take the estate).

E.g., "and his heirs"

Waste

Neglect or misconduct on the part of the tenant of a life estate resulting in damage to the property. Doesn't include ordinary depreciation.

Waste may be either voluntary or permissive (failure to use reasonable care)

Duties of a Life Tenant (Moore v. Phillips)

1. Life tenant has a duty to protect the property so that when the remainder interest becomes possessory it can pass on to remaindermen.

2. Law imposes on tenant obligation to return premises to the remandermen/landlord at the end of the term unimpaired by the negligence of the tenant

3 Proposed Rules for Defining Waste

1. Any action which alters the property from its original form constitutes waste, because the owner of the future interest is entitled to receive the property substantially in its original condition (reasonable wear and tear excepted).

2. Whether waste has been committed depends on the value of the property. Any action which results in a decrease in the value of the property is waste; any action which results in an increase in the value of property is not waste.

3. Whether or not certain acts constitute waste is to be determined in accordance with the intention of the party who created the present and future interests. If the intention is not expressed in the deed or will, the law should assume that the parties intended that the life tenant is entitled to use the land in a reasonable manner in light of all the relevant facts and circumstances.

Fee simple defeasible

an estate of potentially infinite duration (the limitation/condition may never occur) there is a possibliity that if the limitation/condition occurs, then the estate could revert to the grantor.

"so long as" "until" "during" "while" are Words of ___________. They create a ___________.

1. Limitation

2. Fee Simple Determinable in the grantee and a Possibility of Reverter in the grantor.

"on condition that" "provided that" are Words of ___________. They create a ____________.

1. Condition

2. Fee Simple Subject to a Condition Subsequent in the grantee and a Power of Termination in the grantor.

dead hand control

when a property reverts to a dead person's ownership and that dead person's fee simple determinable dictates how it is used after he is dead. (my words, not Duncan's)

precatory statement

words which express the wish of the grantor but do not bind the grantee to any particular kind of use of the estate (my words, not Duncan's)

Vested Remainder in Fee Simple Absolute

the future interest, the remainder of a life estate for example, which is granted to another not the grantor or grantee (Tucker's interest in this example: To Duncan for life, then to Tucker Carlson and his heirs)

Fee Simple Conditional

The grantee retains control of the property so long as the grantee abides by the condition placed by the grantor. If he does not abide by the condition, the property reverts to the grantor who may have "dead hand control."

Moynihan Example: "To A and his heirs on the condition that A have an heir of his body."

Prior to 1285 the English courts "held that, upon the birth of issue to [Arnold], the condition had been fulfilled and [Arnold then] had the power to alienate the land in fee simple.

But, the courts did not go so far as to hold that [Arnold] acquired a fee simple for himself.

Thus, if [Arnold] had issue but later died without any issue who survived him and [Arnold] had not alienated the land to another during his life, the land reverted to the grantor even though [Arnold] had surviving collateral relatives."

Fee Tail

an estate of potentially infinite duration and of inheritance, however, it is inheritable only by the "heirs of the body" of the grantee, i.e., by the lineal descendants of the original grantee of the Fee Tail.

What happens if you attempt to convey a fee tail?

You can convey fee tail away but all you can give is a life estate for the life of the grantor. When grantor dies, the estate will go to the issue of the grantor, not the grantee because the restrictions imposed by De Donis prevented B from making any conveyance that would cut off the rights of B's issue or the reversioner.

"and the heirs of his body" creates/retains what?

1. Creates Fee Simple Conditional (before 1285)

2. Creates Fee Tail (after 1285)

Grantor retains a Possibility of Reverter in both 1 & 2

3. Creates Fee Simple Absolute (under modern statute)

Who can inherit a fee tail?

Fee tail is only inheritable by certain heirs. it doesn't go to any heirs, only to issue of the original tenant in tail.

Heir

persons who take under the statute of descent and distribution after someone's death

The doctrine of destructibility of contingent remainders

A contingent remainder must vest on or before the termination of the preceding estate; if it does not, it is destroyed.

The Doctrine of Merger

A principle of the common law that provides that whenever two consecutive vested estates in land are owned by the same person the smaller of the two estates will be absorbed by the larger.

- Think of a large company like Microsoft absorbing a small software company

The Rule in Shelley's Case

If in a conveyance or a will a freehold estate is given to a particular person, and, in the same conveyance or will, a remainder is created in the heirs or the heirs of the body of that particular person, that particular person takes both the freehold estate and the remainder. See Moynihan P. 138. [Essentially, they merge to become one FSA interest]

Thus, in order for the Rule to operate:

(1) There must be a grant of a life estate (or, in theory, a fee tail) to a particular person, AND

(2) In the same instrument, a remainder must be given to the heirs or heirs of the body of the life tenant.

If the Grantor conveys a Life Estate, a Term for Years (leasehold), or a Fee Tail, what does he retain?

Reversion.

If the Grantor conveys a Fee Simple Conditional, what does he retain?

Possibility of Reverter (also known as a power of termination or a right of re-entry)

If the Grantor conveys a Fee Simple Subject to a Condition Subsequent, what does he retain?

Power of termination/Right of Reentry

If the Grantor conveys a Fee Simple Determinable, what does he retain?

Possibility of Reverter

Remainder

a future interest created in someone other than a transferor which, according to the terms of its creation, will become a present estate (if ever) immediately upon and no sooner than the expiration of all prior estates created simultaneously therewith

[remainder never takes effect by divesting a prior vested interest, i.e., cutting short, a prior interest; e.g., when the life estate naturally ends, remainder comes into possession].

Grutz, the owner of Blackacre in FSA, conveys it: To Roger Clemens for his life, then to Pedro Martinez and his heirs. Why does Pedro have a remainder as opposed to an executory Interest?

1. The future interest was created in Pedro, not in Grutz, the transferor.

2. It will become possessory immediately upon and no sooner than the expiration of Clemens' life estate (i.e. it does not cut off Clemens' life estate, but takes effect only upon the natural termination of the life estate).

A remainder can be created after a ____ ____, a ____ ____, or a _____ __ ______, but never after any kind of a _____ ______ (absolute, conditional, or defeasible).

1. life estate

2. fee tail

3. term of years

4. fee simple

Can remainders be created in fee simple?

Can they be created for life?

In fee tail?

For a term of years?

Can they be made defeasable?

Yes

Yes

Yes

Yes

Vested Remainder

a remainder which is

1. in favor of an existing and ascertained person; and,

2. not subject to any condition precedent (it can be subject to a condition subsequent).

Contingent remainder

remainder which is:

(a) to an unborn person or persons; or,

(b) to an unascertained person or persons; or

(c) subject to a condition precedent.

e.g. "To Dr. Butcher for life, remainder to those children of Dr. Butcher who are alive at his death and their heirs"

e.g. "To Dr. Tarr for life, and, if Prof. Fether (a bachelor) marries, then to Prof. Fether and his heirs" Not transferable under common law but now in most states it is transferable.

Indefeasibly Vested Remainder

Remainder which is to an ascertained person or persons, not subject to any condition precedent, and not subject to being divested or cut down in size: Grutz conveys "to Dr. Butcher for life, then to Dr. Paine and his heirs."

Vested Remainders Subject To Complete Defeasance (also known as a vested remainder subject to total divestment)

a remainder subject to a condition subsequent which operates to divest or cut off an otherwise vested remainder.

e.g. Grutz conveys "to Dr. Butcher for life, remainder to Billy Budd and his heirs, but if Billy Budd dies in Dr. Butcher's lifetime, then to Dr. Paine and his heirs" (i.e. if he fails to satisfy the condition subsequent and dies in Dr. Butcher's lifetime, his vested remainder will be divested in favor of Dr. Paine's executory interest).

[if the remainder is subject to a condition precedent, it is a contingent remainder] Jack remembers it by thinking "Subject = Subsequent"

If the remainder's conditional language comes after language which would otherwise create a vested remainder, it will probably be construed as a ________ ________ which results in a ________ ________ ________ ________ ________ ________.

1. condition subsequent

2. vested remainder subject to complete defeasance

If the conditional language comes before or is part of the language creating the remainder, or if it is incorporated into the description of the remainderman, it will probably be construed as a ________ ________ which results in a ________ ________.

1. condition precedent

2. contingent remainder

Where there is substantial doubt as to whether conditional language is precedent or subsequent, the courts generally express a preference for a _________ construction.

Vested

Vested Remainders Subject To Open

Vested remainders which are subject to being diminished in size in favor of additional members of the class of remaindermen, i.e. a vested remainder subject to open is a remainder to a class of persons which may increase in number.

E.g., Grutz conveys "to Dr. Butcher for life, remainder to his children and their heirs."

At the time of the grant, Dr. Butcher is alive and has one child, Sid. Sid takes a vested remainder subject to open, because if Dr. Butcher has additional children, Sid will have to share with them.

Remainders

Never take effect by divesting a prior vested interest; remainders take effect upon the expiration of the preceding estate. Moreover, remainders may not be created to follow a fee simple, so any interest created in a transferee following a defeasible fee will always be an executory interest.

Fee Simple Determinable With an Executory Limitation

This is a Fee Simple Determinable which, upon the occurrence of the stated limitation, will automatically expire and pass to a person other than the grantor.

What are the four types of defeasible estates

- Fee Simple Subject to an Executory Interest

- Fee Simple Determinable With an Executory Limitation

- Fee Simple Determinable

- Fee Simple Subject to a Condition Subsequent

Recite the Rule Against Perpetuities

"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."

What are the three questions you should consider when working through a rule against perpetuities (RAP) problem?

(1) Something that will accelerate the determination of the contingency (e.g. the Doctrine of Destructibility of Contingent Remainders)

(2) A "validating life" i.e. someone you can point to and say with certainty that the contingency will be determined one way or the other not later than 21 years after that person's death.

(3) A possible after-born person who might delay the determination of the contingency beyond the period of the Rule.

Life Estate Determinate

Life estate with a condition subsequent attached to it.

Executory interest

"If it is not a remainder then it must be..." the final future interest will be in a third party as opposed to the Grantor.

Springing Executory Interest

Distinctive situation in which the grantor holds the present possessory estate and only a future interest is conveyed by grantor. Essentially, the springing executory interest fills a gap in possession in which the estate reverts back to the grantor. Cuts off grantor's own interest in the property.

E.g. John conveys "to B for life, and two years after B's death to C andhis heirs." ■ B has a Life Estate■ John has a two year reversion■ C has a springing executory interest

E.g. O sells land to B for 10 years, then to heirs of C, a living person

E.g. O sells land to B and his heirs to have and to hold from and after the marriage of B to C

E.g. O sells land to B for life, and one year after B's death, to C and his heirs

Shifting Executory Interest

A future interest in a third party (i.e. not the Grantor) that divests the prior interest if the prior estate holder does not satisfy a condition subsequent. Cut off grantee's interest in the property.

e.g. A conveys "to B and his heirs, but if B dies without having married, then to C and his heirs". ■ B has a FSSEL■ C has a shifting executory interest

e.g. O sells land to B and his heirs but if B becomes bankrupt then to C and his heirs

e.g. T devises Blackacre to B for life, then to C and his heirs but if C dies before B leaving no issue surviving him then to D and his heirs

What is the difference between remainders and executories?

A remainder never divests a prior interest

An executory can divest a prior interest.

How Jack remembers it: If you are an executive, you have power to divest the property from someone else.

Fee Simple Subject to an Executory Limitation

This is a Fee Simple Subject to a Condition Subsequent which, upon the occurrence of the stated limitation, automatically expire and pass to a person other than the grantor.

What is the difference between an fee simple determinable with an executory limitation and a fee simple subject to an executory interest?

FSSEInterest: Not necessarily a limitation. Something might just happen to divest the interest. Similar to a fee simple subject to a condition subsequent. FCD w/ executory limitation: Limitation only on certain use. Similar to a FSD.

What are all of the potential terms for a right of entry?

Possibility of reverter

Power of Termination

What is the other potential term for a vested remainder subject to complete defeasance?

Vested remainder subject to total divestment

What are the four steps to a RAP problem according to Medill?

1. Name the interests (only a CR, EI, or VRSO need to be tested by RAP)

2. Find when the perpetuities period begins (when the grant is "made")

3. Locate the lives in beings at the start of the perpetuities period

4. Test the conveyances using the tether method (for EIs) or the timeline method (for CR or VRSO)