Present Estates and Future Interests (broadly)

Future Interests are NOT on the exam

what is a present estate?

the right to possess the property now

what is another word for present estate?

possessory estate

if “A” owns a present interest in Greenacre, what does that mean?

A does NOT “own” the land itself

A owns an estate in Greenacre. Rather, A owns a bundle of legal rights to that land that enable A to exclude, use, transfer the property for the term of their estate

what is a future interest?

the right to take possession in the future under specified circumstances

do present estates and future interests give someone the right to own the land?

NO

it concerns ONLY the duties and rights of a person in relation to others with regards to the land.

the matter of land use regulation, that governs the relationship between the owner and the state, is separate.

what is the basic principle of the estates system?

multiple people can hold interests in the same land at the same time

what are freehold estates?

a legal interest in real property that lasts for an indefinite duration

there are 7 main types of freehold estates

what are the 7 types of freehold estates?

1. fee simple absolute (often called “fee simple”)

2. fee simple determinable

3. fee simple subject to a condition subsequent

4. fee simple subject to an executory limitation

5. life estate absolute (typically called “life estate”)

6. some form of defeasble life estate

7. fee tail

which type of freehold estate is the most common?

fee simple absolute

how are present estates and future interests created?

by sale, lease, will or trust

what is intestate succession?

a process through which estates and future interests that already exist may be transferred

what is the largest type of estate recognized by law?

fee simple absolute

what is a trust?

a legal arrangement in which one person or entity holds title to property for the benefit of another

what is dead hand control?

a problem in which owners may seek to control who owns the property long after the die

what is the issue with dead hand control?

allowing grantors to do this may promote their interests and even enhance alienability

also undermines autonomy of future owners and the efficient use and transfer of property

who are testators?

the people making the will

who are devisees?

the beneficiaries under the will

what are holographic wills

wills where the signature is not witnessed by the will is in the handwriting of the testator

what is a residuary clause

a provision designating who gets any property of the testator not specifically given away

what is intestate

you die without a will

what is an heir?

person or people selected by the operation of law

what is probate?

a judicial proceeding in which heirs and beneficiaries receive notice

probate takes time and money - an average of 18 months and 3% of the value of the estate

what is a fee simple estate?

an estate that could potentially last forever

what is a life estate?

an estate that lasts only for the life of a particular person

what is a term of years estate?

any estate not limited by a natural life or event, but by a specific period of time

this type of estate is not subject to the same rules b/c they were considered non-freehold estates under medieval law

could be as short as 6 months or as long as 100 years

what are the 4 rules for understanding present estates and future interests?

1. One cannot grant more than one has

2. Unless the grant contains limiting language, the grantor will be presumed to have given away all of the transferred interest (they grant the property forever)

3. Whatever is not granted remains with the grantor

4. Future interests generally pass on death just like other property unless otherwise specified

what is a fee simple interest?

a present estate that could potentially last forever

the fee simple interest does not necessarily end because of lapse of time or death

what are the four fee simple estates?

1. fee simple absolute

2. fee simple determinable

3. fee simple condition subsequent

4. fee simple subject to executory limitation

what is fee simple absolute?

a fee simple without an associated future interest

because NO ONE own a future interest in the property, the grantor is free to determine who owns it in the future and how

what is a defeasible fee?

present estates that terminate at the happening of a specified event, other than the death of the current owner

what are the two distinctions of defeasible fees?

1. whether the future interest is in the grantor or a third party

2. whether the future interest becomes possessory automatically when the stated event occurs or becomes possessory only if the future interest holder chooses to assert his property interest rights

what is a fee simple determinable?

when the future interest reverts automatically to the grantor on the happening of stated event

what is a possibility of reverter?

the future interest in a fee simple determinable