Estates and Future Interests

Fee Simple Absolute

Ownership with complete control and no limitations

Fee Simple Absolute Magic Words

and their heirs

How long does a FSA last

Forever

Cole v Steinlauf Rule

the words “and his heirs” is necessary for a FSA

Does Nebraska require “and their heirs” for FSA?

No

Intestate

Term for a person who dies without a will

Inheritable

Property that passes to heirs under the laws of intestacy

Testate

Term for a person who dies with a will

Devisable

Property that is transferred by will

Collateral Kin

People who have a common ancestor but are not a direct descendent

Per Capita Property

Property divided equally among living descendants

Per Stirpes

Property passes to the beneficiary’s kids if they die, not other beneficiaries

Life Estate

property ownership that lasts only for the life of the person

Doctrine of Waste

Protects property by stopping one with limited rights from damaging or reducing its value

Voluntary Waste

Occurs when a life tenant intentionally harms or diminishes the value of the property

Permissive Waste

Occurs when a life tenant fails to take care of the property, leading to its decline in value

Ameliorative Waste

Changes made by a life tenant that increase the property's value but are unauthorized

Fee Simple Determinable (FSD)

Freehold estate that automatically terminates upon a specified event & reverts back to grantor

Fee Simple Subject to a Condition Subsequent (FSSCS)

Freehold estate that may be terminated if a condition occurs, but does not automatically revert

Words of limitation

so long as, until, during, while

Words of Condition

On the condition that, provided that

Does the court prefer FSD or FSSCS

Law abhors forfeiture- FSSCS

Fee Tail

Restricts inheritance to a specific line of descendants

Fee Simple Conditional

Estate that automatically reverts if a condition is met

Future Interest

Right to possess property in the future, contingent upon a specified event

Future interests that go back to a grantor

Possibility of Reverter, Reversions, Power of Termination

Future interests to the grantee

Vested remainders, contingent remainder

Future interest to a third party

Executory Interest

Possibility of Reverter

Future interest retained from a FSD, automatically reverts

Power of Termination

Future Interest from a FSSCS, grantor must take steps to get it back

Reversion

Future interest when transferring a lesser estate (life estate, term, fee tail)

Vested Remainder

Given to a born person at the time of creation and it’s not subject to a condition precedent

Vested Remainder Subject to Open

Future interest for group of people when additional people can join the group after it was created

Contingent Remainder

Remainder given to an unborn or uncertain person OR subject to a condition precedent

Doctrine of Destructibility

Contingent remainder is destroyed if it does not vest at the termination of the preceding estate

Doctrine of Merger

If two consecutive estates are owned by the same person, the lesser estate combines with a greater estate and becomes one

Rule in Shelley’s Case

A life estate automatically includes their heirs as purchasers of the remainder interest, rather than as a contingent remainder

Executory Interest

Future interest held by a third party that will take effect upon a specified event, rather than at the termination of a prior estate

Springing Executory Interest

Executory interest that becomes possessory upon the occurrence of a specified event, typically after a gap in possession

Shifting Executory Interest

Executory interest that becomes possessory upon the occurrence of a specified event that terminates a prior interest, often immediately after the prior estate

Rule Against Perpetuities (RAP)

An interest must vest or it will fail 21 years after the death of a person alive at the time it was created

RAP Steps

1. Determine the interest being created

2. Identify the relevant measuring life

3. Check if the interest vests within the allowed period

4. Analyze any potential violations of the rule