properties class lecture in estates Interests in Estates
Overview of Future Interests in Estates
Discussion of states of future interest, focusing on feasible estates.
Summary of topics covered in previous week.
Review of Simple Life Estates
Simple life estates have no future interests or restrictions on duration.
Key Characteristics:
Cannot coexist with a future interest.
Automatically reverts to the original grantor or their heirs.
Florida law restricts transfer of interest to lineal descendants only.
Introduction to Defeasible Estates
Definition:
Estates capable of being taken away or defeased.
Origin of term relates to being able to take away fee ownership (similar to fee simple).
Types of Defeasible Estates:
Feasible Determinable
Feasible Subject to Condition Subsequent
Feasible Subject to Executory Limitations
Defeasible estates do not concern waste like life estates do.
Fee Simple Determinable
Characteristics:
Automatically ends upon the occurrence of a specific event.
Created through specific limiting phrases: "so long as", "while", "during".
Example:
"To A so long as the land is used as a farm."
If A fails to use the land as a farm, the estate automatically ends.
Reversion:
Upon termination, reverts to the original grantor O.
Future interest held by O is called a possibility of reverter.
Example Application: County grants land to ASL with stipulation it remains a law school.
Fee Simple Subject to Condition Subsequent
Characteristics:
Does not terminate automatically upon the occurrence of a specified event.
Grantor must take action to reclaim the property.
Key Language:
Uses conditional phrases: "provided that", "but if", "on the condition that".
Example:
"To B, but if the land is ever used for a casino, O shall have the right of entry."
Right of Entry:
Grantor O has the right to reclaim the property, needing to exercise within a reasonable timeframe (typically around 10 years in some jurisdictions).
Fee Simple Subject to Executory Limitations
Characteristics:
Similar to the previous two types but transfers to a third party rather than reverting to the grantor.
Example:
"To A, but if the land is ever used for a casino, then to B."
Future Interest:
B has an executory interest that can terminate A's estate.
The difference from the previous types is that there is no interest going back to O.
Key Comparisons Between Estate Types
Comparative Summary:
Fee Simple Determinable:
Automatically reverts to the grantor; future interest is possibility of reverter.
Fee Simple Subject to Condition Subsequent:
Requires action to reclaim; future interest is right of entry.
Fee Simple Subject to Executory Limitations:
Transfers directly to third party; future interest is executory interest.
Practical Examples and Practice Questions
Scenario Examples:
"Bill grants Ted land so long as it is used for growing peanuts."
Ted has a fee simple determinable; reverts to Bill if Ted stops.
"Ted to Susan for life until the land is farmed."
This creates a determinable life estate for Susan.
Reverts to Bill if Susan farms it.
Vested and Contingent Remainders
Definitions:
Vested remainders: Remainders that will certainly happen.
Contingent remainders: Depend on an uncertain future event.
Vested Remainders Requirements:
The remainderman must be ascertainable.
No condition precedent can exist.
**Examples:
Vested Remainder Subject to Divestment:**
"To A for life, then to B but if B marries, then to C."
Indefeasibly Vested Remainder:
Simple bested remainder without conditions.
Significance of Future Interests
Why astute understanding of these interests matters:
Courts will lean toward vested remainders in cases of ambiguity.
The rule against perpetuities and the doctrine of Shelley’s case apply only to contingent remainders, thus knowing a remainder as vested helps avoid complications.
Flowchart for Future Interests
Author’s flowchart helps analyze who holds the future interest:
Distinguish between grantor and transferee.
Identify if the possessory estate is in fee simple determinable, subject to conditions subsequent, or executory.
Determine characteristics of future interests based on categories established in previous sections.
Next Class Preview
Cover the rule against perpetuities in the next session.
Emphasize practice problems and review of past material in preparation for midterm exams.
Overview of Future Interests in Estates
Discussion of states of future interest, focusing on feasible estates.
Summary of topics covered in previous week.
Review of Simple Life Estates
Simple life estates have no future interests or restrictions on duration.
Key Characteristics:
Cannot coexist with a future interest.
Automatically reverts to the original grantor or their heirs.
Florida law restricts transfer of interest to lineal descendants only.
Introduction to Defeasible Estates
Definition:
Estates capable of being taken away or defeased.
Origin of term relates to being able to take away fee ownership (similar to fee simple).
Types of Defeasible Estates:
Feasible Determinable
Feasible Subject to Condition Subsequent
Feasible Subject to Executory Limitations
Defeasible estates do not concern waste like life estates do.
Fee Simple Determinable
Characteristics:
Automatically ends upon the occurrence of a specific event.
Created through specific limiting phrases: "so long as", "while", "during".
Example:
"To A so long as the land is used as a farm."
If A fails to use the land as a farm, the estate automatically ends.
Reversion:
Upon termination, reverts to the original grantor O.
Future interest held by O is called a possibility of reverter.
Example Application: County grants land to ASL with stipulation it remains a law school.
Fee Simple Subject to Condition Subsequent
Characteristics:
Does not terminate automatically upon the occurrence of a specified event.
Grantor must take action to reclaim the property.
Key Language:
Uses conditional phrases: "provided that", "but if", "on the condition that".
Example:
"To B, but if the land is ever used for a casino, O shall have the right of entry."
Right of Entry:
Grantor O has the right to reclaim the property, needing to exercise within a reasonable timeframe (typically around 10 years in some jurisdictions).
Fee Simple Subject to Executory Limitations
Characteristics:
Similar to the previous two types but transfers to a third party rather than reverting to the grantor.
Example:
"To A, but if the land is ever used for a casino, then to B."
Future Interest:
B has an executory interest that can terminate A's estate.
The difference from the previous types is that there is no interest going back to O.
Key Comparisons Between Estate Types
Comparative Summary:
Fee Simple Determinable:
Automatically reverts to the grantor; future interest is possibility of reverter.
Fee Simple Subject to Condition Subsequent:
Requires action to reclaim; future interest is right of entry.
Fee Simple Subject to Executory Limitations:
Transfers directly to third party; future interest is executory interest.
Detailed Review of Key Concepts
Fee Simple:
Represents absolute ownership of land, enduring potentially forever.
Defeasible Estates (Estates with Conditions):
Estates that can be terminated or "taken away" upon the occurrence of a specified event or condition.
Fee Simple Determinable:
An estate that automatically ends upon the violation of a stated condition or the occurrence of a specified event.
Typically created using phrases like "so long as," "while," or "during."
Reverter to the original: Upon termination, the property automatically reverts to the original grantor or their heirs.
The future interest held by the grantor is a possibility of reverter.
Fee Simple Subject to Condition Subsequent:
An estate that does not automatically terminate when a condition is violated.
The grantor must take affirmative action (exercise their right of entry) to reclaim the property.
Key phrases include "provided that," "but if," or "on the condition that."
The future interest held by the grantor is a right of entry (or power of termination).
Determinable Life Estate:
A life estate that is subject to a condition, upon the occurrence of which the estate automatically terminates before the life tenant's death.
Example: "To Ted to Susan for life until the land is farmed" means Susan's interest ends automatically if the land is farmed, even if she is still alive.
Future Interests in Transferees:
Remainders:
A future interest created in a transferee that is capable of becoming possessory upon the natural termination of the preceding estate.
Vested Remainder: This remainder is certain to become possessory; it is given to an ascertainable person, and there is no condition precedent other than the natural termination of the previous estate.
Contingent Remainder: This remainder depends on an uncertain future event or an unascertained person coming into being.
Executory Interests:
Future interests created in a transferee that either divest, or cut short, a prior estate (whether held by a transferee or the grantor) or spring out of the grantor's estate.
The trigger event for an executory interest is often a party with a preceding life estate or similar interest doing something they are not supposed to do, leading to divestment.
Shifting Executory Interest: Divests a prior estate held by another transferee (e.g., "To A, but if X happens, then to B").
Springing Executory Interest: Divests the grantor's estate or fills a gap in possession that would otherwise revert to the grantor (e.g., "To B when B marries").
Practical Examples and Practice Questions
Scenario Examples:
"Bill grants Ted land so long as it is used for growing peanuts."
Ted has a fee simple determinable; reverts to Bill if Ted stops.
"Ted to Susan for life until the land is farmed."
This creates a determinable life estate for Susan.
Reverts to Bill if Susan farms it.
Vested and Contingent Remainders
Definitions:
Vested remainders: Remainders that will certainly happen.
Contingent remainders: Depend on an uncertain future event.
Vested Remainders Requirements:
The remainderman must be ascertainable.
No condition precedent can exist.
**Examples:
Vested Remainder Subject to Divestment:**
"To A for life, then to B but if B marries, then to C."
Indefeasibly Vested Remainder:
Simple bested remainder without conditions.
Significance of Future Interests
Why astute understanding of these interests matters:
Courts will lean toward vested remainders in cases of ambiguity.
The rule against perpetuities and the doctrine of Shelley’s case apply only to contingent remainders, thus knowing a remainder as vested helps avoid complications.
Flowchart for Future Interests
Author’s flowchart helps analyze who holds the future interest:
Distinguish between grantor and transferee.
Identify if the possessory estate is in fee simple determinable, subject to conditions subsequent, or executory.
Determine characteristics of future interests based on categories established in previous sections.
Next Class Preview
Cover the rule against perpetuities in the next session.
Emphasize practice problems and review of past material in preparation for midterm exams.