estates & future interests the shadow of the past:
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PRESENT POSSESSORY ESTATES
• Present v. Future
• Possessory v. Non-Possessory:
(Tenant v. Trust Beneficiary)
• Right to possess and use forever
• Right to transfer all present and future rights (inheritable/devisable)
FEE SIMPLE ABSOLUTE
• Right to possess and use forever
• Right to transfer all present and future rights (inheritable/devisable)
• Right to liquidate assets
FEE SIMPLE ABSOLUTE
• Right to possess and use forever• Right to transfer all present and future rights
(inheritable/devisable)• Right to liquidate assets
• Default estate today
FEE SIMPLE ABSOLUTE
FEE SIMPLE ABSOLUTE
Lloyd grants Redacre “to Mimi and her heirs.”
“WORDS OF PURCHASE”:
Who Gets the Estate?
FEE SIMPLE ABSOLUTE
Lloyd grants Redacre “to Mimi and her heirs.”
WORDS OF PURCHASE: WHO GETS THE ESTATE?
“WORDS OF LIMITATION”:
What Estate do they Get?
RELEVANT TIME FRAMES
• “At Common Law”: Dates prior to modern streamlining of the rules. (e.g., 1600-1800)
RELEVANT TIME FRAMES
• “At Common Law”: Dates prior to modern streamlining of the rules. (e.g., 1600-1800)
• “Today”: Dates after modern streamlining of the rules.
(e.g., 1950-present)
RELEVANT TIME FRAMES
• “At Common Law”: Dates prior to modern streamlining of the rules. (e.g., 1600-1800)
• “Today”: Dates after modern streamlining of the rules. (e.g., 1950-present)
• Precise line between varies from state to state and from issue to issue, so you don’t need to know where it is.
TERM OF YEARS
• Finite period specified
• Can alienate, devise, inherit (until term ends)
• Need explicit time language to create: (“for 99 years”)
ISSUE v. HEIRS
• Issue = Direct Descendants
• Heirs = People who inherit your property at the time of your death under the relevant Intestacy Statute
ISSUE v. HEIRS
• Issue = Direct Descendants
• Heirs = People who inherit your property at the time of your death under the relevant Intestacy Statute
• You cannot have heirs until the moment of death
FINITE ESTATES
TERM OF YEARS: TO ANN FOR 10 YEARS
LIFE ESTATE: TO BEA FOR LIFE
FEE TAIL: TO CAL & THE HEIRS OF HIS BODY
FUTURE INTERESTS THAT FOLLOW
FINITE ESTATES
REVERSIONREVERSION
Future interest retained by grantor when s/he conveys a finite estate without indicating who will have rights when it expires.
FUTURE INTERESTS THAT FOLLOW FINITE ESTATES
REVERSIONREVERSION
Future interest retained by grantor when s/he conveys a finite estate without indicating who will have rights when it expires. E.g.:
Ceci conveys Greenacre “To Didi for life.”
Ceci retains a reversion.
FUTURE INTERESTS THAT FOLLOW FINITE ESTATES
REMAINDERREMAINDER
Future interest in a third party that follows naturally upon the termination of a finite estate. It is always expressly conveyed by the grantor.
FUTURE INTERESTS THAT FOLLOW FINITE ESTATES
REMAINDERREMAINDER
Future interest in a third party that follows naturally upon the termination of a finite estate. It is always expressly conveyed by the grantor. E.g.:
Fifi grants Tanacre:
“To Gigi for life, then to J.J.”
J.J. has a remainder. Fifi retains nothing.
• Right to possess and use forever
• Right to transfer all present and future rights (inheritable/devisable)
• Right to liquidate assets
• Default estate today
FEE SIMPLE ABSOLUTE
• Right to possess and use only for lifetime of original grantee
• Right to transfer only rights for lifetime of original grantee (not inheritable/ devisable)
LIFE ESTATE
What if a living person transfers a life estate?
• Opal conveys Gemacre “to Ruby for life”, retaining a reversion herself.
• Ruby then conveys her life estate “to Esmeralda.”
• What does Esmeralda have?
What if a living person transfers a life estate?
• Opal conveys Gemacre “to Ruby for life”, retaining a reversion herself.
• Ruby then conveys her life estate “to Esmeralda.”
• Esmeralda has a life estate pur autre vie (for the life of another). The duration of the interest is still measured by Ruby’s life.
• Right to possess and use only for lifetime of original grantee
• Right to transfer only rights for lifetime of original grantee (not inheritable/devisable)
• Right only to present income; can’t liquidate capital (Doctrine of Waste)
LIFE ESTATE
• Right to possess and use only for lifetime of original grantee
• Right to transfer only rights for lifetime of original grantee (not inheritable/devisable)
• Right only to present income; can’t liquidate capital• Default Estate at Common Law
LIFE ESTATE
DEFAULT ESTATE (“To Bill.”)
• Common Law: Default was Life EstateBill gets Life EstateGrantor keeps Reversion
DEFAULT ESTATE (“To Bill.”)
• Common Law: Default was Life Estate– Bill gets Life Estate– Grantor keeps Reversion
• Today: Default is Fee Simple– Bill gets Fee Simple Absolute– Grantor keeps nothing
DEFEASIBLE FEESRestatement Terms
•FEE SIMPLE DETERMINABLE
•FEE SIMPLE ON CONDITION SUBSEQUENT
•FEE SIMPLE ON EXECUTORY LIMITATION
FEE SIMPLE DETERMINABLE
• OPERATION: Self-Executing
• KEY LANGUAGE: “So long as”, “While”, “Until”
• FUTURE INTEREST: Possibility of Reverter (in GRANTOR)
FEE SIMPLE DETERMINABLE
• OPERATION: Self-Executing
• KEY LANGUAGE: “So long as”, “While”, “Until”
• FUTURE INTEREST: Possibility of Reverter
• EXAMPLE: To Estelle and her heirs so long as asparagus is not grown on the property.
FEE SIMPLE ON CONDITION SUBSEQUENT
• OPERATION: Grantor must act
• KEY LANGUAGE: – “But if”, “provided that if”, “on condition that
if” PLUS– “O may [re]enter and [re]claim the land”
FEE SIMPLE ON CONDITION SUBSEQUENT
• OPERATION: Grantor must act
• KEY LANGUAGE: – “But if”, “provided that if”, “on condition that if”
PLUS– “O may [re]enter and [re]claim the land”
• FUTURE INTEREST: Right of [Re]Entry (in GRANTOR)
FEE SIMPLE ON CONDITION SUBSEQUENT
• OPERATION: Grantor must act
• KEY LANGUAGE: – “But if”, “provided that if”, “on condition that if” PLUS– “O may [re]enter and [re]claim the land”
• FUTURE INTEREST: Right of [Re]Entry
• EXAMPLE: To Estelle and her heirs, but if asparagus is grown on the property, I can reenter and claim the land
FEE SIMPLE ON EXECUTORY LIMITATION
• OPERATION: Either self-executing or grantee has to act.
• KEY LANGUAGE: Creates interest in 2d grantee if condition violated
FEE SIMPLE ON EXECUTORY LIMITATION
• OPERATION: Either self-executing or grantee has to act.
• KEY LANGUAGE: Creates interest in 2d grantee if condition violated
• FUTURE INTEREST: Executory Interest (in 2d grantee)
FEE SIMPLE ON EXECUTORY LIMITATION:
EXAMPLES
• To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob
FEE SIMPLE ON EXECUTORY LIMITATION:
EXAMPLES
• To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob
• To Estelle and her heirs, but if asparagus is grown on the property, Bob can reenter and claim the land
DEFEASIBLE FEESRestatement Terms
•FEE SIMPLE DETERMINABLE (to grantor; automatic)
•F.S. ON CONDITION SUBSEQUENT (to grantor; must act)
•F.S. ON EXECUTORY LIMITATION (any to grantee)
FUTURE INTERESTS THAT FOLLOW FINITE ESTATES
REMAINDERREMAINDER
Future interest in a third party that follows naturally upon the termination of a finite estate. It is always expressly conveyed by the grantor.
VESTED REMAINDER
• Grantee is living ascertainable person
(Presumed if granted to a named individual)
VESTED REMAINDER
• Grantee is living ascertainable person AND
• Clause creating the remainder contains no condition on grantee taking the property except expiration of prior estate
VESTED REMAINDER
• Grantee is living ascertainable person AND
• Clause creating the remainder contains no condition on grantee taking the property except expiration of prior estate
• Example: To Aaron for life, then to Oona and her heirs.
CONTINGENT REMAINDER
• Grantee is presently unborn or unascertainable
*OR*
• Clause creating the remainder contains a condition on grantee taking the property
CONTINGENT REMAINDER:EXAMPLES
• “To Fred for life, then to Fred’s firstborn child.” Fred presently has no children. (Not born)
CONTINGENT REMAINDER:EXAMPLES
• “To Fred for life, then to Fred’s firstborn child.” Fred presently has no children.
• “To Fred for life, then to Fred’s oldest child living at Fred’s death.”
(not ascertainable)
CONTINGENT REMAINDER:EXAMPLES
• “To Fred for life, then to Fred’s firstborn child.” Fred presently has no children.
• “To Fred for life, then to Fred’s oldest child living at Fred’s death.”
• “To Fred for life, then to Wilma and her heirs if Dino survives Fred. (condition precedent)
Life Estate + Contingent Remainder
Barney “to Fred for Life, then to Wilma and her heirs if Dino survives Fred.”
Life Estate + Contingent Remainder
Barney “to Fred for Life then to Wilma and her heirs if Dino survives Fred.”
Barney retains a reversion.