Freehold Estates

Question 1

What estate is:
To A and his heirs.” or
“To A.”?

Answer 1

Fee Simple Absolute

Question 2

What is the transferability and future interest of a fee simple absolute?

Answer 2

Transferability: Devisable, descendible,
alienable
Future Interest: None.

Question 3

What estate is: “To A so long as
…” “To A until ….” “To A while ….” (Language providing that upon the happening of a stated event, the land is to revert to the grantor)”

Answer 3

Fee Simple Determinable

Question 4

What is the transferability and future interest of a Fee Simple Determinable?

Answer 4

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Possibility of
Reverter (held by grantor). (ends automatically on condition)

Question 5

What estate is: “To A. but if X event happens, grantor reserves the right to reenter and retake.?”

Answer 5

Fee simple subject to condition subsequent

Question 6

What is the transferability and future interest of a Fee simple subject to condition subsequent?

Answer 6

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Right of Entry/Power of Termination (held by grantor).
Not automatically ended, but can be ended at the grantor’s option if the condition occurs.

Question 7

What estate is: “To A, but if X event occurs, then to B.”?

Answer 7

Fee simple subject to an executor limitation

Question 8

What is the transferability and future interest of a Fee simple subject to an executor limitation?

Answer 8

Transferability: Alienable, devisable, descendible, subject to condition.
Future interest: Executory Interest (held by third party).
Automatically ended and given to executory interest holder on condition taking place.

Question 9

What estate is: “To A for life.” “To A

for the life of B.”?

Answer 9

Life Estate

Question 10

What is the transferability and future interest of a Life Estate?

Answer 10

Transferability: Alienable, devisable and descendible if pur autre vie and measuring life is still alive.
Future interest: Reversion (if held by grantor); Remainder (if held by third party).

Question 11

What are the 2 most important rules of defeasible fee construction?

Answer 11

1. Words of mere desire, hope, or intention are insufficient to create a defeasable fee.
2. Absolute restraints on alienation are void.

Question 12

Define: Absolute restraints on alienation.

Answer 12

An absolute restraint on alienation is an absolute ban on the power to sell or transfer that is not limited to a reasonable time limited purpose.

Question 13

What happens if there is an absolute restraint on alienation in the conveyance?

Answer 13

that part is deleted.

Question 14

Can a life estate be measured in a term of years?

Answer 14

No.

Question 15

What estate is: “To A for the life of B.”?

Answer 15

The life estate pur autre vie

Question 16

What are the 2 general rules of a life estate?

Answer 16

1. The life tenant is entitled to all ordinary uses and profits form the and.
2. The life tenant must not commit waste.

Question 17

What are the three types of waste?

Answer 17

1. Voluntary or affirmative waste
2. Permissive waste or neglect
3. Ameliorative waste

Question 18

Define: Voluntary or affirmative waste

Answer 18

Overt conduct that decreases value of the land.

Question 19

Rule for voluntary waste and natural resources.

Answer 19

The life tenant must not consume or exploit natural resources on the property (such as timber, oil, or minerals), unless one of four exceptions applies, remembered by PURGE.

Question 20

What dies PURGE mean?

Answer 20

Prior Use-> prior to the grant the land was used to exploit
Repairs-> The life tenant may consume natural resources for repairs and maitnance
Grant-> The life tenant may exploit if granted that right
Exploration-> the land is only suitable to exploit.

Question 21

Define: Permissive waste

Answer 21

Life tenant allows land to fall into disrepair.

Question 22

What are the obligations of life tenant to avoid committing permissive waste?

Answer 22

1. The life tenant must simply maintain the premises in reasonably good repair.
2. The life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits on the land. If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of the premises fair market value.

Question 23

Define: Ameliorative Waste

Answer 23

The life tenant must not engage in acts that will enhance the property’s value, unless all future interest holders are known and consent.

Question 24

What are the future interests capable of creation in the Grantor?

Answer 24

1. The possibility of reverter
2. The right of entry (or power of termination)
3. The reversion

Question 25

What estate does the possibility of reverter accompany?

Answer 25

The fee simple determinable

Question 26

What estate does the right of entry accompany?

Answer 26

The fee simple subject to condition subsequent.

Question 27

What estate does the reversion accompany?

Answer 27

Any time O conveys less than what he owns (e.g., life estate) Potentially a Fee Simple Subject to a Condition Subsequent if the grantor does not expressly reserve the right of reentry

Question 28

Define: reversion

Answer 28

A reversion is the future interest that arises in a grantor who transfers an estate of lesser quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent. Ex: “To A for life.” O has conveyed less than what she started with. She has a reversion.

Question 29

What are the future interests in transferees?

Answer 29

1. Vested remainder 2. Contingent remainder 3. Executory interest

Question 30

Define: remainder

Answer 30

A remainder is a future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created. A remainder is social patient and polite.

Question 31

When is a remainder vested?

Answer 31

A remainder is vested if it is both created in an ascertained person and is not subject to any condition precedent.

Question 32

When is a remainder contingent?

Answer 32

A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent, or both.

Question 33

Is the remainder contingent or vested: “To A for life, then to B’s first child.” A is alive. B, as yet, has no children. Why?

Answer 33

Contingent because it is created in as yet unborn or unascertained persons

Question 34

Define: condition precedent

Answer 34

A condition is a condition precedent when it appears before the language creating the remainder or is woven into the grant to remainderman

Question 35

What interests do B and O have in the following conveyance: “To A for life, then, if B graduates from college, to B.” A is alive. B is now in high school. What happens if B graduates form college during A's lifetime?

Answer 35

B contingent remainder (contingent on graduating college O has the possibility of reversion (If B never graduates then O or O's heirs take) If B graduates form college during A's lifetime B's contingent remainder turns into an Indefeasibly vested remainder.

Question 36

Define the rule of destructibility of contingent remainders

Answer 36

At common law, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended. Today the rule has been abolished, only apply common law when it says to.

Question 37

“To A for life, and, if B has reached the age of 21, to B.” A has died. B is 19 years old. Assess the state of the tittle: At common law? Modern law?

Answer 37

Common law: B has nothing. his contingent remainder was destroyed. O takes in fee simple absolute. Modern Law B would have a springing executory interest. O would hold fee simple subject to B's springing executory interest.

Question 38

Rule in Shelley's case

Answer 38

Present and future interests merge even if contrary to grantor's intent. Today the rule is virtually abolished.

Question 39

O conveys “To A for life, then, on A’s death, to A’s heirs.” A is alive. What is the state of the tittle applying the Rule in Shelly's Case? What is the state of the tittle using modern law?

Answer 39

Historically: A would have a fee simple absolute. Modern: A would have a life estate, A's unknown heirs would have a contingent remainder. O has a possibility of reversion because A could die without heirs.

Question 40

The Doctrine of Worthier Title.

Answer 40

The DOWT applies when O, who is alive, tries to create a future interest in his heirs. If that happens the DOWT would void the future interest in O's heirs and instead create a reversion in O. Intent of O still controls.

Question 41

Define: indefeasibly vested remainder

Answer 41

The holder of this remainder is certain to acquire an estate in the future, with no strings attached.

Question 42

Define: vested remainder subject to complete defeasance/subject to total divestment

Answer 42

A remainder is subject to a condition subsequent. Ex: O conveys "To A for life, then to B and his heirs, but if B dies unmarried, then to C and his heirs" B has vested remainder subject to total divestment by C's shifting executory interest (B could never marry, and upon A's death his interest would not have vested, thus C takes)

Question 43

Define: vested remainder subject to open

Answer 43

A remainder that is vested in a group of takers, at least one of whom is qualified to take, but each class member is subject to a partial diminuation because they are subject to an additional member joining the class.

Question 44

When does a class close?

Answer 44

The class closes whenever any member can demand possession. Called rule of convenience.

Question 45

To A for life, then to B’s children.” A is alive. B has two children, C and D. When does the class close?

Answer 45

When A dies (however a child in the womb will share in the gift)

Question 46

Define executory interest

Answer 46

It is a future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (“shifting”) or in the grantor or his heirs (“springing”).

Question 47

“To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs.” What does B have? What does A have?

Answer 47

B has a springing executory interest. A has a fee simple subject to B's springing executory interest.

Question 48

Define: Shifting executory interest

Answer 48

Always cuts short a defeasible fee and cuts short someone other than O the grantor.

Question 49

O conveys: “To A, if and when he marries.” A is unmarried. | What do A and O have?

Answer 49

A has a springing executory interest. | O has a fee simple subject to A's springing executory interest

Question 50

THE RULE AGAINST PERPETUITIES

Answer 50

Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.

Question 51

What does the RAP apply to?

Answer 51

contingent remainders, executory interests, and certain vested remainders subject to open

Question 52

4 step process for the RAP

Answer 52

1. Identify the future interest. 2. Identify the conditions precedent to the vesting of the suspect future interest. 3. Find a measuring life. Look for a person alive at the date of the conveyance and ask whether that person’s life or death is relevant to the condition’s occurrence. 4. Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take? If so, the conveyance is good. If not (if there is any possibility, however remote, that the condition precedent could or could not occur more than 21 years after the death of a measuring life), the future interest is void.

Question 53

“To A for life, then to the first of her children to reach the age of 30.” A is 70. Her only child, B, is 29 years old. What is the state of tittle?

Answer 53

A has a life estate, O has a reversion.

Question 54

2 bright line rules for the RAP

Answer 54

A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP. “Bad as to one, bad as to all.” To be valid, it must be shown that the condition precedent to every class member’s taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class, 2. Many shifting executory interests violate the RAP. An executory interest with no limit on the time within which it must vest violates the RAP.

Question 55

“To A for life, then to such of A’s children as live to attain the age of 30.” A has two children, B and C. B is 35 and C is 40. A is alive. What is the state of the tittle?

Answer 55

A has a life estate. O has a reversion. After Rap would look like this: “To A for life" A could have a kid that does not vest in 21 years, whats bad for one member of the class is bad for all.

Question 56

“To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs.” What is the state of the tittle?

Answer 56

A has a fee simple determinable. O has a possibility of reverter. After RAP would look like this: "To A and his heirs so long as the land is used for farm purposes"

Question 57

What happens if after the RAP is applied the new conveyance is not grammatically correct?

Answer 57

the whole clause is stricken.

Question 58

“To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs. What is the state of the tittle?

Answer 58

A has a fee simple absolute. O has nothing. New conveyance would look like this: "To A and his heirs" Why? "To A and his heirs, but if the land ceases to be used for farm purposes" .is not grammatically correct thus the non-grammatically correct part of the conveyance is stricken as a whole.

Question 59

Charity to charity exception

Answer 59

A gift from one charity to another does not violate the RAP.

Question 60

“To the American Red Cross, so long as the premises are used for Red Cross purposes, and if they cease to be so used, then to the YMCA.”

Answer 60

ARC has a fee simple subject to YMCA's shifting executory interest. Does not violate the RAP because of the charity to charity exception.

Question 61

What are the 2 methods for Reform of the RAP?

Answer 61

1. The “wait and see” or “second look” doctrine. | 2. USRAP

Question 62

what is the wait and see” or “second look” doctrine?

Answer 62

Under this majority reform effort, the validity of any suspect future interest is determined on the basis of the facts as they now exist, at the end of the measuring life.

Question 63

How does the USRAP work?

Answer 63

Codifies the common law RAP and, in addition, provides for: an alternative 90 year vesting period.

Question 64

What doctrine do both the wait and see and USRAP embrace?

Answer 64

Cy pres doctrine and the reduction of any offensive age contingency to 21 years.

Question 65

Define the Cy Pres Doctrine

Answer 65

If a given disposition violates the rule, a court may reform it in a way that most closely matches grantor's intent while still complying with the RAP.