Estates in Land

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Estates in Land Future Interests

• Unit 2 Key Concepts the FSA
• 2009 edition

2
Future Interests An Overview

• Reversionary Return Land to the Grantor (or her
  heirs)
• Reversion
• Possibility of Reverter
• Right of Entry or Power of Termination
• Non-Reversionary Transfer Land to Someone Other
  than the Grantor
• Remainders (vested contingent)
• Executory Interests (springing shifting)

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Three Key Concepts

• Vestedness
• Defeasibility
• Contingency

4
Vestedness

• Vested interests are those that enjoy
• present possession (vested in possession) OR
• are ready to take effect in possession upon the
  natural expiration of all prior estates created
  in the same instrument (vested in interest).

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Vestedness

• Two step test to identify a vested interest
• 1. Interest is not subject to any condition
  precedent before it becomes possessory AND
• 2. Interest cannot be held by a person who is
  unborn or unascertainable at the time of
  conveyance.
• If not vested, an interest is contingent.

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Vestedness

• Example
• G to A for life, remainder to B and his
  heirs
• A vested in possession
• B vested in interest

7
Vestedness

• Examples of Non-vested interests
• G to A for life remainder to As children
• (Suppose A has no children at time of grant.)
• As children unborn and not ascertainable
• So their interest is contingent

8
Vestedness

• Examples of Non-vested interests
• G to A for life remainder to B if B
  reaches the age of 21.
• Bs interest subject to a condition precedent,
• so her interest is contingent.

9
Defeasibility

• Defeasibility Opposite of vestedness holder
  will
• lose an estate upon happening of an event
• Two devices of defeasance
• 1. Limitations natural termination of an estate
  (estate expires)
• 2. Conditions unnatural termination of an
  estate (estate is divested or cut short)

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Defeasibility

• Limitations two types
• General limitations durational boundaries that
• define each estate smaller than a Fee Simple
• Special limitations durational boundaries
  written
• into a particular grant by a grantor

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Defeasibility

• General Limitation example
• G to A for life
• Special Limitation example
• G to A so long as no liquor is sold on the
  premises, and if liquor is sold on the premises,
  Blackacre is to return to me.

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Defeasibility

• Conditions here mean conditions subsequent
• Operate to divest existing estates or future
  interests
• Example
• G to A for life remainder to B, but if B
  fails to survive A, then to C.
• Bs vested interest is defeated if condition
  subsequent is not
• satisfied.

13
Contingency

• Contingency postponement or possible prevention
• of vestedness.
• If an interest is not vested, it is contingent.
• Test to identify contingent interests is reverse
  of
• test for vested interests.

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Contingency

• Test to identify contingent interests
• 1. Subject to a condition precedent, OR
• 2. Holder is unborn or not yet ascertainable.

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Contingency

• Contingent interest example
• G to A for life remainder to the children
  of B who survive A.
• Contingent for two reasons
• 1. As a condition precedent, Bs children must
  survive A
• 2. As a group, those children who survive A are
• unascertainable as the time of the grant.

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Fee Simple Absolute

• Duration
• Largest estate recognized
• All incidents of ownership
• Potentially infinite duration
• Transferability
• By deed (gift or sale)
• By will (devise)
• By intestacy (descent)

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Fee Simple Absolute

• Magic Language
• Traditional Common Law
• To A and his heirs.
• N.B. To A created only a life estate

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Fee Simple Absolute

• Magic Language
• Current Law
• To A and his heirs.
• To A.
• To A and his assigns forever.

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Fee Simple Absolute

• A Critical HINT
• Identifying (classifying) present and future
• interests will be easier if you carefully
• analyze the CHARACTERISTICS OF EACH
• INTEREST

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Fee Simple Absolute

• CHARACTERISTICS PP/FSA/---/---
• Possessory status
• Estate Family
• Defeasibility (none)
• Mode of Defeasance (none)
• ASSOCIATED FUTURE INTERESTS
• none possible

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• END