Estates in Land

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Estates in Land Future Interests

• Unit 9 Contingent Remainders
• 2009 edition

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Contingent Remainders

• Example
• To A for life, and if B attains age 25,
• remainder to B.

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Contingent Remainders

• To A for life, and if B attains age 25,
• remainder to B.
• Characteristics
• Holder may be unborn or unascertainable.
• OR
• Subject to a condition precedent.

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Contingent Remainders

• To A for life, and if B attains age 25,
• remainder to B.
• Characteristics
• Uncertain to Vest in Possession
• Possession not certain to occur upon the
• natural expiration of prior estates.

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Contingent Remainders

• Characteristics
• Disfavored at Common Law (why? - limited
• alienability of land)
• a. limited as to transferability
• b. destructible.

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Contingent Remainders

• Characteristics Limited transferability
• Early common law
• transferable by death transfer
• but not alienable by intervivos conveyance
• Current law Browder on the whole, C-Rem are
• alienable in all but a few states

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Contingent Remainders

• Characteristics Destructible at common law.
• If condition precedent creating contingency was
• not resolved when prior estate expired, then
• contingent remainder was destroyed vesting
• possession in the holder of the next future
• interest.

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Contingent Remainders

• Destructibility Illustrated
• To A for life, and if B attains age 25,
• remainder to B.
• Later A dies when B is age 23.
• Contingency attached to Bs interest has not
  resolved.
• Bs contingent remainder is destroyed.
• Property moves on to next taker in line (here
  G).

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Contingent Remainders

• Destructibility One Loophole
• 1. No destruction if C-rem is an interest held
  in trust.
• To T(rustee) in trust, to pay the income to
  A for life, then if B attains age 25, convey
  Blackacre to B.
• Legal owner Trustee not B so Bs interest is
• not subject to destructability doctrine.

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Contingent Remainders

• A second scenario destruction by merger.
• Contingent remainders may also be destroyed
• by merger if the same person acquires a
• vested present interest and a vested future
• interest with the contingent remainder caught
• in between.

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Contingent Remainders

• Destructibility by Merger Illustrated
• To A for life, then if B attains age 25,
  remainder to
• B.
• A LE B C-Rem-FSA G Rev-FSA
• Later G transfers her Rev-FSA to A.
• A vested LE B C-Rem A vested Rev FSA
• As interests merge.
• Bs contingent remainder is destroyed.

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Contingent Remainders

• Destructibility by Merger One Exception
• 1. No merger if all interests were
  simultaneously created in the same grant
• Merger does not occur if when the critical
• sequence
• vested present interestC-remaindervested
  interest
• is created simultaneously in the same
• instrument.

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Contingent Remainders

• Destructibility by Merger the
• Shelter Scenario
• Merger may not occur if C-Rem is
• protected (sheltered) by an intervening
• vested interest.

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Contingent Remainders

• Example G conveys Blackacre To A for life, then
• to B for life, then to C if C attains age 25.
• A LE B V-Rem LE C C-Rem FSA G Rev FSA
  
• Later G sells his reversion to A.
• A LE B V-Rem LE C C-Rem FSA A Rev FSA
• No merger - Bs vested interest shelters the
• C-Rem held by C.

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Contingent Remainders

• Destructibility Doctrine Current Status
• Abolished by statute or by judicial decision
• in in about half of the states.
• An unintended consequence contingent
• remainders became subject to the Rule
• Against Perpetuities (RAP)
• more on this later.

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End