LAW SCHOOL - PROPERTY - Spring 2012

• person in whome grantor has confidence
• has power to invest the trust principal and discretion to pay appropriate amount to beneficiaries
• during term of trust, this person holds legal title to trust assets in fee simple subject (FSS) to beneficial interests of beneficiaries (253)

• confer rights to enjoyment of property at a future time
• best way to implement is through a trust

by creating future interest (not only at own death, but others' death)

• reversion
• possibility of reverter
• right of entry (also known as power of termination)

• vested remained (VR)
• contingent remained (CR)
• executory interest (EI)

entitle owner to present possession

• interest left in an owner when he carves out of his estate a lesser estate and doesn't provide who is to take the property when the lesser estate expires
• in the words of Professor Lewis Simes: "interest remaining in the grantor or in the successor in interest of a testator, who transfers vested estate of a lesser quantum than that of the vested estate which he has"
• remnant of an estate that has not entirely passed aware from transferor

leasehold estate < life estate < fee tail < fee simple

(so in order from greatest to least: fee simple > fee tail > life estate > leasehold estate)

TRUE

• arises when an owner carves out of his estate a determinable estate of the same quantum
• theoretically, it can be retained when a life tenant conveys his life estate to another, determinable on the happening of an event, but the cases, almost without exception, deal with carving a fee simple determinable (FSD) out of a fee simple absolute (FSA)
• future interest remaining in the transferor or his heirs when a fee simple determinable (FSD) is created

when an owner transfers an estate subject to condition subsequent and retains power to cut short or terminate the estate

NO

NO

transferor decides at outset who takes property when life tenant dies

permits the transferor to let future events determine this question (who takes property upon the life tenant's death?)

• future interest that waits politely until the termination of the preceding possessory estate, at which time the remainder moves into possession if it is then vested
• future interest that is capable of becoming possessory at the termination of the prior estate

to do what a remainder cannot do: divest or cut short the preceding interest

future interest in a transferee that can take effect only by divesting another interest

• remainder takes interest at end of other's estate
• executory interest divests the prior estate (cuts short)

• (1) it is given to an ascertained person
• (2) it is not subject to a condition precedent (other than the natural termination of the preceding estates)

OR (in other words) if it is created in an ascertained person and is ready to become possesssory whenever and however all preceding estates expire

• (1) it is given to an unascertained person or
• (2) itis made contingent upon some event occuring other than the natural termination of the preceding states

• given to unascertained person
• made contingent upon some event occurring other than natural termination of preceding estates
• subject to condition precedent

• remainder certain of becoming possessory in the future
• CANNOT be divested

the kind of future interest

the kind of estate held as a remainder (and what kind of possessory estate the remainder will become when it becomes possessory)

later-born children are entitled to share in the gift

FALSE - we don't know who someone's heirs are until they die

TRUE

• remainders
• executory interests
• reversions
• possibilities are reverter
• rights of entry

All referred to as "future interests" by 3rd Restatement

"if, for any reason, it might not take effect in possession or enjoyment" (p. 272)

contingent

vested

divested executory interest

contingent remainder (also)

- vested remainder accelerates into possession whenever and however the preceding estate ends.....

• - property that cannot be moved
• - land, items attached to land, items associated with land

• - movable
• - usually consists of personal possessions and items that are not real property

• capture
• creation
• conversion
• discovery
• adverse possession
• accession
• confusion
• gift

• abandonment
• fraud
• or one of the methods acquiring ownership
• lost by an owner who loses or misplaces it

the person who discovers real or personal property has the best title to property

allows ownership to be granted to a person who exercises exclusive physical possession of a piece of property for a certain amount of tiem

• (CHOA)
• continuous
• open and notorious
• actual
• hostile

• uninterrupted for a period of time as defined by statute (20 years at common law)
• seasonal or infrequent use may be sufficient if it is consistent with the type of property that is being possessed (e.g., summer home)

• an adverse possessor may tack on his predecessor's time in order to satisfy a statutory period, as long as there is privity
• not allowed when there is actual, wrongful exclusion of a party entitled to possession from the property (ouster)

• the statute of limitations will not run against a true owner who is afflicted with a disability at the inception of the adverse possession
• insanity
• infancy
• imprisonment

• without the owner's permission
• with the intent to claim the land as his own against the claims of others
• MAJORITY - grant title to possessor who in good faith thought he had a right to possess (believed he owned the property or that it was unowned)
• MINORITY - require the possessor to know that the land belongs to another

• most common form of property ownership
• potentially infinite duration
• freely alienable (easily bought or sold)
• no accompanying future interest
• present estate that does not terminate unless the owner dies intestate without heirs - then it would escheat to the state

• like FSA, ownership is potentially infinite, BUT unlike FSA, it may be terminated by the occurence of an event
• types include: FSD, FSSCS, FSSEL

• present fee simple estate that is limited by specific durational language (so long as, while, during, until)
• terminates automatically upon the happening of a stated condition
• freely alienable, devisable, and descendible, but always subject to stated conidition

• upon the occurrence of the stated condition, the estate automatically reverts back to the grantor
• ex: A conveys Blackacre "to B and his heirs, until B gets married"

• present fee simple that is limited in duration by specific conditional language (provided that, on condition that, but if....)
• unlike a FSD, termination is not automatic
• will terminate only if the grantor affirmatively demonstrates intant to terminate
• ex: A conveys Blackacre "to B and his heirs, but if B gets married, then A can reenter Blackacre"

• present fee simple estate that is limited in duration by either conditional language, such that it will terminate upon the occurrence of the specified condition and title will pass to a third party (someone other than the third party)
• upon occurrence of stated conidition, the present Fee Simple terminates automatically
• future interest held by the third part is an executory interest
• ex: A conveys Blackacre "to B for as long as the property is used as a hospital, then to C"

• freehold estate that limits the estate to the grantee's lineal blood descendants by specific words of limitation ("heirs of the body")
• has been eliminated in most states because it is treated as a FSA

• present possessory estate that is limited in duration by a life
• language must be clear, and the duration must be measured in terms of a life, not a number of years ("to A for life")
• upon the end of the measuring life, title reverts to the grantor or specified remainderman
• Ex: A conveys Blackacre "to B for the life of B"
• Ex: A conveys Blackacre "to B for B's life and then to C" (C has a remainder)
• not subject to RAP

• future interest held by the grantor who grants a life estate or estate for years but does not convey the remaining future interest to a third party
• not subject to the RAP

automatically retained by a grantor when a FSD is conveyed

• AKA power of termination, right of entry
• future interest held by the grantor after a FS on condition subsequent is granted

• future interest created in a grantee that can become possessory upon the expiration of a prior possessory estate of known fixed duration that is created in the same conveyance
• can either be vested or contingent
• MAJORITY - contingency applies at the termination of the interest that precedes distribution of the remainder
• MINORITY - interprets a survivorship contingency to require surviving only the testator and not the life tenant

• interest that is not subject to any conditions precedent and is created in an ascertainable grantee
• Ex: A conveys Blackacre "to B for life, and then to C and his heirs"
• C, the grantee, is ascertaingable

• if a conveyance grants a remainder to a class of grantees and at least one of the grantees receives a vested remainder at the time of the conveyance, that vested remainder is subject to open (property interest becomes uncertain bc other grantees become vested and able to share in the frant)
• Ex: A conveys "to B for life, and then to B's children as they turn 18"

• vested remainder subject to complete divestment indicates that the occurence of a condition subsequent will completely divest the remainder interest
• Ex: A conveys "to B for life, and then to C; but if C has no children, then to D's children"

• created in a grantee that is unascertainable, or if it is subject to an express condition precedent to a grantee's taking
• normally occurs when (1) the property cannot vest bc the beneficiary is unknown or (2) the property cannot vest bc the known benefiticary is subject to a a condition precedent that has not yet occurred
• Ex: A conveys "to B for life, remainder to C's heirs" - if C is alive, the heirs are not ascerntainable and the remainder is contingent
• were destroyed at common loaw if they had not vested by the time the preceding estate terminated

• future interest in a third party that is not a remainder and that cuts the prior estate short upon the occurrence of a specified condition
• transferrable and subject to RAP
• 2 TYPES: springing and shifting

• divests the interest of the grantee by cutting short a prior estate created in the same conveyance
• the estate "shifts" from one grantee to another on the happening of the condition
• Ex: A conveys "to B and his heirs, but if C returns from Paris, then to C" (FSSEL in B, shifting executory interest in C)

• divests the interest of the grantor or fills a gap in possession in which the estate reverts to grantor
• Ex: A conveys "to B for life, and one year after B's death to C and his heirs" (life estate in B, one year reversion in A in FSSEL, and a springing executory interest in C)

specific future interests are valid only if they must vest or fail by the end of a life in being, plus 21 years

• class transfers - if the class is open
• fertile octogenarian - anyone is deemed capable of having children, but some states have a set a limit (55 years old)
• unborn spouse - if an interest following a widow's life estate cannot vest until the widow dies, it violates the rule
• when estate is conveyed to someone unknown
• defeasible fee followed by an executory interest
• conditional passage of interest

• AKA co-tenancy
• ownership or possession of real property by two or more persons simultaneously
• most common - tenancy in common, joint tenancy, and tenancy by the entirety

• any tenancy with 2 or more grantees
• "default" or "catch all" co-tenancy when joint tenancy and tenancy by the entirety do not exist
• each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the interest

• when 2 or more indivs own property with the right of survivorship (i.e., upon the death of a joint tenant, the interest terminates and automatically goes to the surviving joint tenants)
• look for survivorship language

• PITT
• possession - equal right to use or possess the property
• interest - each interest equal to the others
• time - at the same time
• title - with the same instrument

although an interest in tenancy cannot be devised, joint tenants convey all or part of their individual interests during their lifetimes (inter vivos) to a third party, thereby severingthe joint tenancy

destroyed and converted to a tenancy in common

• joint tenancy btn married persons with a rights of survivorship
• same rules as joint tenacy apply
• must be married when the deed is executed or the conveyance occurs
• neither party can alienante or encumber the property without the consent of the other

when a co-tenant refuses to allow another co-tenant access to the property