Future Interests and Estates
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Transferor
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Who holds the Future Interest?
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Transferee
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YES:
Future Interest- Possibility of Reverter
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Is the Possessory Estate a Fee Simple Determinable?
(Ends automatically when a stated event happens)
Ex. long as, while, during, until
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Does the interest come at the natural end of the preceding estate?
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YES: Remainder- a third party retains the future interest
Reversion- Future interest reverts back to Grantor
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YES:
Future Interest- Right of Entry
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NO: Is the Possessory Estate a Fee Simple Subject to Condition Subsequent?
(no automatic end, but may be cut short when an event happens)
Ex. Provided on, on condition, if, but if
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Transferor: Springing Executory Interest- Cuts short the Grantor's interest
Ex. O--> to A, if they finish school by 2015. O has present interest, which can spring to A if A meets condition.
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NO: Executory Interest
Who's interest is cut off?
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Is there an ascertained person & no unmet condition?
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NO: Reversion (Goes back to O)
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Transferee: Shifting Executory Interest- when the estate is cut short it shifts from the original Grantee to a third party
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YES: Vested Remainder (3 kinds)
Can a subsequent condition end up divesting the interest?
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NO: Contingent Remainder- Doesn't go into effect until something must happen
Ex. O--> to A for life then to B's heirs. We won't know B's heirs until B dies.
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YES: Reversion in Fee Simple Subject to Executory Limitation (Goes to a third party, not Grantor)
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May the Interest be cut off?
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YES: Is the subsequent condition only PARTIALLY divesting the interest or leaving it open to a class of persons?
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NO: Indefeasibly Vested Remainder- cannot be taken away by any event that happens later. Once vested, the remainder stays.
Ex. O--> to A for life, then to B
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NO: Reversion in Fee Simple Absolute
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YES: Vested Remainder Subject to Open- can be joined in the future by another remainderman
Ex. to A for life, then to A's kids. A only has one child at the moment, but she could have a second.
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NO: Vested Remainder Subject to Divestment- - can be taken away if some future event happens
Ex. O--> to A for life, then to B, so long as B doesn't divorce
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for amusement purposes only. The implicit and explicit opinions expressed here are the author's. SelectSmart.com does not necessarily agree.
