future interests exist now. they are invested in a grantee and have a remainder vested in another party.
defeasible fees and interests that follow them.
future interests as reversion (usually is default, if vested interest doesn't equal 100% of grantor's interest)
vested remainder: a remainder can be vested and yet subject to change.
three types:
- indefeasibly vested (cannot be destroyed or changed) - is certain to become possessory; no future event can dilute it
- a remainder that is vested subject to open (subject to partial divestment) is a remainder given to a class which may be enlarged by future events, diluting the share of remaindermen in exsistence at the time of the grant
example: to A for life, then to A's children and their heirs, when A already has one child and si
still alive
- remainder vested subject to complete divestment (subject to complete defeasance in NYS) is created in an ascertained person and is not contingent on any furture event in order to become possessory, however some other future event could cut off the remaindermen's right to possession.
comparing contingent remainders with vested remainders subject to complete divestment:
- whether a remainder is contingent...
if we're trying to distinguish, we must look at the language of the grant (see casebook notes). this is all dependent on the placement of the language.
rules of thumb:
- if the conditional language is part of the clause describing the remainder, the remainder is contingent (NYS: subject to condition precedent)
example: to A for life, then to B and her heirs if B survives A, otherwise to C and his heirs.
- if the conditional language follows the desription of the remainder as a separate clause, the remainder is vested subject to complete divestment (in NYS: vested subject to complete defeasance).
why does any of this matter? rule against perpetuties (which we won't study here)
problems.
p.230, p.1: O conveys to A for life, and in the event of A's death to B and her heirs.
1. chronology
2. language
3. vested or contingent
to A for life = life estate
in the event of A's death to B and her heirs = remainder in FSA (the magic words are "to her heirs")
nb FSA tells us what type of estate will be taken by the grantee
is the remainder vested or contingent? VESTED
is the remainder given to an ascertained person? YES
is the remainder based on a conditional? NO
what does "in the event of A's death" mean, how should it be interpreted? it just means the end of the preceding life estate, it's not conditional --->> suplusage language (when interpreting the clause, pretend the language isn't even there)
is there a reversion?
what was the grantor's interest? FSA
nb - FSA can have future interests that are not guaranteed to occur. if those conditions on which a grantee's FSA hinged never occured, then there would be no transfer and the interest would revert. therefore, the grantor must convey a *vested* estate equivalent to his own.
has the grantor conveyed a vested estate equivalent to his own?
B then coveys her interest back to O.
what's the effect on A's interest? none - A still has a life estate.
what's the further effect? B's interest passes to O: O has a vested remainder in FSA
p.230, problem 2, I.
O conveys to A for life, then to B for life, then to C and her heirs.
estate and interest are different.
A has a life estate.
B has a remiander for life (life estate in remainder)
is the remainder vested or contingent?
is the remainder given to an ascertained person?
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate? NO, there is nothing required for B to take
therefore, B's interest is vested
C has a remainder in FSA
is the remainder vested or contingent?
is the remainder given to an ascertained person?
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate? NO, there is nothing required for C to take
is there a reversion?
what was the grantor's interest?
has the grantor conveyed a vested estate equivalent to his own?
therefore, no reversion!
does the fact that B could die before A effect our analysis? NO, because the mechanics of the interests:
- there is a vested remainder for life that is certain that the interest exists.
- when B's interest in the future interest is extinguished, it just simply terminates before becoming possessory. but it doesn't change the actual interest.
problem 2, part II:
O conveys to A for life, then to B for life, then to C and her heirs if C survives A and B.
A has a life estate
B has a vested remainder for life/vested life estate in remainder
C has a remainder in FSA
is the remainder vested or contingent?
is the remainder given to an ascertained person?
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: in order to take, C must survive both A and B. therefore a contingent remainder in FSA
is there a reversion?
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? NO - A and B's estates are a life estate (FSA>> life estate>> lease), and C has a contingent remainder in FSA. therefore O must have a reversion
is the reversion certain to become possessory? NO - C could outlive A and B
problem 3:
O conveys to A and B for their joint lives, then to the survivor in fee simple.A and B have a joint life estate. when will this estate end?
"joint lives" means "while both are alive" -- the life estate ends upon the death of either A or B, whoever dies first.
the survivor [as between A and B] has a remainder in FSA.
is the remainder vested or contingent?
is the remainder given to an ascertained person? do we know who will survive? NO - because we
do not know whether A will survive B or vice versa
is the remainder subject to any condition that might cause it not to become possessory upon
termination of the preceding estate? YES -- if we think of A and B as possible remaindermen,
each one's right to possession is conditioned on hi surviving the other.
is there a reversion?
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? NO - the last vested estate is a life estate; the life tenants each have a remainder in FSA but the vested estate is not equivalent to the grantor (and that makes sense because A and B may die simultaneously) therefore O has a reversion in FSA.
is the reversion certain to become possessory? NO - in fact, it's almost certain to *not* become
possessory. therefore this is a reversion in FSA subject to complete defeasance
p. 230, problem 4:
A's oldest child, B, is 17. O conveys to A for life, then to A's children who shall reach 21.
O conveys to A for life = life estate
then to A's children = FSA remainder
is the remainder vested or contingent?
is the remainder given to an ascertained person? YES, at least B
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: in order to take, A's children must have reached 21. we don't know if any of A's children will take.
THEREFORE, THE REMAINDER IS CONTINGENT IN FSA
B subsequently reaches 21.
A's life estate doesn't change.
is the remainder vested or contingent?
is the remainder given to an ascertained person? YES, at least B
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: in order to take, A's children must have reached 21. we don't know if any of A's children will take.
THEREFORE, B's INTEREST IS NOW A VESTED REMAINDER IN FSA.
B's interest in FSA is now vested, but it still just a remainder interest.
There are three different types of vested remainders - indefeasibly vested, vested subject to open, or vested subject to complete defeasance: which is B's?
indefeasibly vested: NO - A may have other children, and when they reach 21, B's interest could be partially diluted
vested subject to open: YES - B's interest as a remainderman can be diluted by future expansion of the class of remaindermen (because A could have more children)
vested subject to complete defeasance: NO - the remainder is now vested and there is no conditional language to suggest that a conditional future event could take the right away
executory interests:
- an executory interest is any interest in a transferee that cna divest or cut short a prior vested estate. it is uusally created by a conditional language following anothe grant.
examples.
- O conveys to A and her heirs, but if A dies without issue, then to B
- A has a fee simple subject to executory limitation
- B has a shifting executory interest
- O conveys to A when A graduates from law school.
- O has a fee simple subject to executory limitation
- A has a springing executory interest
- O convesy s to A for life, then to B, but if B marries C, then to D
- A has a life estate
- B has a vested remainder in fee simple subject to executory limitation
- D has a shifting executory interest
an executory interest can also follow a defeasible fee. compare with the possibility of reverter:
- O conveys to A for so long as A uses the premises for school purposes, then to B
why an executory interest instead of a remainder?
why a shifting executory interest instead of a springing executory interest?
NYS distinctions:
- in NYS there is no such thing as an executory interest; all future interests in transferees are remainders, and they may cut short prior estates.
examples:
- in NYS, O conveys to A and her heirs, but if A dies without issue, then to B
- A has a fee simple subject to complete defeasance
- B has a contingent remainder in FSA
all future interests are alienable, can be passed inter vivos, ...
p. 238, problem 1(a):
"O conveys to A for life, then to A's children and their heirs, but if at A's death he is not survived by any children, then to B and her heirs." A is alive and has no children.
- A has a life estate
- A's children have a remainder in FSA
is the remainder vested or contingent?
is the remainder given to an ascertained person? NO - at the time of the grant, A has no children.
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: in order for the remaindermen to take, they must exist!
THEREFORE, A'S CHILDREN HAVE A CONTINGENT REMAINDER IN FSA
is B's future interest a remainder or an executory interest?
- must B's interest divest or cut short a vested estate in order to become possessory? B would not cut short A's interest. B's interest cannot cut short A's children's vested interested because their potential interest is currently a contingent remainder. B does not divest or cut short anyone else's interests
THEREFORE B'S INTEREST IS A REMAINDER IN FSA
is the remainder vested or contingent?
is the remainder given to an ascertained person? YES - B
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: A may have children which survive him, and therefore B will not take.
THEREFORE B'S INTEREST IS A CONTINGENT REMAINDER IN FSA
is there a reversion?
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? NO - because A's children and B's interests are contingent remainders
is the reversion certain to become possessory? NO - A could die and be survived by heirs. B has a remainder in FSA, and if B becomes possessory, then O won't take.
problem: A subsequently gives birth to twins C&D.
there is no change to A's life estate.
C&D have a vested remainder in FSA
- is the remainder indefeasibly vested, vested subject to open, or vested suvject to complete divestment?
- could the remaindermen's interest be completely cut off by future events?
- what is B's interest? B's interest is no longer a remainder, it is now a springing executory interest.
B's future interest is executory, and because it must divest someone other than the original grantor, it is a shifting executory interest -->>> just because something was *once* a remainder doesn't mean that it will *always* be a remainder
is there are reversion? the reversion to O is gone.
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? YES - because A's children have a vested interest and B has an executory interest
is the reversion certain to become possessory? NO - A could die and be survived by heirs C and/or D. B has an executory interest, and if B becomes possessory, then O won't take.
problem: C dies.
A's life estate does not change.
C's interest passes to his estate.
C's estate and D have a vested remainder in FSA subject to open and to complete divestment.
B has a shifting executory interest in FSA.
problem: A dies.
A's interest is gone. Now the class of remaindermen is closed, and so the vested remainder is no longer open an dis no longer subject to complete divestment.
C's estate and D are possessory of the interest. They now have an FSA.
B's executory interest fails and disappears.
p. 238, problem 1(b):
"O conveys to A for life, then to such of A's children as survive him, but if none of A's children survive him, to B and her heirs." A is alive and has two children, C and D.
A has a life estate
C*D have a contingent remainder in FSA
B has a future interest in FSA
- is B's future interest a remainder or executory interest?
- must B's interest divest or cut short
THEREFORE B HAS A REMAINDER IN FSA
is the remainder vested or contingent?
is the remainder given to an ascertained person? YES - B
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?YES: C and D may survive B, and therefore B will not take.
THEREFORE B'S INTEREST IS A CONTINGENT REMAINDER IN FSA
is there a reversion? (if no equal vestment, then there *must* be a remainder)
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? NO - because A's children and B's interests are contingent remainders. THEREFORE THERE MUST BE REMAINDER
is the reversion certain to become possessory? NO - A could die and be survived by heirs. B has a remainder in FSA, and if B becomes possessory, then O won't take.
p. 238, problem 1(c):
O conveys to A for life, then to B and her heirs, but if A is survived at his death by any children, then to such suriviving children and their heirs. A is alive and has two children, C and D.
A has a life estate.
B has a remainder in FSA.
is the remainder vested or contingent?
is the remainder given to an ascertained person? YES - B
is the remainder subject to any condition that might cause it not to become possessory upon termination of the preceding estate?NO: C and D may survive B, and therefore B will not take.
THEREFORE B'S INTEREST IS A VESTED REMAINDER IN FSA
- is the remainder indefeasibly vested, vested subject to open, or vested suvject to complete divestment?
- could the remaindermen's interest be completely cut off by future events? YES, if A's survived at death by children
- what is B's interest? B's interest is a vested remainder in FSA subject to complete divestment/complete defeasance
C and D have a future interest
- is C and D's future interest a remainder or an executory interest?
- is the remainder indefeasibly vested, vested subject to open, or vested suvject to complete divestment?
- could the remaindermen's interest be completely cut off by future events?
- what are C and D's interest? springing executory interest.
is there a reversion? (if no equal vestment, then there *must* be a remainder)
what was the grantor's interest? FSA
has the grantor conveyed an estate equivalent to his own? YES - because B has a vested remainder and C and D have an executory interest
is the reversion certain to become possessory? NO - A could die and be survived by heirs. B has a remainder in FSA, and if B becomes possessory, then O won't take.
THEREFORE NO REVERSION TO O
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