How to Analyze Present Estates and Future Interests on Real Property Questions [PART 1/3]

in this lesson we're beginning our discussion of ownership of real property specifically we want to focus on present estates and future interests so the way that this is typically going to present itself on a real property fact pattern is going to be through the conveyance of real property from one party they transfer or to at least one transferee potentially more right so and so we all know what this looks like right if you've ever seen president of states and future interests what is the fact pattern typically sound like well you're going to have a transfer roar of real property let's say that the transfer roar here is me Michael so I am Emma and I am transferring real property to AMI right so let's say that I convey Greenacre the name of the property right let's say that this property is called Green acre which is what is classically used in these fact patterns right so I'm conveying Green acre to AMI right and let's say that in the language of my conveyance I convey Green acre to ami for her life then to Bobbi's right this would be a very classic real property present States and future interest backed items I convey Green acre to ami for the rest of Amy's life then to Bobbi ray and your call the question is going to ask either what is Amy's interest in green acre or what is Bobby's interest in Green acre and it will be your job to use what we're gonna talk about today to use this big decision tree on the board to identify the correct name of both Amy's interest in green acre and Bobby's interest in green acre or whatever the call of the questions asking if the call the question asks what is Amy's interest in green acre you'll work through the decision tree and you'll know how to do this at the end of our lesson but I can just tell you right now if I convey Green acre to Amy for the rest of the Amy's life amy has a life estate then too Bobby if we ask what is Bobby's interests in Greenacre well we will know that that's an indivisible vested remainder right and that's what you're going to want to be able to do and that's what we're going to talk about how you come to these conclusions in classifying different parties interests in real property when we have a conveyance right and one other note here is typically the word convey right when you see that on a present of states and future interest back pattern that means we have a conveyance by a single deed if we see Oliver conveys Greenacre to Amy for Amy's life then to Bobby write the word conveys we can assume that we have one instrument one deed that this transfer is happening in right because we had multiple deeds that could affect the analysis so where multiple transactions I mean that could affect our analysis so we see the word conveys that typically connotates that we have a transfer of real property with one instrument that instrument being a deed okay but that's how this is going to look right so you know as a big picture the good news with President states and future interest even though it can be really complicated at times is from a standpoint of analysis it's actually pretty straightforward it's kind of like a fifth grade vocabulary matching tests where imagine that on you know in fifth grade you would have two columns or I'm sure all of us took one of these at another point at one point or another right on one column you have a list of words or terms and on the other column you have a list of definitions and you just had to match them right the proper term to the proper definition right well what we're doing in present States and future interests right we're going to have all of these different terms right these simple life is a fee tale right whatever executor e interest remainders we have all these different terms right and we just have to match the term to the language of the conveyance so whatever that language of the conveyance is we have to look at that and name it properly right we have to match it to the correct name so a lot of this is members they and there will be some you know critical thinking involved and especially when we get to future interest held by the transferee and we'll talk about that more in our second part to this lesson but there's going to be some of that going on but a lot of it we'll see is also just pure memorization so again it can get very complicated but overall all we're really doing here on real property fact patterns that are testing president estates and future interests is classifying the language of the conveyance to the proper term right and we have all these terms on the board that it could be right it's a limited it's a finite set of terms right and it's everything that you see on the board here pretty much covers that so we're gonna go into how you do this how you do what I just did here right when we have these types of conveyances I convey Greenacre to Amy for life than to Bobbie right very basic president of states and future interests we're gonna talk about how you identify what Amy's interest is and what Bobby's interest is how you know that amy has a life estate and Bobby has an endo feasibly vested remainder we're going to talk about how you get to those conclusions in this lesson again one other important note to make before we just jump into this is with present States and future interests there's only so much benefit you're going to get out of watching me and talk about this on the board the best way to really learn or master this subject is going to be working through practice problems and looking at example so of course as always below this video there's gonna be a lot more information a lot more examples and practice problems please make sure you look at all that because working through the practice problems is probably really where this is going to click for you but of course I'm going to just try to introduce you to some of these concepts and then you will be you have to it to work through some practice problems okay but let's start with our gateway question if we're trying to classify an interest in a piece of real property based on the language of a conveyance where do we begin right we see Oliver conveys Greenacre to Amy for life than to Bobby on the condition right we have all this stuff going on where do we start right well our first question has to be where the called the question tells you what is Amy's interests your first gateway question in determining Amy's interests in a piece of property Amy's interest in green acre is to ask well does Amy have a present estate or does she have a future interest right and this is a very easy distinction to make its dealing with possession right a present estate is a present possessory interest in real property a future interest is a present non possessory interest in real property so if you have possession you can walk up to the property and put your key in the door walk in use it enjoy that property you hold a present estate now if you're waiting on some future event to take place in order to gain that possessory interest then you hold a future interest right if you need somebody to die and then you're going to get a possessory interest that's typically what you see then you hold a future interest right so our gateway distinction is very easy right can this person walk up open the door door and possess the land if so they have a president of state if they're waiting on something to happen to gain that possessory interest they hold a future interest so let's start with present States first and then we'll talk about future interest later in this lesson okay so our first distinction that we have to make in presence States is the difference between freehold present States and non freehold present States again this is very easy a freehold present state is associated with ownership of real property non freehold present states are associated with leasing of real property okay so typically what we're going to see in present States and future entrants interests when we're dealing with conveniences of real property by deed we're talking about we hold present estates right we have three categories of freehold president states non freehold president states that deal with ownership or deal with leasing rather of real property we have four different types right erm of years tendency of will periodic tenancy in tenancy at sufferance we're gonna talk about all of these non for you hold present estates and a lot more detail when we get to landlord tenant laws so don't worry too much about what you see here for non freehold pressing estates it is possible you could see a president state term of years somebody conveys Greenacre to a me for 20 years then to Bobby so we want to be aware of the term of years president of state but all what we're really going to get into the meat of non freehold president States is when we get to landlord tenant law right because we're thinking about leasing of real property when we're talking about non freehold present States we're talking about conveyance is by deed that's typically going to be associated with ownership of real property which is freehold present estates and we have three types of freehold present estates we have the fee simple the life estate in the fee tail distinguishing between these three is pretty easy it's all about the duration of the estate right these simple is potentially infinite last forever the death of the holder of the fees simple does not terminate it nor does the conveyance of the property to another person terminate the fee simple it goes on and on and on through multiple transactions to different parties that can go to heirs and it can be sold and conveyed and transferred and that fees simple just last and last and last potentially for ever right the light the state is limited by a person's life right if I convey Greenacre to Amy for Amy's life right that is limited that's a life estate that life estate terminates when Amy dies it's a fixed duration right fee simple lasts forever so how do we create a fee simple there's three main types of language you see it is important to recognize that be simple and our freehold president states is the default estate so if I just say I convey Greenacre to AMI and nothing else right that's fee simple it's our default but typically what you're going to see to create a fee simple is and his or her heirs so I convey Greenacre to Amy and her heirs right that's capable of lasting forever that's be simple also if I use the word forever right I convey Greenacre to Amy forever right that creates a fee simple now compare that to I convey Greenacre to Amy for Amy's life right well that's a field that's a life estate right that estate is limited by Amy's life it's going to terminate when Amy dies right so it's not capable of lasting forever that's a life estate important to recognize with life estates the measuring life can be a person different than the transferee so if I convey Greenacre to Amy for the rest of bobbies life amy holds a life estate in that life estate terminates when Bobby dies this is called a life estate / atre V which is French for for another life right so again though a life estate is limited by a person's life which leaves us with the fee tail right anytime you see the word body in the conveyance right I convey Greenacre to Amy and the heirs of her body right that creates a fee tail now important to recognize that a fee tail has been largely abolished and today if somebody tries to do that it's typically going to be treated as fee simple so it's unlikely that you see fee tail tested very often on real property fact items but worth noting right if you see the word body that's fee tail right I can de Greenacre to Amy and the heirs of her body and essentially what this is doing is it's saying we're conveying a we're conveying feet ale meaning that we have to look at the basically sorry the estate will last as long it's Amy's lineal bloodline last right so as long as Amy's if we're conveying Greenacre to Amy and the heirs of her body that passes down amy's lineal bloodline when Amy's bloodline ends or dies so does the feet ale right again you can probably see some of the problems with that especially you know compared to the British aristocratic system with noblemen and Lords kind of looks a little bit like that we're talking about you know inheriting wealth and property by birthright right Thomas Jefferson and those guys didn't like the way that that looked which is why he tail it's been largely abolished but again just to note that if we do see too you know somebody in the heirs of their body right we know it's detail okay so the next distinction we have to make right whether we have fee simple or life estate right because those are going to be the main two we're gonna see tested and present States and future interests when we're talking about freehold pressing estates we have to determine whether that fee simple or that life estate is absolute or defeasible this is also relatively easy right if there is a provision added some sort of language or term or condition that is added by the transfer or in that conveyance of the real property that makes it possible for the estate to terminate before its natural termination or prematurely then the estate is going to be called defeasible Ryobi fee-simple defeasible or life estate defeasible so what's the natural termination of a fee simple right remember these simple virtually has no term natural termination it lasts forever so any condition added to a few simple that makes it possible to cut that fee simple short is going to be a fee simple defeasible if there's no condition justyou know I can pay Greenacre to Amy right then that's absolute we've had the transfer or has not added any language that makes it possible to cut that fee simple prematurely right with a life estate what's the natural termination of a life estate right well that's measured as a fixed duration it's measured by a person's life so any condition that's added that could terminate the estate that life estate before the person dies before that measuring life ends would make the life estate defeasible so for example if I said I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes right that's capable of lasting forever so we know it's be simple to Amy and her heirs right so we know that's be simple however I've added an express condition that could cut that be simple short right if Amy uses the land for any other purpose than farming that terminates it so we know it's be simple defeasible we've added an express term the transfer War has added a term that can cut that fee simple short so we know it's defeasible and this would apply to life estates as well so if we have a fee simple defeasible or a life estate defeasible there's in by the way life estate defeasible czar pretty rare you're not usually going to see that usually you see fee simple defeasible so that's why I'm just going to say these simple defeasible and the rest of our examples but it is one of these things again I'm gonna say this a lot of times just a note in your head so we're being technically sound that a life estate could be defeasible but you don't see that usually tested what you're going to see is probably be simple defeasible right so here the first question is we have three subcategories of defeasible right we have a defeasible subject to condition subsequent to feasible determinable and defeasible subject to an executory limitation the first question we want to ask is right here do we have a third party involved in this conveyance if we have a third party involved then we know it's defeasible subject to an executor II limitation so if I write me I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes and if amy uses the land for any other purpose then to Bobby and his heirs right what have I done well now Bobby is a third party right we've added a literal third party to the conveyance it's no longer just me and Amy we have Bobby as a third party so that means Amy's interest in Greenacre if that's what it is ask based on that language we know that it's be simple because we say to Amy and her heirs it's capable of lasting forever but then we add a condition that makes it possible to cut that estate short right if she uses it for any other purpose than farming cuts it short so we know it's defeasible okay well our next question is is it subject to condition subsequent to terminable or subject to an executory limitation well because we've added Bobby and if she fails to use that land for any other purpose than farming purposes right then it goes to Bobby this third party then we know her defeasible fee is subject to an executory limitation because we have a third party being Bobby okay so how do we do this if there's no third party right we remove Bobby from the equation well if there's only two parties if it's me and Amy one transfer or one transferee then we know it's either got to be in its defeasible right we have a defeasible fee it's either subject to a condition subsequent or determinable how do we make the distinction between these two it will be the language of that future event it's been added right remember to be defeasible the transfer or has to have added some language that could cut the estate short if that language is conditional we say it's subject to a condition subsequent if it's durational we say that it's defeasible determinable okay so the example I used would be considered conditional language anything that's like on the condition that or provided that or only if or but if or just if right all of that would be considered conditional language if the language where that future events added that could cut short the estate is durational meaning it deals with time right we call it determinable this would be things like during until while for as long as right all of those that deal with time and duration would be determinable and I know that that's nitpicky the difference between conditional and durational language so here's one of those times is probably good just to memorize certain terms right on the condition that provided that if but if only if is conditional language during while until for as long as is all durational or time language which is going to be determinable okay so our original example though I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes well there's no third party involved and that's conditional language I literally said on the condition that so we know that Amy would hold a fee simple defeasible subject to a condition subsequent now if I change the language to durational right I convey Greenacre to Amy and her heirs while she uses the farm for farm or while she uses Greenacre for farming purposes now we have Amy holds fee-simple defeasible determinable right because we've used durational language and there's no there party involved right so that is how we get through a present estates analysis it's not too bad right pressing the states there's nothing here that's too much of a curveball I think the one thing that's pretty nitpicky is just that difference between conditional language and durational language but I think you can memorize that right we can put a list below the video so you can see more examples there but that is present estates okay so we can move on to future interests and we will continue to kind of review present States as we talk about future interests so don't worry we'll go over some more examples here as we work through it but remember we said that our Gateway issue if the call of the question asks us what a person's interests in a piece of property is what we have to ask is that interest of President state or a future interest the remember that came down to possession we said a present possessory interest is a present state a present non possessory interest is a future interest right where you're waiting on some future event to take place before you gain your possessory interest it's a future interest so if we have a future interest somebody is waiting on some event to take place in order to get a possessory interest our first question has to be who is the holder of this future interest is it the transfer roar or is it the transferee right the transfer or being the person who's conveying the property the transfer the transferee being the person who is receiving the property okay so important to recognize that if there's no third party involved right meaning and we have a defeasible fee right or a light to stay which we'll see in a second but if there's no third party involved and we have these simple or a life estate either fee simple defeasible or just a life estate then we have a lot of memorization which we'll see right here that means that the transfer or is the holder of a future interest right so let's say and we can continue with our last example that I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes well we just said that that's fee-simple right this is Amy and her heirs it's capable of lasting forever but we've added the transfer or has added a condition that could cut it short so we know it's defeasible there's no third party involved it's just me and Amy and we used conditional language so it's the simple defeasible subject to a condition subsequent so the call of the question asked what is Amy's interest in green acre we would circle be simple defeasible subject to a condition subsequent but what if the call that question asked what is Michael's interest in green acre what's my interest right as the transfer roar this is one of those things that we just have to memorize right and I've color-coded this on the board right and I don't know hopefully you can see this might be a good time to go full screen but I put these little stars up here in different colors next to fees simple the like to say subject to a condition subsequent and determinable right here next to fee simple we have a blue star next to the life estate we have a red star subject to a condition subsequent we have purple and next to determinable we have green okay and the reason for this is those correspond to these future interests that are held by the transfer Rohrer okay so if the called the question is asking what interest the transfer Rohrer holds and we have fee simple or life estate right we have to go through this color coding to come to the right answer right so if we have a fee simple subject to a condition subsequent right blue and purple that means that the transfer or holds a right of entry right if we have a fee simple determinable that means the transfer or holds a possibility of river and if we have a life estate right that means that the transfer roar holds a reversion right so if I convey Greenacre to Amy for Amy's life right well there we know amy holds a life estate but what happens when Amy dies the property has to go somewhere right real property can't just be in limbo in the United States someone has to have a present estate at all times right we can't have real property just go up into some unclaimed limbo right somebody has a present possessory interest in real property in the United States at all times so if I convey Greenacre to Amy for life and I don't specify what happens to it after she dies well that means that I the transfer or hold a reversion right we called that a reversion right why because who is so we know that here I hold a future interest right because I'm waiting on some future event to happen if I'm conveying Greenacre to Amy for life right I don't have a present possessory interest I just conveyed that to Amy I'm waiting on a need to die in order to gain my possessory interest so well I hold a future interest who am I am I the person conveying the property or receiving will here like I am the transfer or I'm conveying right and then this is just memorization because it's a follows a life estate we call it a reversion this coming back to me from Amy Greenacre coming back right we call a reversion when it follows a life estate okay and again this is just memorization if it follows a fee simple subject to a condition subsequent it's a right of entry if it follows a fee simple determinable it's called a possibility of reverter right and the main difference here and it's one of those things you probably don't need to fully you know apply but just to note it in case write a right of entry would mean that if when this happens right whenever that condition fails right if I convey a fee simple defeasible subject to a condition subsequent right I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes well what happens if Amy comes in and drops a strip law right on Green Acres she immediately quits using it for farming purposes and puts a strip center right in the middle of green acre well again we know that the property can't go into limbo it's got to go somewhere I didn't specify where it goes so it's coming back to me right now what's interesting with a right of entry is if I actually want this to vest if I want to take my present possessory interest I have to reclaim the property it does not automatically vest a possibility of reverter does automatically vest so if I use durational language I say I convey green acre to Amy while she uses green acre for farming purposes when a knee drops that strips enter she quits using it for farming purposes remember LeAnn can't go into limbo that's the reverter right possibility of reverter it automatically comes back to me I don't have to reclaim it it automatically vests so a slight nuance there but the main thing remember we're just titling everybody's interest we're just matching so you normally you might not need to know that you might need to know it but just something to know right and again this is pure memorization blue and purple all right is a right of entry if the future interest is held by the transfer or if it's blue green a few simple determinable right it's possibility of reverter if it's after a life estate it's going to be reversion right and that's just something you have to memorize the one thing that I do think is helpful here and I probably should have intro'd with is just a basic principle right in the United States property can't go into limbo somebody has to have a present estate somebody has to have a possessory interest in the land at all times right you can't just go up into some weird type of limbo where there's a force field around it and no one has possession of it right it's got to be someone has a present a state in the land at all times right so that's why if the transfer or doesn't specify where it goes after the condition fails it's coming back to him right that's typically how that's going to work so a life estate if I convey Greenacre to a me for life and I don't specify where that goes when Amy dies it's coming back to me and we call that a reversion right same idea with right of entry and possibility of reverter if it's these simple defeasible subject to a condition subsequent we call it a right of entry remember if you do actually want that to vest the transfer or does have to reclaim the property if it's a fee simple defeasible determinable it vests automatically we call that a possibility of reverter when that condition fails automatically comes back to the transfer rule okay but that's future interests that are held by the transfer or again almost pure memorization so here we're future interest starts to get complicated is when we have future interests that are held by a transferee right so this would be typically where we have right got my marker yes where we have third parties involved right so imagine that I convey Greenacre to Amy and her heirs so we have Amy I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes and if she uses the land for any other purpose then - Bobby right back to this example right well we know here that amy holds a fee simple defeasible subject to an executor a limitation because we have a third party the question is what interest does bobby hold so let's go through our decision tree question number one does Bobby have a present possessory interest in Greenacre or does he need an event to happen in order to gain a possessory interest Bobby needs an event to happen right he needs the land he's Amy to quit using the land for farming purposes so Bobby holds a future entrance our next question is well is Bobby the transfer Rohrer or is he a transfer read here Bobby's receiving the land he's not conveying it so he's a transferee that means he either has an executory interest or a remainder how do we distinguish the difference between a remainder and an executory interest well the official definition of remainder is that a remainder is a future interest created and a transferee that is capable of becoming a possessory estate upon the natural termination of a prior state created by the same interests in other words write a remainder follows is a future interest that's held by the transferee that follows a life estate detail or term of years remember we said term of years typically not tested v-tail typically not tested the easy way to remember this is that a future interest that's held by the transferee that immediately follows a life estate we call a remainder right now the key to recognize here is that if there's any gap right because the one time you can get tricked here if I just tell students look if it's a future interest held by the transferee and it follows a life estate you call it a remainder the one time that you got to think twice here is that it has to be immediate upon that natural termination so when the person dies the future interest has to immediately become a possessory interest if there's any gap then it's not a remainder right and it's an executory interest and by the way the definition of an executor interest is if it's anything other than a remainder it's an executor interest it's held by the transferee and it's not a remainder then it's an executory interest which typically means that it follows the simple or we have a gap right because the remainder does require that it immediately becomes a present possessory interest upon the natural termination of the prior estate and because of that language right natural termination we know these simple virtually has no natural termination so that's why it has to follow a life estate of detail or term of years because these are the estates that have natural terminations right life estate terminates at that end of the measuring life the PE tail terminates at the end of the lineal blood-like and obviously a term of years terminates at the expiration of whatever the term is so that's why a remainder cannot follow these simple right because these simple lasts forever so the idea though is you can't have a gap either that upon termination we needed to immediately become possessory in order to have a remainder so imagine something crazy like I convey Greenacre to Amy for life and then after 10 minutes pass to Bobby right well in that case Bobby would have an executory interest because of that 10 minute gap even though it follows a life estate right what's really happening when I do that is I have conveyed a life estate to Amy I have retained a reversion for 10 minutes and then Bobby has an executory interest right because of that gap we can't have a remainder now of course I just say to Amy for life then to Bobby Bobby has a remainder because his present his estate becomes a president possessory estate his future interest becomes a present possessory estate immediately upon the natural termination of the prior life estate ami dying right all of this to say the easy way to remember this is if we have a future interest held by a transferee and it follows a fee simple it's an executor interest if we have a future interest held by transferee that immediately follows a life estate it's a remainder just look out for a gap right any gap in possession it's an executory interest okay so let's talk about the executor e interest first right so an executory interest is a future interest that's held by the transferee that follows a the simple we have two types of executor e interests we have this shifting executor e interest which divest the transferee we have the springing executory interest which divest the transfer or so in this example right where we say I convey Greenacre to Amy and her heirs on the condition that Amy only used the land for farming purposes but if amy uses the land for any other purpose then to Bobby our third party right then we know that amy has a fee simple defeasible subject to an executory limitation our question is what is Bobby's interests well does Bobby have a present possessory interest or is he waiting on some future event to happen he's waiting to get his present possessory interest there's a future interest is he the transfer or are the transferee Bobby's a transferee right he's receiving the property he's not the one conveying it does this follow the simple or life estate well we said to Amy and her heirs she's got a few simple defeasible subject to an executory limitation that means that Bobby has an executor e interest so our last question is well whose interest is being divested are we divesting a transferee or transfer or well here literally right we're divesting Amy's interest right so because Amy's interest is the prior interest being cut short amy is a transferee that means Bobby's interest is shifting because amy was another transferee his interest is divesting a transferee Amy means his executor interest is shifting so how would we make Bobby's executory and interest springing alright well we just got to get rid of Amy right because it would have to divest the transfer or which is me right and here we can draw up a we need a new fact pad and other than this farming purposes we've been on that too long so let's come up with something else we can we can get a new some new context here right let's say that I convey Greenacre to Bobby right because remember we have to get rid of a me so I convey Greenacre to Bobby if Bobby returns from Canada to the United States and the question asks what's Bobby's interests in green acre well again we'll work through it does Bobby of a present state or future interest Bobby's waiting on an event to happen or he needs an event to happen in order to gain a present possessory interest so he has a future interest is Bobby the transfer or or the transferee Bobby's receiving the properties of transferee does this follow fees simple or a life estate of course my interest you can't convey an interest larger than what you have so we know that I'm conveying fee simple I have fee simple because I'm saying to Bobby and his heirs if Bobby returns from Canada to the United States so that would mean it's an executory interest it's not following a life estate our question is is Bobby's executory interest shifting we're springing well who is a divesting it's divesting me right so that means because I am the transfer or because it divest the transfer or executory interest is springing right so we would circle if that was the question what is Bobby's interest and Greenacre he has a springing executor e interest right so that is how we handle present estates and future interests held by the transferee that follow feeds simple which means we have one big area left right and this is where things start to get really confusing now we're not going to go into everything in this lesson we're gonna need some more lessons down the line to cover all this but anytime right that we have a future interest held by a transferee it's important at this point I think to make one more note there are some limitations and exceptions to everything I'm about to talk about right here and even to that executor II interest right we have the rule in Shelly's case the doctrine of worthier title the rule against perpetuities and the destructibility of contented contingent remainders so we still have some limitations or some exceptions however you want to think about it to future interest that are held by the transferee right so just one note to make before we continue into remainders because a lot of that it's gonna be very applicable to remainders but still we want to cover the baseline first this is what you should do but keep in mind that we are going to have some limitations and exceptions to consider which we'll get into in our next lesson okay but let's talk about future interest held by a transferee that follow a life estate right a remainder okay so if we find that we have a future interest held by a transferee right a remainder that follows a life estate the first question is going to be is that remainder contingent or vested and we have two elements here for a vested remainder if both elements are satisfied the remainder is vested if either element is not satisfied the remainder is contingent okay so a vested a remainder is a remainder is created in a living ascertainable person and not subject to any condition precedent so let's talk about this first element first right what is a living ascertainable person well imagine that I convey Greenacre I mean draw it up again I convey Greenacre to Amy for the rest of Amy's life then to Bobby right well we know amy has a life estate very easy I convey Greenacre to Amy for the rest of Amy's life then to Bobby let's talk about Bobby what is Bobby's interests and Greenacre well Bobby does he have a present interest a present possessory interest in Greenacres is he waiting on something to happen to take possession he needs a me to die so he is a future interest clearly he's the transferee he's the one receiving the property this follows a life estate and there's no gap it becomes immediate his present possessory interest it happens immediately when Amy dies so we know it's a remainder our question is is a contingent or vested Bobby's remainder well the first question is is Bobby a living ascertainable person right is Bobby alive at the time of the conveyance is Bobby alive yes is Bobby ascertainable do we know who he is can we point to and say that's Bobby yes right Bobby is the clearest living ascertainable person this is the most obvious example of a vested remainder right there's no condition there's no sub this remainders not subject to a condition precedent no condition precedent right Bobby's clearly living and ascertainable this would be a vested remainder now we have three subcategories of a vested remainder which we'll talk about in a second but we're let's focus back on the first element right Bobby is living an ascertainable so what if I said that I convey Greenacre to Amy for life then two Amy's children and let's say that at the time of this conveyance amy has one living child named Bobby okay is this first element satisfied right we use same analysis our first question when we ask we know Bobby has a remainder visit Vesta or we know that Amy's children have a remainder the question is is that vested or contingent and the first question is it's our Amy's children living in ascertainable well we have Bobby he's alive at the time of the conveyance he's living and ascertainable so we would say yes right first element is satisfied right now what if amy is alive but has no children right same conveyance I convey Greenacre to Amy for life then to amy's children right but let's say at the time of the conveyance amy has no living children well as this first element satisfied now do we have a living ascertainable person no right amy has no living children so no one's alive no one's ascertainable that means because this first element is not satisfied the remainder is contingent what is it contingent on Amy having a child right it should be somewhat intuitive but because we don't have a living ascertainable person then Amy's children Amy's non-existent unborn children hold a contingent remainder right a little bit weird of unborn person can have a contingent remainder right which is why some of this gets a little bit confusing we have all these rules we'll talk about in future lessons but for right now right we can and we can accept that right Amy's unborn children that class would have a contingent remainder but because this first element is not satisfied okay the other classic that you would see is heirs right heirs are very easy by law by definition you cannot ascertain who a person's heirs are until that person dies so if I say I convey Greenacre to Amy for life then to Amy's Aires like that is always contingent we cannot calculate Amy's errors until she dies so at the time of that conveyance right those errors are not ascertainable even if theirs she has living children that we think are going to be her heirs right doesn't matter they could die even more could be born we cannot calculate or we cannot determine somebody's heirs until they die so if I say to Amy for life then to Amy's heirs and the question asked called the question asked what interests do amy's heirs have in Greenacre you know that's a contingent remainder follows a life safe the holders are transferee and those are unattainable errors are not ascertainable until that person dies okay so those are really the big three right you want to think about in terms of living and ascertainable we have something like - Amy for life Ben - Bobby clearly living an ascertainable - Amy for life then - Amy's children and Amy at the time of the conveyance amy has one child Bobby still living and ascertainable - Amy for life then to Amy's children at the time of the conveyance amy has no children right then we don't have a living ascertainable person and then heirs right heirs are different from children children we can ascertain we can look at a person and say yes they have a living child right now that's different then heirs heirs are not ascertainable until a person dies I see this confused sometimes we just want to be very clear there's a big difference between children grandchildren you know anything like that between ascertain well at the time of the conveyance and not ascertainable heirs are not ascertainable even if there you think you see living ascertainable airs there not until a person dies now of course if I said to Amy for life then to Grandpa Billy's heirs if at the time of the conveyance grandpa Billy is dead well then we can't ascertain his heirs right because he's dead we know who his heirs are we can go ascertain those people first element is satisfied right so that hinges on whether or not the person is alive or not if they're alive their heirs are not ascertainable if they're dead they're heirs are ascertainable okay now we still would need a living person just because there's a that's ascertainable if they're all dead right then it doesn't work right we still need a living ascertainable person hopefully that makes sense it's usually pretty easy to see though right if we have to Amy for life than to Bobbie right we can point at Bobby he's living he's ascertainable we're good to go right children is where it gets a little bit dicey all you got to ask is at the time of the conveyance does this party have any children if they do first element of satisfied that's living ascertainable they have a living child right than the others we got this first I'm a living ascertainable if they have no children then we don't have a living ascertainable person and then you want to remember heirs at the end heirs are not ascertainable until a person dies yeah that's our first element right our second element is the condition precedent right and this can be confusing sometimes to distinguish between a condition precedent and a condition subsequent but a condition precedent is an event other than the natural termination of the prior state that must occur before the remainder can become a possessory it's state right so if I convey Greenacre to you draw it up again I convey Greenacre to Amy for life then to Bobbie on the condition that or only if Bobby has reached the age of 25 right so I convey Greenacre to Amy for life and then if Bobby has reached the age of 25 then to Bobby something right like that right and the question is what is Bobby's interests in Greenacre we know amy has a live estate I convey Greenacre to Amy for life amy holds a life estate the question is what is Bobby's interest well we know Bobby has a future interest cuz he's waiting on Amy to die before he gains possession he's the transferee because he's receiving the property this follows a life estate we know it's a remainder question is a contingent or vested first element is Bobby a living and ascertainable person yes second question is this remainder subject to any condition precedent in order for Bobby to gain possession of Greenacre does he need a condition to be satisfied yes right Bobby has to be 25 years old and let's say I'm sorry at the time of the conveyance Bobby is 20 years old right that's important let's say at the time of the conveyance Bobby is 20 years old and I convey Greenacre to Amy for life then to Bobby if Bobby has reached age 25 only if Bobby has reached age 25 and at the time of the conveyance Bobby is 20 years old well Bobby needs five years to pass in order to gain possession right if Amy dies before Bobby turns 25 that condition precedent is not satisfied so we know Bobby has a contingent remainder it's contingent on him reaching age 25 before Amy dies right before the natural termination of the prior estate I important to recognize here we're talking about condition precedence a condition precedent isn't even other than the natural termination of the prior state that must occur before the remainder can become a possessory estate so here Bobby needs two things to happen right in order to gain his possessory estate and that conveyance I convey Greenacre to Amy for life then to Bobby if Bobby has reached the age of 25 well Bobby needs two things to happen he needs Amy's estate to terminate right he needs Amy to die right that is a condition precedent but we slay that out in the definition right a condition precedent isn't even other than the natural termination of the prior state so we're not talking about that sometimes I see that confuse the ending the natural termination is not a condition precedent for our purposes in determining contingent vs. vested remainders right so yes Bobby needs two things to happen he needs Amy to die that's the natural termination of the prior state that's not we're talking about here he also though needs to be 25 years old he needs five years to pass from the time of this conveyance before the natural termination when Amy dies in order to gain his present possessory estate okay so that's a condition precedent that's a contingent Bobby holds a contingent remainder because it's subject to a condition precedent right it's contingent on Bobby turning 25 years old before Amy dies okay so that's a condition precedent what would a condition subsequent look like well we already kind of talked about this right we talked about the defeasible subject to a condition subsequent right so imagine that I convey Greenacre to Amy for life then to Bobby on the condition that Bobby only used the land for farming purposes so I convey Greenacre to Amy for life then to Bobby on the condition that Bobby only used the land for farming purposes well what is Bobby's interest we know it's a future interest held by the transferee it follows a life say we know it's a remainder right Bobby has a remainder question is is it contingent or vested well as Bobby a living ascertainable person yes is there a condition precedent here must an event occur before Bobby gets his possessory interests in Greenacre right the answer here is going to be no when Amy dies Bobby's getting possession there's no condition that can change that that in the language of this conveyance to Amy for life then to Bobby on the condition that Bobby used the land for farming purposes right so Bobby can blow it two seconds after he gets it right if Bobby Amy dies and Bobby rolls up the green acre and a big dump truck and immediately destroys all the farmland right he can blow it but he did get possession immediately when Amy dies there was no event that had to occur before right before he took possession in order to gain that possessory interest right when Amy died Bobby is getting possession right we didn't have a condition precedent now after he takes possession right condition subsequent Bobby can blow it right he can shove the dump truck and kill all the farming and then his estate is going to terminate like but that's a condition subsequent because we don't need it to occur before his remainder becomes possessory that's a condition subsequent okay so this is a pure timing thing and we want to be very careful with it though right if the event must occur before the remainder can become possessory it's a condition precedent right and that's a remain that's a contingent remainder if it's a condition subsequent where this transferee is getting that property right there's no event that needs to happen he's getting other than the natural termination the prior state right he's getting it upon the natural termination the prior state no condition has to be satisfied but after he receives it his possession is conditioned on something happening right that's a condition subsequent right and we call that a remainder vest a vested remainder subject to divestment right if both elements are satisfied like what we have here I convey Greenacre to Amy for life then to Bobby on the condition that Bobby only used the land for farming purposes right well Bobby's a living ascertainable person there's no condition precedent so we know it's a vested remainder but because we have a condition subsequent we call that a vested remainder subject to divestment divestments basically another word for termination right so the idea here is well yeah he gets a vested remainder because both of these elements are satisfied but he is subject to termination it's subject to him blowing it if he uses the lam for any other reason than farming right so it's a vested remainder subject to termination or what we call a vested remainder subject to divestment he's getting the possession but it is still subject to termination which is a good segue into then what's the vested remainder subject to open right or sometimes called vested remainders subject to partial divestment this would be where the transferee is a part of a class that could enlarge there by diluting his interest right it's what we call partial divestment or subject to open so this would be remember how we talked about children right that's where you classically would see this imagine that we have I convey Greenacre to Amy for life then to Amy's children right I give a green acre to Amy for life then to amy's children and let's say at the time of the conveyance amy is one child Bobby what we said that satisfies Bo elements right because he Bobby's a living ascertainable person at the time of the conveyance / Salamis at site no condition precedent here we know it's a vested remainder however so if amy is still alive at the time of the conveyance right she can have more children right there by diluting Bobby's interests in green acre right the class size enlarges right at the time of the conveyance Bobby is getting 100 percent Interest a 100 percent possessory interest in green acre at the time of the conveyance but if amy has another child Christopher right Bobby's ensures that class size just enlarged Bobby's class size or Bobby's interests just got diluted 50 percent now we have two in the class right so that's why we call it subject to open or subject to partial divestment because it's not complete divestment it's not total termination Bobby doesn't lose his possessory estate but it does shrink it dilutes it's subject to partial divestment okay which leaves us with our last topic for discussion which is the indefeasible vested remainder or what sometimes called an in defeasible vested remainder right also sometimes just for short this is referred to as a vested remainder if you have a vested remainder and it's not subject to open or subject a divestment it's an aimed a feasibly vested remainder the defining quality with vested remainder indefeasible or an indivisible vested remainder is this idea of certainty right where we know who the party is right both of these elements have to be satisfied we have a living ascertainable person there's no condition precedent there's no condition subsequent and the class size cannot enlarge right it's a certainty right this is the classic vested remainder also called into feasibly vested remainder this would be I convey Greenacre to Amy for life then to Bobby right I they Greenacre to Amy for life then to Bobby Bobby is a living ascertainable person there's no condition precedence here so we know it's a vested remainder there's no condition subsequent Bobby's not a part of a class I could enlarge so it's an indie feasibly vested remainder very clean right and that's typically going to look like that I convey Greenacre to Amy for life then to Bobby but with that guys we have finally covered every different type of president of state and future interests that you can see right this is it this is a limited number it's finite it's learn about right it's going to take some work to get through practice problems we're gonna have more below this video examples and practice problems for you guys to work through but this is the general concept with one big caveat remember we said future interests that are held by the transferee are going to be subject to some limitations and exceptions to what we just talked about in four scenarios right we have the doctrine of worthier title we have Shelley's case we have the rule against perpetuities and the destructibility of contingent remainders so in our next lesson we're going to talk about some limitations on future interest held by the transferee but until then guys I wish you all the absolute best and I'll see you at our next lesson

Channel: Studicata

Views: 175,229

Keywords: future interests, future interest, possibility of reverter, life estate, right of entry, fee simple absolute, executory interest, property law, fee simple, contingent interests, vested remainder, contingent remainder, indefeasibly vested remainder, vested remainder subject to partial divestment, vested remainder subject to divestment, fee simple determinable, real property, freehold estate, present estates and future interests, studicata, real property bar

Id: L0tVSi1MGEI

Length: 65min 38sec (3938 seconds)

Published: Fri Jul 05 2019