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PR - 01 - Land Estat
Property
| Question | Answer |
|---|---|
| What type of interest is an estate in land? | POSSESSORY INTEREST |
| Types of present possessory estates | 1. Fee simple absolute 2. Defeasible fees 3. Fee tail 4. Life estate 5. Estates for years, periodic estates, estates at will, tenancies at sufferance |
| Fee simple absolute | Can be sold, divided, devised, or inherited and has an indefinite or potentially infinite duration. A fee simple is presumed in the ABSENCE OF EXPRESS CONTRARY INTENT |
| Defeasible fees | Fee simple estates of POTENTIALLY infinite duration that can be terminated by the happening of a specified event. |
| Fee simple determinable | Terminates upon the happening of a stated event and AUTOMATICALLY REVERTS to the grantor. Created by durational languages, such as "for so long as," "while," "during," or "until." |
| What does grantor have when giving a fee simple determinable? | Possibility of reverter |
| Fee simple subject to condition subsequent | An estate which the grantor RESERVES THE RIGHT TO TERMINATE the estate upon the happening of a stated event. Created by conditional words, such as "upon condition that," "provided that," "but if," and "if it happens that." |
| What does grantor have when giving a fee simple subject to condition subsequent? | The right of entry. However, it must be EXPRESSLY RESERVED, in contrast with a possibility of reverter, it does not arise automatically. |
| What if conveyance contains both durational language AND a power of termination? | Will likely be construed as creating a fee simple subject to a condition subsequent, because the forfeiture is OPTIONAL at the grantor's election rather than automatic. |
| Fee subject to an executory interest | If a fee simple estate terminates upon the happening of a stated event and then passes to a THIRD PARTY rather than reverting to the grantor or giving the grantor a right to terminate, the third party has an executory interest. |
| Conditions and limitations that violate public policy | Generally are struck down and the grantee takes free of restraint. If the purpose of the condition is to PENALIZE MARRIAGE or encourage divorce, it will be struck down. If purpose is to GIVE SUPPORT until marriage or in event of divorce, it will be upheld |
| Fee tail | An estate where INHERITABILITY IS LIMITED TO LINEAL HEIRS. It is created by the words "to A and the heirs of his body." Most jurisdictions have abolished fee tails, and an attempt to create one results in a fee simple. |
| Life estate | MEASURED BY TE LIFE or lives of one or more persons. It may be created by operation of law or by conveyance. |
| Life Estate Pur Autre Vie | A life estate measured by a life OTHER THAN THE GRANTEE'S. A life estate pur autre vie also results when the life tenant CONVEYS his life estate to another. |
| Doctrine of Waste | A life tenant is entitled to any ORDINARY uses and profits of the land but cannot do anything that injures the interests of a remainderman or reversioner. |
| What may a future interest holder do under doctrine of waste if life tenant is wasting resources? | She may sue for damages or to enjoin such acts, and if she spends money to perform the life tenant's obligations, she is entitled to reimbursement. |
| Affirmative waste | Exploitation of natural resources by a life limited to situations when: 1. necessary for REPAIR OR MAINTENANCE of land 2. land is SUITABLE ONLY FOR SUCH USE, or 3. it is expressly/impliedly PERMITTED BY THE GRANTOR |
| Open mines doctrine | If mining was done on the land prior to the life estate, the life tenant can continue mining - but is limited to the mines ALREADY OPEN |
| What obligations does a life tenant have? | 1. Preserve land and structures in REASONABLE STATE OF REPAIR 2. Pay INTEREST on mortgages (not principle) 3. Pay ORDINARY TAXES on the land, and 4. Pay SPECIAL ASSESSMENTS for public improvements OF SHORT DURATION |
| Permissive waste | Occurs when life tenant fails to do one of its obligations. This duty is LIMITED to the extent of the income or profits generated from the land. |
| What is a life tenant NOT obligated to do? | Insure the premises for the benefit of remaindermen and is not responsible for damages caused by a third party tortfeasor. |
| Ameliorative waste | A change that BENEFITS the property economically |
| When may a life tenant alter or demolish existing buildings? | Market value of future interest is not diminished and EITHER: 1. Remaindermen do not object, or 2. Substantial and permanent change in the neighborhood has deprived property in its current form of reasonable productivity or usefulness. |
| Example of substantial and permanent change in neighborhood conditions | Change from residential to 90% industrial |
| "To A and his heirs" "To A" | Fee simple absolute |
| "To A and his heirs for so long as..." "until..." "while..." "during..." | Fee simple determinable |
| "To A and his heirs but if..." "upon condition that..." "provided that..." | Fee simple subject to condition subsequent |
| "To A and his heirs for so long as..., and if not..., to B" To A and his heirs, but if..., to B" | Fee simple subject to an executory interest |
| "To A and the heirs of his body" | Fee tail |
| "To A for life" | Life estate |
| Future interest of a fee simple absolute | NONE |
| Future interest of a fee simple determinable | Possibility of reverter |
| Future interest of a fee simple subject to condition subsequent | Right of entry |
| Future interest of a fee simple subject to an executory interest | Possibility of reverter |
| Future interest of a fee tail | Reversion |
| Future interest of a life estate | Reversion |
| Reversionary interests | Give the holder a right or possibility of FUTURE possession of an estate. It is a PRESENT, legally protected right in property. |
| Rights of grantor: Possibility of reverter | Estate AUTOMATICALLY reverts to the grantor upon occurrence of stated event |
| Rights of grantor: Right of entry | Estate does NOT revert automatically. Grantor must EXERCISE HIS RIGHT OF ENTRY |
| Remainders | A future interest in a THIRD PERSON that can become possessory on the NATURAL EXPIRATION of the preceding estate. Must be EXPRESSLY CREATED in the instrument creating the preceding possessory estate. |
| Vested Remainder | A vested remainder is created in an EXISTING OR ASCERTAINED person, and NOT SUBJECT TO A CONDITION PRECEDENT. The remainderman has a right to immediate possession upon normal termination of the preceding estate. |
| Indefeasibly Vested Remaineder | A vested remainder that is not subject to divestment or diminution. |
| Contingent remainders | Remainders created in UNBORN or UNASCERTAINED persons, or SUBJECT TO A CONDITION PRECEDENT |
| Doctrine of merger | When one person acquires all of the present and future interests in land except a contingent remainder, under the common law, the contingent remainder is destroyed. |
| Rule in Shelley's Case | If the same instrument created a life estate in A and gave the remainder only to A's heirs, the remainder was not recognized, and A took the life estate AND the remainder. THIS HAS BEEN ABOLISHED |
| Doctrine of Worthier Title | A remainder in the grantor's heirs is invalid and becomes a reversion in the grantor. ONLY APPLIES TO INTER VIVOS TRANSFERS (not wills) and ONLY IF THE WORD "HEIRS" is used |
| Example of doctrine of worthier title | O grants Blackacre "to A for life, then to the heirs of O." Under DOWT, A has a life estate, and O has a reversion |
| Executory interests | Future interest in third parties that either DIVEST a transferee's preceding freehold estate (SHIFTING INTEREST), or follow a gap in possession or cut short a grantor's estate (SPRINGING INTEREST) |
| Springing or shifting interest? O grants "to A and his heirs when A marries B" | A has a SPRINGING executory interest because it divests in the grantor's estate. |
| Springing or shifting interest? O grants "to A for life, then to B and his heirs; but if B predeceases A, then to C and his heirs" | C has a SHIFTING executory interest because it divests a transferee's preceding estate |
| Effect of Rule Against Perpetuities on executory interests | Executory interests are not considered vested and thus are subject to RAP, but executory interests are not destructible. |
| Class gifts | A class is a group of persons having a common characteristic. The share of each member is determined by the number of persons in the class. A class gift of a remainder may be vested subject to open or contingent. |
| Vested remainder subject to open | Class where at least one group member exists |
| Vested remainder contingent | Class where all group members are unascertained |
| Rule of Convenience | In the absence of express contrary intent, a class closes when SOME MEMBER OF THE CLASS can call for distribution of her share of the class gift. |
| Persons in gestation at the time a class closes | ARE INCLUDED in the class |
| Survival of a class member | Survival of a class member to the time of closing is usually unnecessary to share in a future gift UNLESS survival was made an express condition. However, certain terms are construed to create IMPLIED survivorship conditions |
| Trust | A fiduciary relationship w/ respect to property (RES) wherein the TRUSTEE holds legal title to the property subject to enforceable equitable rights in a BENEFICIARY. |
| Settlor | Creator of the trust. Must own the property at the time of trust creation and must have had the INTENT to create the trust |
| Creation of trusts | A trust can be created by will, inter vivos transfer of the trust res, or inter vivos declaration that the settlor is holding property in trust. ALL TRUSTS OF REAL PROPERTY MUST BE IN WRITING. |
| Charitable trusts | A charitable trust must have a charitable purpose. |
| Rules governing charitable trusts differ from those applicable to private trusts in what ways? | 1. Charitable trust must have INDEFINITE BENEFICIARIES 2. It may be PERPETUAL (RAP does not apply) 3. The CY PRES DOCTRINE applies |
| Cy Pres Doctrine | Allows a court to select an alternative charity when the purpose of the settlor becomes impractical or impossible. |
| Does RAP apply to a shift from a private trust to a charitable trust, or vice versa? | YES |
Created by:
tmays000