Future Interests

Alex Cooper
Mind Map by Alex Cooper, updated more than 1 year ago
Alex Cooper
Created by Alex Cooper over 6 years ago
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Description

Property Law Mind Map on Future Interests, created by Alex Cooper on 07/03/2013.
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Resource summary

Future Interests
1 Retained by Grantor
1.1 Reverter - only for Fee Simple Determinable
1.2 Right of Entry / Power of Termination - only for Fee Simple Subject to Condition Subsequent
1.3 Reversion

Annotations:

  • Future interest that arises in a grantor who transfers an estate of lesser quantum than she started with 
2 Retained by Transferree
2.1 3) Executory interest

Annotations:

  • Future interest of defeasible fee NY: abolished distinction below - both called: Remainders Subject to a Condition Precedent
2.1.1 i) Shifting executory interest

Annotations:

  • Always follows a defeasible fee and cuts short someone other than grantor.
2.1.1.1 e.g. "To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs"

Annotations:

  • B has a shifting executory interest. A has a fee simple subject to B's shifting executory interest.
2.1.2 ii) Springing executory interest

Annotations:

  • Cuts short grantor or grantor's heirs
2.1.2.1 e.g. "To A, if and when he marries." A is unmarried.

Annotations:

  • A has a springing executory interest. O has a fee simple subject to A's springing executory interest. 
2.1.3 Rule Against Perpetuities applies
2.1.3.1 Where no limit on the time within which it must vest violates RAP.
2.1.3.1.1 e.g. "To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs."
2.1.3.1.1.1 Offensive future interest stricken: "To A and his heirs so long as the land is used for farm purposes."

Annotations:

  • A has a fee simple determinable. Grantor has the possibility of reverter. 
2.2 Remainder

Annotations:

  • "To A for life, then to B" or "To A for ten years, then to B" Always accompanies a preceding estate of known fixed duration - usually life estate or term of years.
2.2.1 1) Vested remainder

Annotations:

  • Where remainder is both an ascertained person and is not subject to any condition precedent. 
2.2.1.1 i) Indefeasibly vested remainder

Annotations:

  • Holder of this remainder is certain to acquire an estate in the future.
2.2.1.1.1 e.g. "To A for life, remainder to B." A is alive. B is alive
2.2.1.1.1.1 If B predeceases A - B's future interest passes by will or intestacy
2.2.1.2 ii) Vested remainder subject to complete defeasance / vested remainder subject to total divestment / in NY - vested remainder subject to total defeasance

Annotations:

  • Remainderman's taking could be cut short because of a condition subsequent. 
2.2.1.2.1 e.g. "To A for life, remainder to B, provided, however, that if B dies under the age of 25, to C"

Annotations:

  • If B is under 25 at time of A's death, B still takes.  However, B must live to 25 for his estate to retain his interest - otherwise passes to C. 
2.2.1.2.1.1 Grantor's future interest: Reversion
2.2.1.2.1.2 C has a shifting executory interest
2.2.1.3 Class closed = No vested remainder!
2.2.1.3.1 CL Rule of Convenience

Annotations:

  • Class closes whenever any member can demand possession.
2.2.1.3.1.1 Exception: Womb Rule
2.2.1.4 Class open
2.2.1.4.1 iii) Vested remainder subject to open

Annotations:

  • Additional takers can still join group = partial diminution of share
2.2.1.4.1.1 e.g. "To A for life, then to B's children." A is alive. B has two children, C and D.
2.2.1.4.1.1.1 If C or D predeceases A - share goes to their divsees or heirs
2.2.1.4.1.2 Rule Against Perpetuities may apply
2.2.1.4.1.2.1 Gift that is conditioned on the members surviving to an age beyond 21 violates RAP = void
2.2.1.4.1.2.1.1 e.g. "To A for life, then to such of A's children as live to attain the age of 30." A has two children, B and C. B is 35 and C is 40. A is alive
2.2.1.4.1.2.1.1.1 Grantor has a reversion
2.2.2 2) Contingent remainder

Annotations:

  • Where remainder is an unascertained person or is subject to a condition precedent, or both. 
2.2.2.1 Later person ascertained or condition met
2.2.2.1.1 Contingent remainder becomes: Indefeasibly vested remainder
2.2.2.2 Later person ascertained or condition no met
2.2.2.2.1 Grantor's future interest = Reversion
2.2.2.3 Rule of destructibility - CL vs. Now

Annotations:

  • At common law, a contingent remainder was destroyed if it was still contingent at the time the proceeding estate ended. Rule abolished in NY!   Now - if still contingent grantor or grantor's heirs hold estate for remainder subject to B's springing executory interest.
2.2.2.4 Rule in Shelly's Case - CL vs. Now
2.2.2.5 The Doctrine of Worthier Title
2.2.2.6 Rule Against Perpetuities applies
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