8/10/2019 Future Interests Definitions

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Reversion

- A reversion is any future interest left in a transferor or her successor.- Example: “To A for life, then to B if B survives A.”

- If B does not survive A, there is a reversion to O in fee simple asolute.- !eversions are freely alienale, devisale and descendile.

Possibility of Reverter

- A reversion su"ect to a condition precedent

-Example: “To A and his heirs so lon# as the property is used for residential purposes only.”- If the condition is ro$en, reversion is automatic to O.

- “%so lon# as%” creates a fee simple determinale in A- &ossiilities of reverter are #enerally devisale, descendile and in most states, descendile.

-  Minority position: 'ome states ta$e the position that it is such a frail interest that if you tried to devise ita(ay, you destroy it.

-  )OTE A*'O: +hen (e are tal$in# aout mar$etaility statutes, they may serve to cut off the ri#ht of entry -

years after the date the instrument is created.

Right of Entry (Power of Termination)

- A po(er in a conveyor to ta$e certain action (hich (ill terminate a possessory estate (hich he has conveyed.- Example: “To A and his heirs on the condition that the property shall al(ays e%”

- 'ome states may say it is not a valid fee simple su"ect to condition suseuent (ithout the asolutely

clear lan#ua#e: “on the condition that, provided y, etc. a po(er of reentry”- /enerally devisale and descendile%

- reflects feelin# at the common la( that these (ere too “indefinite” of ever ta$in# possession, so that they

(ere not deviseale or alienale in that "urisdiction.- 0ost states no( do in fact allo( for these to e conveyed inter vivos

-  )OTE A*'O: +hen (e are tal$in# aout mar$etaility statutes, they may serve to cut off the ri#ht of entry -

years after the date the instrument is created.

Remainders

- 1irst example is a vested remainder, (hich ecomes a present estate%- It is vested in interest, not in possession. 2ou have a presently protectale interest ut have no ri#ht to

en"oy it until other estate is terminated.- 'econd example is a contin#ent remainder, (hich is su"ect to a condition precedent.

- It a condition precedent to the vestin# of the interest.

-It is contin#ent to some other event, in addition to the expiration of all prior estates, happenin#.

- 3ested remainders are devisale, %- 4ontin#ent remainders%

!E0E0BE!: 5 A possiility of reverter is (hat follo(s a fee simple determinale.

5 A &o(er of Entry6!i#ht of Termination is (hat follo(s a fee simple su"ect to a conditionsuseuent.

Classification of Remainders

- Indefeasily vested

- “To A for life, remainder to B and his heirs

- A has life estate

-B has indefeasily vested 7vested in uality and uantity8 remainder in fee simple asolute

- “To A for life, then to C for life

- A has a life estate- 4 has a vested remainder in a life estate. 49s life estate is vested, ut he may never en"oy it. +hy

Because he mi#ht die efore A does. But it is a vested remainder ecause there is no contin#ency precedin# it other than the expiration of the estate created simultaneously (ith it.

- O has a possiility of reverter: After A dies and after 4 dies, it reverts to O.

- 3ested su"ect to open- “To A for life, remainder to the children of B and their heirs

- 7B is alive, has at least one child and could have more8

8/10/2019 Future Interests Definitions

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- This is a #ift to a class. There is one memer to the class, and has a vested remainder as soon as they

are alive. ;o(ever, it is su"ect to e reduced in uantity if more memers of the class are created7more children are orn8.

- This is a defeasile interest: (ith each child orn<each additional memer of the class<your share of 

the interest #oes do(n.

- 3ested su"ect to a condition suseuent

- 3ested su"ect to total divestiture

-Technically these are oth vested su"ect to executorial limitations

- “To A for life, then to C and his heirs b!t if C does not marry before A dies, then to " and his heirs

- The lan#ua#e “ut if” #ives you a remainder vested to a condition suseuent.- If you too$ the #rant a(ay, left out the lan#ua#e “to = and his heirs” it (ould e a reversionary

interest: a ri#ht of reentry- “To A for life, then to B and his heirs, b!t if B fails to s!rvive A, then to C and his heirs

- A has a life estate- B has a vested remainder su"ect to a condition suseuent.

- 4ontin#ent 7also called su"ect to a condition precedent8

- “To A for life, remainder to B if he #asses the $ndiana bar%

- O has reversion- A has a life estate-

B has a contin#ent remainder - 4ontin#ency precedes vestin#. +e $no( that from the lan#ua#e.- Built in precedent contin#ency

- At common la(, if A died efore B had passed the ar, there (ould e a  gap in sesin. Thecommon la( said that contin#ent remainder (as destroyed.

- The Doctrine of Destructibility of Contingent Remainders: If the 4! fails to vest at or efore

the end of the life estate created (ith it, it is destroyed. This (as to help ma$e the title

mar$etale as early as possile.- 4ommon la( said that the life estate #oes ac$ to O, so O no( has a reversion in fee

simple and a life estate, and those t(o estates mer#e into a fee simple asolute. B9s

interest (as thou#ht to e too slender an estate to prevent a mer#er from occurrin#.- If you have destroyed the =estructiility =octrine, then this contin#ent interest transforms

itself into an executory limitation.

- +hy The contin#ent interest (ill cut do(n the 1'A that O has, so O has a reversion in

fee simple su"ect to the executory interest no( in B if he passes the ar. )ot only that, it

(ould e a sprin#in# executory interest in B in fee simple.

- “To A for life, remainder to B&s heirs

- O has a reversion interest in fee simple- A has a life estate- B has nothin#

- B9s heirs have a contin#ent remainder, ecause (e don9t $no( (ho they are until B dies. *ivin#

 people have no heirs. The heirs therefore are unascertainale people. It is contin#ent upon there

 ein# heirs (hen he dies.- This is an implied precedent contin#ency.

- If B dies efore A:- >nder common la(, it #oes ac$ to O

- )o(, it #oes to O in fee simple su"ect to an executory interest in B