PROPERTY LAW Eric V. Hull, J.D., LL.M. Professor of Law Class 13: Future Interest (Part 2)
Future Interests created in Grantees (Transferee): : 1. remainder 2. executory interest
Remainders A remainder is a future interest in a grantee (transferee) that: 1. is capable of becoming possessory immediately upon the expiation of the prior estate; and 2. does not divest (cut short) any interest in a prior grantee (transferee).
O to A for life, then to B and her heirs if B discovers the cure to cancer . Is B’s interest capable of becoming possessory at the expiration of the preceding estate? Yes! Does B’s interest divest any interest in a prior transferee? No! B’s interest can only become possessory at the natural end of A’s estate. Compare: O to A and his heirs, but if B discovers the cure to cancer, then to B and her heirs. How is this conveyance different? B could cut A’s estate prior to its natural end if B discovers the cure for Cancer. Present Interest: A has a fee simple subject to an executory limitation. Future Interest: B has an executory interest . Present Interest: A has a life estate. Future Interest: B has a (contingent) remainder in fee simple absolute. Future Interest: O has a reversion.
Rule: A remainder is vested if its owner is ready and able to take possession whenever and however the preceding estate terminates. A remainder is vested if it is given to a person who is: 1. existing 2. ascertainable; and 3. not subject to a condition precedent that prevents him from taking possession whenever and however the preceding estate ends. Note: Vested remainders can be: • indefeasibly vested • vested subject to divestment • vested subject to open
Future Interests that can be created only in Grantees 1 (a). Indefeasibly Vested Remainder (Vested Remainder): O to A for life, remainder to B and her heirs . A remainder (either type-vested or contingent) must be expressly created. If it is not present, there is a reversion to grantor. Vested remainders are: • alienable • devisable • inheritable
Created in an existing, ascertainable person : The person must be: 1) alive and 2) identifiable at the time of the transfer Ex. O to A for life, then to A’s future children, then to D’s heirs . Assume D is alive. Which future interests are vested? Present Interest: A has a life estate . Future Interests: A’s future children do not have a vested remainder because they are not ascertainable (they are unborn). Future Interest: D is alive and therefore has no heir’s, so the remainder in D’s heirs is not vested.
No condition precedent A condition precedent is any condition that the grantee/transferee must meet before the remainder interest can become possessory other than the natural termination of the prior estate. Compare: O to A for life, then to B if B wins the Boston Marathon .
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- Fall '08
- Remainder, Real property law, Future interest