Class XVII – Estates Review

1. Class XVII – EstatesReview Property Prof. David Glazier Oct 24, 2006

2. Overview of Today’s Class • Review take home problems • Rules for “class” conveyances • Special rules of construction • - Destructability of contingent remainders • - Merger rule • - Doctrine of worthier title • - Rule in Shelley’s case

3. Classification of Remainders • To A for lifeRemainder Vested- (1) held by an identifiable person, and (2) not subject to condition precedent To A for life, then to B Contingent- (1) holder unknown at conveyance, or (2) subject to condition precedent To A for life, then to the President To A for life, then to B if A goes to law school Vesting does not equate to a right to possession RAP is about interest vesting, not possession

4. Take Home Review • O conveys Blackacre “to A and her heirs” • 1. A’s interest is: • c. a fee simple • 2. O retains: • d. nothing

5. Take Home Review • O conveys Blackacre “to A for life, then to B for life, then to C” • 3. B has: • b. a vested remainder in life estate • 4. C has: • d. a vested remainder in fee simple

6. Take Home Review • O conveys Blackacre “to A as long as it is used as a law school” . . . In 2003 A decides to turn it into a business school after the last current student graduates on May 30, 2006. • 5. Before the 2006 graduation, O has: • a. a possibility of reverter • 6. As of June 1, 2006 O has: • d. a fee simple absolute

7. Take Home Review • O conveys Blackacre “to B for life, then to B’s surviving children.” • 7. B’s children have: • b. a contingent remainder in fee simple

8. Take Home Review • O conveys Blackacre “to A and his heirs until B graduates from law school, then to C” • 8. A has: • d. a fee simple subject to executory limitation • 9. C has: • d. An executory interest

9. Take Home Review • O conveys Blackacre “to A and her heirs so long as used for a law school.” • 10. The conveyance: • d. is valid because O holds a possibility of reverter

10. Take Home Review • O conveys Blackacre “to A and her heirs so long as used for a law school, then to B” O conveys all real prop interests to X. • 11. The conveyance: • a. is invalid because it violates the Rule Against Perpetuities • 12. What is X’s interest in Blackacre? • c. possibility of reverter

11. Take Home Review • O conveys Blackacre “to A but if the property ceases to be used as a law school, then to B” • 13. A has a: • a. fee simple absolute

12. Take Home Review • O devises Blackacre “to my grandchildren born in the next 25 years.” O currently had no grandchildren. • 14. A’s grandchildren have: • b. contingent remainder in fee simple

13. Take Home Review • O conveys Blackacre “to the children of A who reach 30.” A is alive with children 25 and 29. • 15. A’s children have: • d. nothing because of a Rule Against Perpetuities violation

14. Take Home Problems • Grading:13-15 right – 5 points • 9-12 right – 4 points • 6-8 right – 3 points • 3-5 right – 2 points • 0-2 right – 1 point • No submission – 0 points

15. Class Gifts • To A for life, then to A’s children • - “A’s children” is a class • -- identified by description vice name • -- membership can change over time • - If class can increase, it is “open” • “To A’s children” while A is alive • - If class can’t increase, it is “closed” • “To A’s children” after A’s death

16. Closing the Class • 1. A class closes naturally when no one else can be born into it • - “To the children of A” and A is dead > 9mos • 2. Rule of Convenience closes a class when any member can demand possession • - Members born subsequently are excluded • - Members already living take when they meet any condition precedent • -- “To A for life, then to B’s children” • -- “To A for life, then to B’s children > 21”

17. Vesting of Class Gifts • A class gift vests if: • (1) > one member is identifiable by name, and • (2) no condition precedent must be satisfied • “To A for life, then to the children of A” and A has a child A1 • - “vested remainder subject to open”

18. Destructability of Contingent Remainders *** • Early English rule to simplify possession • Under this rule, contingent remainder destroyed if not vested at termination of prior estate • - “To A for life, then to B if he reaches age 21” • -- If B is 15 when A dies, O A O B • -- Under rule, if B is 15, remainder killed • --- O retakes in fee simple • Still the law only in IN, KS, NH, and OK

19. The Merger Rule *** • “If a vested life estate and the next succeeding vested estate become owned by same O, the estates are merged into one” • To A for life, then to B for life if B >21, then to C • - if A buys C remainder, A has vested life estate and succeeding vested estate • -- estates are “merged” giving A fee simple • -- B loses out on contingent remainder • Now obsolete!

20. Doctrine of Worthier Title *** • Inter vivos transfers • - Conveyance of future interest to grantor’s heirs is actually a reversion in grantor • -- “To A for life, then to O’s heirs” is treated as if it was “To A for life” • -- Keeps O from avoiding estate tax • Testamentary transfers • - Rule has no effect, O is dead and property is conveyed from estate

21. The Rule in Shelley’s Case *** • When an instrument transferring a freehold estate also transfers a remainder to that person’s heirs, both are considered to be held by the freeholder • “To A for life, remainder to A’s heirs” • Becomes • “To A for life, remainder to A and his heirs” • Merger doctrine then makes it • “To A and his heirs”(fee simple)

22. Next Class • Thursday Oct 26 – finish joint tenants • Joint tenancy bank accounts pp. 289-90 *** • Delfino v. Vealencis pp. 292-96 • Spiller v. Mackereth pp. 300-02 • Swartzbaugh v. Sampson pp. 303-07

23. RAP Online Tutorial • Tutorial developed by Prof. June Carbone of Santa Clara School of law: • http://www.scu.edu/law/FacWebPage/Carbone/RAP/start.htm

24. Questions?