PROPERTY D SLIDES

1. PROPERTY D SLIDES 3-15-16 Florida Primary Day National Everything-You-Think is Wrong Day

2. Tuesday March 15 Music:Wynton Marsalis, TrumpetClassic Wynton (1998)

3. Previously in Property D Chapter 4: Distinctions You Should Know Present Possessory Estates v. Future Interests Fee Simple v.Finite Present Estates Interests Following Finite Estates: Reversions v. Remainders Vested v. Contingent Remainders Common Law v. Today Defeasible Interests: Determinable v. on Condition Subsequent (We’ll Review Before Doing Problem 4I)

4. WARM-UP/REVIEW: Basic DistinctionsPresent Possessory Estates v. Future Interests PRESENT POSSESSORY ESTATE: Entitles holder to immediate and current use and possession of the land in question. FUTURE INTEREST: Holder has no right to immediate and current use and possession of the land, but instead right to potentially use and possess the land at some point in the future. Possession may be relatively certain to occur (e.g., Vested Remainders, some Reversions) or dependent on uncertain conditions (e.g., Contingent Remainders, Possibilities of Reverter)

5. WARM-UP/REVIEW: Basic DistinctionsPresent Possessory Estates v. Future Interests PRESENT POSSESSORY ESTATES • Fee Simple • Life Estate • Term of Years • Fee Tail FUTURE INTERESTS • Reversion • Possibility of Reverter • Right of [Re]Entry • Vested Remainder • Contingent Remainder • Executory Interest

6. WARM-UP/REVIEW: Basic DistinctionsFee Simple v. Finite Present Estates FEE SIMPLE: Entitles holder to immediate and current use and possession of the land in question and rights to use, possess and transfer it for the infinite future. FINITE PRESENT ESTATE: Entitles holder to immediate and current use and possession of the land in question. Rights end at a fixed point in the future: Life Estate: End of Original Grantee’s Life Term of Years: End of Specified Length of Time Fee Tail (Common Law): End of Grantee’s Direct Line of Descent

7. WARM-UP/REVIEW: Basic DistinctionsInterests Following Finite Estates Reversion v. Remainder REVERSION: Future interest implicitly retained by grantor when s/he conveys a finite estate without indicating who will have rights when it expires. REMAINDER: Future interest in a third party that follows naturally upon the termination of a finite estate. It is always expressly conveyed by the grantor.

8. WARM-UP/REVIEW: Basic DistinctionsVested v. Contingent Remainder VESTEDIF: Grantee is living ascertainable person AND Clause creating the remainder contains no condition on grantee taking the property except expiration of prior estate. CONTINGENTIF: Grantee is presently unborn or unascertainableOR Clause creating the remainder contains an explicit condition on grantee taking the property.

9. WARM-UP/REVIEW: BasicsRemainders in … “To Fred for life, then to Wilma for life.” Wilma has a vested remainder in life estate. “To Fred for life,then to Wilma and her heirs if Dino survives Fred. Wilma has a contingent remainder in fee simple absolute.

10. WARM-UP/REVIEW: Basic DistinctionsCommon Law v. Today “At Common Law”: Dates prior to modern streamlining of the rules. (e.g., 1600-1800) “Today”: Dates after modern streamlining of the rules. (e.g., 1950-present)

11. WARM-UP/REVIEW: Basic DistinctionsCommon Law v. Today “At Common Law” • Default Estate = Life Estate • Fee Tail is Available “Today” • Default Estate = Fee Simple • Fee Tail Eliminated in All Jurisdictions

12. Executory Interests

13. Executory Interest • Future interest in grantee. • Cuts off prior vested interest (present estate or reversion or vested remainder) rather than waiting for it to expire naturally.

14. Pre-1536 (= Pre-“Common Law”) Limitations on Future Interests in Grantees • Must follow finite estate. • Must be capable of taking effect at the expiration of preceding estate. • Must not take effect before the expiration of the preceding estate. Elimination of these Rules in 1536 Allows Creation of Executory Interests

15. Executory Interests Shifting v. Springing Executory Interest • No legal consequence; just categorization • Shifting Executory Interest cuts off interest of another grantee • Springing Executory Interest cuts off grantor’s fee simple or reversion • Physical Model/Analogy (if helpful)

16. Executory Interests EXAMPLES Shifting Executory Interest: To Danny & his heirs so long as no tobacco is grown on the land, otherwise to Brandon and his heirs.

17. Executory Interests EXAMPLES Springing Executory Interest: To Blayne if she passes the California bar exam. Grantor who started with Fee Simple Absolute is left with Fee Simple on Executory Limitation

18. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.” Let’s Return to Problem 4F & Riverdale High

19. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.” • Veronica: Life Estate • Betty: Contingent Remainder in Fee Simple • Reggie: Reversion • What if Veronica dies while Betty is still age 17? • Life Estate is Over • Betty Can’t Take; Condition Not Met • So Who Gets What?

20. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Common Law • If contingency not met when prior estate ends, contingent remainder is destroyed. • Betty has nothing. • If Betty isn’t ready, she loses her “table.” • Reggie’s Reversion becomes Fee Simple Absolute

21. Doctrine of Destructability of Contingent Remainders (Common Law)First Common Application If contingency not met when prior estate ends, contingent remainder is destroyed.

22. Doctrine of Destructability of Contingent Remainders Today: Overruled by statute or caselaw in everyAmerican jurisdiction except …

23. Doctrine of Destructability of Contingent Remainders (Today) Overruled by statute or caselaw in every American jurisdiction except …

24. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Today (except FL) • If contingency not met when prior estate ends, we wait to see if it is met later. • Betty’sremainderbecomes an executory interest. • Reggie takes possession and has fee simple on executory limitation (cut off if B turns 21)

25. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Today (except FL)

26. Doctrine of Destructability of Contingent Remainders (Common Law)Second Common Application Where there is a life estate, one or more contingent remainders, and a reversion, and the life estate and reversion merge into a fee simple, the contingent remainders are destroyed.

27. Doctrine of Destructability of Contingent Remainders Second Common Application • Elyse “to Gina for life, then to Haley if Haley passes a bar exam.

28. Doctrine of Destructability of Contingent Remainders Second Common Application (Common Law) • Elyse “to Gina for life, then to Haley if Haley passes a bar exam. • Gina purchases Reversion from Elyse • Life Estate & ReversionMerge  Fee Simple Absolute • Haley’s ContingentRemainder is Destroyed ↓ ↓ ↓ Merge & Destroy ↓ ↓ ↓

29. Today (Everywhere except Florida)Merger without Destruction • Elyse “to Gina for life, then to Haley if Haley passes a bar exam. • Gina purchases Reversion from Elyse • Life Estate & ReversionMerge  Fee Simple on Executory Limitation • Haley’s ContingentRemainder Becomes an Executory Interest ↓ ↓ ↓ Merge ↓ ↓ ↓

30. PROBLEMS 4J-4N:PLEASE HOLD QUESTIONSUNTILWE FINISH PROBLEM 4N

31. OLYMPIC: Problems 4J-4L EEL GLACIER

32. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda?

33. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted?

34. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted: Contingent Remainder (if today: in f.s.) • Anything Else?

35. Olympic: (4J):Mary"to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted: Contingent Remainder (if today: in f.s.) • Mary: Reversion

36. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Rhoda a proper funeral." • Rhoda: Life Estate • Ted? (Does Change from Mary’s Funeral to Rhoda’s Affect Nature of Ted’s Interest?)

37. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Rhoda a proper funeral." • Rhoda: Life Estate • Ted? (Does Change from Mary’s Funeral to Rhoda’s Affect Nature of Ted’s Interest?) • HINT: What would make a funeral not “proper”?

38. Olympic: (4J): Mary "to Rhoda for life, then to Ted if Ted gives MaryRhoda a proper funeral." • Rhoda: Life Estate • Ted can’t possibly give Rhoda a “proper” funeral by the time Rhoda dies. • There will be a gap in time between the end of R’s life estate and Ted’s interest. • Thus, Ted’s interest cannot be a remainder; • So Ted has …?

39. Olympic: (4J):Mary"to Rhoda for life, then to Ted if Ted gives Rhoda a proper funeral." • Rhoda: Life Estate • Mary: Reversion • Ted: Springing Executory Interest (would cut off grantor’s interest: reversion)

40. EXAM TIP: USE COMMON SENSE!! • Can’t give a “proper” funeral to a person until after the person has died.

41. EXAM TIP: USE COMMON SENSE!! • Can’t give a “proper” funeral to a person until after the person has died. • Similarly, if an interest has been conveyed in a will, you can assume the grantor is dead (will would not have become effective until death of grantor).

42. Life Estates & Remainders:Additional Information

43. ME v. TEXTBOOK (P523) • The Textbook says the Common Law rule that a Life Estate was the default estate did not apply to grants in wills. • For our purposes, assume that, at Common Law, a Life Estate was the default estate under all circumstances.

44. Alternative Contingent Remainders Two contingent remainders where the event that causes one to vest will destroy the other.

45. Alternative Contingent Remainders Two contingent remainders where the event that causes one to vest will destroy the other. Example: Jordan grants: “To Kevin for life, then to Katherine and her heirs if she graduates from law school, but if she never graduates from law school, then to Sofia and her heirs”.

46. Alternative Contingent Remainders Two contingent remainders for which the event that causes one to vest will destroy the other. Example: To Kevin for life, then to Katherine and her heirs if she graduates from law school, but if she never graduates from law school, then to Sofia and her heirs. Here, only two possibilities: either (1) Katherine will graduate from law school (and would then take) or (2) she will die before graduating from law school (Sofia would then take)

47. Alternative Contingent Remainders Two contingent remainders for which the event that causes one to vest will destroy the other. Example: • Example: Jordan: “To Kevin for life, then to Katherine and her heirs if she graduates from law school, but if she never graduates from law school, then to Sofia and her heirs.” • Note: Even though the alternative contingent remainders might appear to exhaust all possibilities, the convention is that you still must pencil in a reversion in the grantor to fill up the time line. Thus, • Kevin has Life Estate • Katherine & Sofia each have an Alternate Contingent Remainder (in F.S.) • Jordan retains a Reversion

48. Vested Remainder Subject to Divestment • Vested Remainder followed by an Executory Interest that could cut it off before it becomes possessory. • Same as what textbook calls “Vested Remainder Subject to Complete Defeasance”(P596)

49. Contingent Remainder (1) v. Vested Remainder Subject to Divestment (2) (1) To A for life, then to B & her heirs if she turns 21, but if B dies before 21, then to C and his heirs. Reversion in O. (2) To A for life, then to B & her heirs, but if B dies before 21, then to C & his heirs. (No Reversion in O)

50. EXAM TIP: COMMON MISTAKES Contingent Remainder Subject to Open Contingent Remainder Subject to Divestment Executory Interest Subject to Divestment