shell estates and futures

8/3/2019 Shell Estates and Futures

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POSSESORY ESTATES

What are the two types of estates?

Know difference possessory estate gives the holder the right to immediate

possession and future interestdoes not entitle theowner to present possession, butwillor maybecome a possessory estate in the future. (remainders)

(1)Freehold estate (2) leasehold estate(1)Freehold estate

The term Freehold derives from the land that was free from control of lords who

had originally owned in England. The landowners who received land from the lords

eventually came to hold it free from the lords control. Today, a freehold estate

means right to land that are not a part of lease.

(2)Leasehold estateIts exactly what it sounds like, a lease in land. It is also referred to as a nonfreehold

estate. Theres nothing earth-shattering about this concept.

Diagram:

ESTATES

LEASEHOLD FREEHOLD

What are the types of freehold estates?

(1)Fee Simple(2)Life Estate(3)Fee tail

ESTATES

LEASEHOLD FREEHOLD

FEE SIMPLE LIFE ESTATE FEE TAIL


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Ex/ I conveys Blackacre to A and the heirs of the body of A.

A holds a fee tail. A cannot sell Blackacre because it must pass to As children, and

their children, and their children, until finally there are no more children for it to

pass on to, at which point O (or Os descendants) gets it back.

What are the types of Fee simple?

The fee simple has four further sub categories:

Fee simple absolute Fee simple determinable Fee simple subject to condition subsequent Fee simple subject to executory limitation

ESTATES

LEASEHOLD FREEHOLD


ABSOLUTE DETERMINABLE S.T. CONDITION SUB. S.T. EXECUTORY

LIMITATION

(1)Fee Simple AbsoluteThe FSA has no qualification or restriction on the estate.

A landowner who holds land in FSA may do anything the landowner sodesires with the land (including transferring it by sale or by will)

If the landowner does not transfer the land by will or otherwise before thelandowner dies, the land will pass to the landowners heirs at the

landowners death.

Language:

To Ao ex/ O gives Blackacre To A. A holds a fee simple absolute.


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To A and hisheirs o ex/ O gives Blackacre To A and his heirs.o the phrase does not mean that As heirs hold any rights in the land

before A dies. A could transfer the land to a third party and the heirs

would simply be out of luck.

To A in fee simpleo ex/ O gives Blackacre To A in fee simple.

(2)Fee Simple DeterminableWhere a fee simple has a duration placed on it that may cut short the fee simple

in favor of the grantor, and where that fee simple automaticallyreverts back to

the grantor, the fee simple is determinable.

Ex/ O gives Blackacre to A so long as A remains a student, then if A does not

remain a student As interest is cut short, and Backacre goes back to O, who

granted Blackacre to A in the first place.

O has a fee simple determinable.

Think of it like this: the grantor, is determinedto get the land back even though

she gave it to A, the grantee. O makes it so that something happens (or doesnt

happen) in the future, the land will automaticallygo back to her. This is a fee

simple determinable.

Language:

O gives Blackacre to A while A is working for B O gives Blackacre to A duringAs employment with B O gives Blackacre to A untilA stops working for B O gives Blackacre to Aso long as A brushes his teeth every morning

o If A fails to brush his teeth, Blackacre goes back to O(3)Fee Simple Subject to Condition SubsequentWhere a fee simple has a condition placed on it that may occur in the future, and

where the grantor is given the power to re-take the estate (if the grantor so

chooses), the fee simple is subject to condition subsequent.

Language:

Provided that On the condition that If


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But if Provided, however

Ex/ O gives Blackacre to A, but ifA does not remain a student, then O may re-enter

This means that if A does not remain a student, O may choose to retake Blackacre ifshe so desires; it is not automatic that O will get Blackacre back. O has given A a fee

simple subject to condition subsequent.

Ex/ O gives Blackacre to A, provided, however that A brushes his teeth every

evening.

This means that if A fails to brush his teeth, O may reenter and take Blackacre back if

O so chooses. NOTE, grantee need not specify tha the grantee mayre-enter at her

discretion.

(4)Fee Simple subject to Executory LimitationWhere a fee simple has a condition or duration placed on it that favors a new grantee

rather than the grantor) such that the new grantee automatically takes the fee

simple on the occurrence of the condition or duration, the fee simple is subject to

executory limitation.

Ex/ O gives to A, but if A does not remain a student, then to C.

This means that if A does not remain a student, Blackacre automatically goes to C. A

holds a fee simple subject to executory limitation.

Ex/ O gives Blackacre to A as long as A remains a student, then to C.

This means that if A does not remain a student, Blackacre automatically goes to C. A

holds a fee simple subject to execuatory limitation.

So here is the overall diagram:


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ESTATES

LEASEHOLD FREEHOLD


ABSOLUTE DETERMINABLE S.T. CONDITION SUB. S.T. EXECUTORY

LIMITATION

So long as Provided that

As long as on condition

While if

During but if

Until provided, however

FUTURE INTERESTS

In general, there are two major rules

1. pay careful attention to the exact languageused in the grant2. read and analyze the interests in a grantin sequence

Here is the framework:

1. classify the present estate2. look at who has the future interest; if its the GRANTOR, 3 choices3. think about how the future interests will become possessory4. determine whether the interest is vested or contingent;

a. apply the following rules to contingent interesti. destructibility of contingent remainders

ii. the rule of Shelleys Caseiii. the Doctrine of Worthier Titleiv. the Rule Against Perpetuities

What are future interests?

A nonpossessory interest capable of becoming possessory in the future. A future

interest is apresentinterest, but it is not a presently possessory interest.


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What are the categories?

Reversion Possibility of reverter Right of reentry Remainder (contingent or vested) Executory interest.

Future interests in the GRANTOR (reversion, POR, ROR):

Reversion- future interest left in the grantor after the grantor conveys avested estate of a lesser quantum than he has.

o IF GRANTOR CONVEYS LESSER ESTATE THAN WHAT HE HAS,RETAINS A REVERSION.

o Reversions are vested, fully alienable. Possibility of reverter- when a grantor creates a determinable estate.

o FROM A DETERMINABLE ESTATEo Freely alienable, vested interest

Right of reentry- when grantor creates a FSCS.o FROM ESTATE SUBJECT TO CONDITION SUBSEQUENTo Alienable, in other jurisdictions, inalienable. Inheritable.

Future interests in the GRANTEE:

Remainder- future interest in grantee w/ capacity of becoming possessoryat the expiration of prior estates, cannot divest prior estates

o CABABLE OF BECOMING A PRESENT POSSESSORY ESTATE UPONTHE EXPIRATION OF A PRIOR ESTATE CREATED IN THE SAME

CONVEYANCE IN WHICH THE REMAINDER IS CREATED.

Must have preceding estate from the same instrument Must follow a fee tail , life estate, or terms of years. Must be capable of becoming possessory on natural

termination of preceding estate.

No reminader after FSA.o Classification of remainders

Contingent-remainder that is either created in anunascertained person or subject to a condition precedent

Ex/ unborn children to A for life, then to As children. A has no children, contingent b/c not ascertained at

time of conveyance.

Ex/ hiers- to A for life, then to Bs heirs.


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B is alive. Since no one is an heir of the living, takers arenot ascertained.

Vested- in an ascertained person and not subject to a conditionprecedent. Have the right to immediate possession, whenever

and however the preceding freehold estates may determine. Sub classifications of vested remainders: Indefeasibly vested- certain to acquire Vested subject to open- a class of persons

o Class gifts- either open or closedo Class closing rule- rule of convenience- closes

whenever any member can demand possession.

Vested subject to complete divestment

Executory interests- must divest or cut short prior estate, or spring out ofgrantor at a future date.

o Shifting executory interest- to A and his heirs, but if B returns fromRome, to B and her heirs. A has a FS subject to executory limitation; B

has shifting executory interest.

o Springing executory interest- to my daughter A when she marries B.O retains FS and creates an executory interest in A to spring out of O

when A marries B.

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