Estates Overview Class 7 Past Paper PDF

Estates Introduction and Overview Thursday February 8, 2024 Property Law w/ Prof. Snape Class #7 (Aqua) Wooo Hooo Remember: “Magic Words” Interests Present Interests Fee Simple Fee Tail Life Estate Leaseholds Fee Simple Determinable (FSD) Fee Simple Subject to a Condition Subsequent Fee Simple Subje...

Estates Introduction and Overview Thursday February 8, 2024 Property Law w/ Prof. Snape Class #7 (Aqua) Wooo Hooo Remember: “Magic Words” Interests Present Interests Fee Simple Fee Tail Life Estate Leaseholds Fee Simple Determinable (FSD) Fee Simple Subject to a Condition Subsequent Fee Simple Subject to an Executory Limitation Future Interests Interests retained by the transferor: (a) Reversion (b) Possibility of Reverter – Corresponds to FSD (c) Right of Entry – Corresponds to FSSCS Interests created in a transferee: (a) Vested Remainder (b) Contingent Remainder (c) Executory Interest (springing or shifting) Estates Chart (will be attached to final exam) Fee Simple Development Fee became (1st) Heritable, then (2nd) Alienable – Limitations on heritability not allowed (other than fee tail); those that purport to do so simply are fee simple “As close to absolute ownership as our law recognizes” Numerus clausus principle – prohibition of new or customized interests (protects property categories) “may endure forever.” Words of Creation (purchase and limitation) Initially required words showing the land was heritable to be fee simple: “to A and his heirs” Now no longer need words of heritability to convey fee simple: “to A” sufficient Fee Tail Development Originally, allowed tenant in possession to alienate his/her interest, but not to affect rights of his/her issue to succeed to the land upon his/her death. Could “Bar the entail” by a common recovery lawsuit, obtaining fee simple ownership & control Words of Creation “to A and the heirs of his body.” Currently in US Exists only four states: Delaware, Maine, Massachusetts, and Rhode Island Now can disentail simply by conveying a fee simple by deed to another. Cannot bar the entail by will. Note grantor retains a reversion if there are no heirs (and no remainders in conveyance) Effect of State Fee Tail Abolition on Fee Tail Conveyances Option 1 States Conveyance “to A and the heirs of his body” with a gift over to B treated as a fee simple conveyance to A. Option 1 state statutes automatically disentail (doing what A could do simply by selling in fee simple) Option 2 States Conveyance “to A and the heirs of his body” with a gift over to B treated as fee simple to A but B takes in fee simple at A’s death if at A’s death, A leaves no surviving issue. If there are surviving issue, A can devise to anyone. Note, less alienable for A. Life Estate Development Allowed grantor to control who took takes the property at death of life tenant. Supplanted fee tail as device to control inheritance. Can be in a trust form (allows flexibility with regard to the assets) managed by a trustee (often a bank) – Hundreds of billions of $ benefit life tenants – For entertainment, see: http://www.urbandictionary.com/define.php?term=trust+fund+baby Always followed by a future interest: reversion in transferor or remainder in a transferee. Reversion in O remains possible during lifespan of life tenant – doctrine of waste. Words of Creation “to A for life.” If A transfers his life estate to B, B has a life estate pur autre vie (estate measured by the life of another) Definitions Heirs: persons who survive the decedent and are designated as intestate successors under state’s statute of descent. – a living person has no heirs (until death) Issue: descendants, children and further descendants Ancestors: parents Collaterals: blood relations who are neither descendants nor ancestors (brothers, sisters, rich uncles, cousins, etc…) Escheat: overlord or state, today the state gets in absence of heirs Distribution Class ordering: 1. Issue – Per stirpes (“by the stocks”): grandchildren who survive their parents get according to rights of their parents – Children born out of wedlock get from mother and from father if paternity acknowledged or proved 2. Parents 3. Collaterals 4. State (Escheat) Problems (present day!), page 274 1) 2) 3) O to A for life, then to B forever. A has life estate and B has vested fee simple remainder. O to A for life, remainder to heirs of B. B alive at conveyance but dies shortly thereafter intestate with one heir C. A dies. C has fee simple (at time of conveyance, C had a contingent remainder) O to A and her heirs. A’s only child B is bad with money. A and B both alive. Can B’s creditors reach property? Can B prevent A taking out mortgage to buy fancy car? No, B has no property interest, but a “mere expectancy” or “hope of inheritance” because of the meaning of words of limitation here. Problems, page 275 1) 2) 3) O has two children A (d) and B (s). B dies and devises all to W, with three children B1-B3. A1 born to A. O dies intestate after B dies. A gets ½ and B1, B2, B3 get ½ x 1/3 each from O. Different result if B was alive. Note B will and timing (and modern elective shares, p. 446). O to A and her heirs. A dies intestate without issue. First question is “heirs”? If not, conveyances of fee simple do not create reversion; answer is escheat. O to A for life, remainder to B and her heirs. B dies intestate with no heirs. A then dies. B has vested remainder in fee simple. State has remainder interest at B’s death and then possessory fee simple at A’s death. Review on FSD vs. FSSCS -- and why it matters -- alienability, statute of limitations, rights of holders, presumptions, and magic words. Answer: It can be a nuanced distinction. The fee simple determinable is created by “durational” language such as “so long as” or “during” or “while” … so the fee simple continues so long as a condition remains (or doesn’t happen). The fee simple subject to a condition subsequent provides the fee simple will be subject to divestment if an “event’ occurs pursuant to language such as “on that condition that” or “but if.” If it is a close call, most courts will find it a FSSCS. And, remember, the holder of a FSD automatically loses the property when the condition happens whereas with the FSSCS, the right of entry must be elected. Note different inter vivos and devise limitations on FSSCS and FSD in some jurisdictions – p.301 Question: Professor Snape: In working through the examples, I am having a hard time distinguishing between a fee simple determinable and a fee simple subject to a condition subsequent when examining a hypothetical instrument. I understand that different rights attach to the grantor if a condition is not met, but it seems to me that unless the instrument specifies the right (of possibility of reverter or of entry), one could not tell whether the estate was a fee simple determinable or a fee simple subject to a condition subsequent. Is there a way to tell, absent specificity regarding the right retained by the grantor, from the instrument on its face? I understand the policy reasons behind why a court would also prefer an FSSCS, rather than an FSD, as well - just wondering if there is something else I am missing? Quick review on Fee Simple Subject to Executory Limitation Definition: fee simple, upon the happening of a stated event, is automatically divested by an executory interest in a transferee Process: Tracks a FSD/FSSCS in its creation, but a transferee rather than the transferor has the future interest (with regard to “shifting” executory interests). Problem 3, page 302 O to A and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if such is sold on premises, O retains right to re-enter. A opens restaurant for food with certain wine sauces and Sunday morning free champagne. A now wants to sell to B who wants to open a bar. Answer(s): a) fee simple determinable or FSSCS? b) factual issue of “sale” c) laches/SOL d) B has potential serious problem Problem 4, page 302 O to A who promises (covenants) on behalf of himself, his heirs and assigns that Blackacre will only be used for residential purposes. A assigns to B who sublets to C who erects a slaughterhouse. O cannot seek possession; may seek only injunction and/or damages. B likely primarily liable (privity of estate and contract), though C also maybe liable to B. A may be liable to O (or B) through privity of contract. Problem, page 319 H devises GA to W for her use and benefit so long as she remains unmarried. H devises the residue to D. W does not remarry but moves in with boyfriend A. W dies devising all to A. Public policy restraint? Letter or spirit of condition? Who gets land if condition is found to be violated? Fee simple determinable or life estate determinable? Majority view: A likely gets property. Better legal drafting!