Possessory Estates & Future Interests

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newyorker69
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Possessory Estates & Future Interests

Postby newyorker69 » Tue Mar 16, 2010 1:27 am

Ok, quick question on the below estate.. anyone have an idea??


O -> to A for life then to B if B graduates from law school, otherwise to C


A = life estate
B = contingent remainder in fee simple
C = alternate contingent remainder in fee simple
O = reversion in fee simple

----------
Now, my professor states "if A dies before B graduates from law school"

Common law: I understand that under the common law destructibility of contingent remainders, if the contingent remainder does not vest before the preceding finite estate ends, the contingent remainder is destroyed as a matter of law (in this case both the contingent remainder and the alternate contingent remainder)

Modern law: However, what happens under the modern law???

Bankhead
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Re: Possessory Estates & Future Interests

Postby Bankhead » Tue Mar 16, 2010 1:52 am

The property will simply shift to B, when, and if, B graduates from law school. This is because under modern law (in most jurisdictions) contingent remainders are indestructible.

newyorker69
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Re: Possessory Estates & Future Interests

Postby newyorker69 » Tue Mar 16, 2010 2:05 am

OK so what does O have? A reversion in fee simple subject to an executory limitation? and B a springing executory interest?

What about C though? Doesnt he have some sort of future interest that will vest if B dies without ever going to law school?

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24secure
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Re: Possessory Estates & Future Interests

Postby 24secure » Tue Mar 16, 2010 1:53 pm

Doesn't B's interest violate the Rule of Perpetuities, because his interest will not necessarily vest 21 years after A'd death?

spondee
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Re: Possessory Estates & Future Interests

Postby spondee » Tue Mar 16, 2010 2:56 pm

24secure wrote:Doesn't B's interest violate the Rule of Perpetuities, because his interest will not necessarily vest 21 years after A'd death?


This is what I thought. So A has a life estate; C has a vested remainder; B's got zilch.

270910
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Re: Possessory Estates & Future Interests

Postby 270910 » Tue Mar 16, 2010 3:50 pm

spondee wrote:
24secure wrote:Doesn't B's interest violate the Rule of Perpetuities, because his interest will not necessarily vest 21 years after A'd death?


This is what I thought. So A has a life estate; C has a vested remainder; B's got zilch.


If at the time of the grant B is alive then B is a life in being so it's not a problem at all. B will either die or obtain a graduate degree within 21 years of B's death :P

I'm not too sharp on the rest of it, so I won't wade into the discussion about destructibility and interests, but a lot the above analysis looks off.

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24secure
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Re: Possessory Estates & Future Interests

Postby 24secure » Tue Mar 16, 2010 4:27 pm

Oh yeah. I forgot B was a life in being. Silly me.

solidsnake
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Re: Possessory Estates & Future Interests

Postby solidsnake » Wed Mar 17, 2010 1:24 am

newyorker69 wrote:Ok, quick question on the below estate.. anyone have an idea??


O -> to A for life then to B if B graduates from law school, otherwise to C


A = life estate
B = contingent remainder in fee simple
C = alternate contingent remainder in fee simple
O = reversion in fee simple

----------
Now, my professor states "if A dies before B graduates from law school"



If destructibility of contingent remainder jurisdiction:
1. remainder in B is destroyed because the supporting estate (A's life estate) naturally terminated (by A's death) before the condition precedent (B graduating law school) was satisfied.
2. remainder in C is not destroyed because condition precedent to C's vesting in interest is B not graduating law school. When A died, B had not graduated law school so C's estate not only vested in interest, but vested in possession because C was ready to take at the moment A died, now that B's remainder was destroyed as a matter of law (destructibility of contingent remainder jurisdiction).
3. Because B's interest was destroyed, C now has a fee simple absolute.

If indestructible contingent remainder jurisdiction:
1. Future interest vests in C because at the time A died, the condition precedent (B not graduating law school) was met.
2. Because B's interest is not destroyed, B can still divest C of his now possessory interest once B graduates law school.
3. B's contingent remainder is therefore transformed into an executory interest because it is divesting the prior estate (C's possessory interest) and is following C's defeasible fee simple.
4. C's interest is *once A dies before B graduates law school (in an indestructible contingent remainder jurisdiction) * is a fee simple subject to executory limitation.

Dman
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Re: Possessory Estates & Future Interests

Postby Dman » Wed Mar 17, 2010 1:31 am

solidsnake wrote:
newyorker69 wrote:Ok, quick question on the below estate.. anyone have an idea??


O -> to A for life then to B if B graduates from law school, otherwise to C


A = life estate
B = contingent remainder in fee simple
C = alternate contingent remainder in fee simple
O = reversion in fee simple

----------
Now, my professor states "if A dies before B graduates from law school"



If destructibility of contingent remainder jurisdiction:
1. remainder in B is destroyed because the supporting estate (A's life estate) naturally terminated (by A's death) before the condition precedent (B graduating law school) was satisfied.
2. remainder in C is not destroyed because condition precedent to C's vesting in interest is B not graduating law school. When A died, B had not graduated law school so C's estate not only vested in interest, but vested in possession because C was ready to take at the moment A died, now that B's remainder was destroyed as a matter of law (destructibility of contingent remainder jurisdiction).
3. Because B's interest was destroyed, C now has a fee simple absolute.

If indestructible contingent remainder jurisdiction:
1. Future interest vests in C because at the time A died, the condition precedent (B not graduating law school) was met.
2. Because B's interest is not destroyed, B can still divest C of his now possessory interest once B graduates law school.
3. B's contingent remainder is therefore transformed into an executory interest because it is divesting the prior estate (C's possessory interest) and is following C's defeasible fee simple.
4. C's interest is *once A dies before B graduates law school (in an indestructible contingent remainder jurisdiction) * is a fee simple subject to executory limitation.


This is spot on, one additional note is with contingent remainders, O always maintains a reversion even if logically it has no way back to him/her (as with alternating contingent remainders).

270910
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Re: Possessory Estates & Future Interests

Postby 270910 » Wed Mar 17, 2010 5:44 am

Dman wrote:
solidsnake wrote:
newyorker69 wrote:Ok, quick question on the below estate.. anyone have an idea??


O -> to A for life then to B if B graduates from law school, otherwise to C


A = life estate
B = contingent remainder in fee simple
C = alternate contingent remainder in fee simple
O = reversion in fee simple

----------
Now, my professor states "if A dies before B graduates from law school"



If destructibility of contingent remainder jurisdiction:
1. remainder in B is destroyed because the supporting estate (A's life estate) naturally terminated (by A's death) before the condition precedent (B graduating law school) was satisfied.
2. remainder in C is not destroyed because condition precedent to C's vesting in interest is B not graduating law school. When A died, B had not graduated law school so C's estate not only vested in interest, but vested in possession because C was ready to take at the moment A died, now that B's remainder was destroyed as a matter of law (destructibility of contingent remainder jurisdiction).
3. Because B's interest was destroyed, C now has a fee simple absolute.

If indestructible contingent remainder jurisdiction:
1. Future interest vests in C because at the time A died, the condition precedent (B not graduating law school) was met.
2. Because B's interest is not destroyed, B can still divest C of his now possessory interest once B graduates law school.
3. B's contingent remainder is therefore transformed into an executory interest because it is divesting the prior estate (C's possessory interest) and is following C's defeasible fee simple.
4. C's interest is *once A dies before B graduates law school (in an indestructible contingent remainder jurisdiction) * is a fee simple subject to executory limitation.


This is spot on, one additional note is with contingent remainders, O always maintains a reversion even if logically it has no way back to him/her (as with alternating contingent remainders).


Agree with dman re: O's reversion even though it's hard (impossible?) to imagine it coming to pass.

I really don't get why B would maintain an interest w/o destructibility though. It's not worded in a way that makes it look like it is ever intended to vest later. I read the term 'otherwise' as implying the condition on B's interest being only checked at A's death. It's possible I'm just misunderstanding destructibility or the lack thereof, but it makes even less sense then future interests usually make (which is very little) to interpret language that way. It would basically be holding "If X, do Y, otherwise Z" to mean "if X, do Y, otherwise Z, and keep checking for X, and if it happens, undo Z and do Y instead".

But maybe I'm way off base. I haven't studied this stuff carefully at all yet.

solidsnake
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Re: Possessory Estates & Future Interests

Postby solidsnake » Wed Mar 17, 2010 11:57 am

disco_barred wrote:
Dman wrote:
solidsnake wrote:
newyorker69 wrote:Ok, quick question on the below estate.. anyone have an idea??


O -> to A for life then to B if B graduates from law school, otherwise to C


A = life estate
B = contingent remainder in fee simple
C = alternate contingent remainder in fee simple
O = reversion in fee simple

----------
Now, my professor states "if A dies before B graduates from law school"



If destructibility of contingent remainder jurisdiction:
1. remainder in B is destroyed because the supporting estate (A's life estate) naturally terminated (by A's death) before the condition precedent (B graduating law school) was satisfied.
2. remainder in C is not destroyed because condition precedent to C's vesting in interest is B not graduating law school. When A died, B had not graduated law school so C's estate not only vested in interest, but vested in possession because C was ready to take at the moment A died, now that B's remainder was destroyed as a matter of law (destructibility of contingent remainder jurisdiction).
3. Because B's interest was destroyed, C now has a fee simple absolute.

If indestructible contingent remainder jurisdiction:
1. Future interest vests in C because at the time A died, the condition precedent (B not graduating law school) was met.
2. Because B's interest is not destroyed, B can still divest C of his now possessory interest once B graduates law school.
3. B's contingent remainder is therefore transformed into an executory interest because it is divesting the prior estate (C's possessory interest) and is following C's defeasible fee simple.
4. C's interest is *once A dies before B graduates law school (in an indestructible contingent remainder jurisdiction) * is a fee simple subject to executory limitation.


This is spot on, one additional note is with contingent remainders, O always maintains a reversion even if logically it has no way back to him/her (as with alternating contingent remainders).


Agree with dman re: O's reversion even though it's hard (impossible?) to imagine it coming to pass.

I really don't get why B would maintain an interest w/o destructibility though. It's not worded in a way that makes it look like it is ever intended to vest later. I read the term 'otherwise' as implying the condition on B's interest being only checked at A's death. It's possible I'm just misunderstanding destructibility or the lack thereof, but it makes even less sense then future interests usually make (which is very little) to interpret language that way. It would basically be holding "If X, do Y, otherwise Z" to mean "if X, do Y, otherwise Z, and keep checking for X, and if it happens, undo Z and do Y instead".

But maybe I'm way off base. I haven't studied this stuff carefully at all yet.


You're off base. Don't help people with legal analysis if you "haven't studied this stuff carefully at all yet."

And while O retains a reversion at the time of the conveyance (where B and C had only alternate contingent remainders in fee) because the only vested interest (A's life estate) that was transferred is smaller than O's original interest (a fee simple absolute), O loses that reversionary interest under both regimes when A dies before B graduates law school because C's contingent remainder in fee then vests; whether C's fee is now subject to an executory limitation depends on which rule the jurisdiction applies, as noted in the analysis above.

270910
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Re: Possessory Estates & Future Interests

Postby 270910 » Wed Mar 17, 2010 3:05 pm

solidsnake wrote:You're off base. Don't help people with legal analysis if you "haven't studied this stuff carefully at all yet."


:roll:

I still don't think B ever has an executory interest over C given that language. If anything A dying before B graduates in an indestructible jurisdiction would revert to O and wait to see if B graduates from law school or not.




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