Contingent Remainder vs. Executory Interest

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Matix
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Contingent Remainder vs. Executory Interest

Postby Matix » Fri Oct 15, 2010 3:58 pm

Can someone please explain the difference between a contingent remainder and an executory interest? They look the same to me pretty frequently.

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philosoraptor
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Re: Contingent Remainder vs. Executory Interest

Postby philosoraptor » Fri Oct 15, 2010 4:25 pm

An executory interest can cut off the estate before its "natural" termination (infinity for a fee simple, death of life tenant for a life estate), but a remainder becomes a possessory interest only at the natural termination of an estate. The remainder is contingent if the remaindermen are unborn or unascertained or if the remainder is subject to a condition precedent.

Examples:
Contingent remainder: To A for life, then, if B survives A, to B. (B's contingent remainder becomes possessory if he meets the condition precedent at the natural termination of A's life estate.)
Executory interest: To A for life so long as she remains unmarried; if she marries, to B. (B has an executory interest because A's getting married would end A's interest before the natural termination of the life estate.)

Does that help?

Matix
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Re: Contingent Remainder vs. Executory Interest

Postby Matix » Fri Oct 15, 2010 5:05 pm

Yeah, that helps a lot! Thanks for the thoughtful and clear explanation.

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traehekat
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Re: Contingent Remainder vs. Executory Interest

Postby traehekat » Fri Oct 15, 2010 6:48 pm

I was wondering the same thing, thanks for the answer philosorapter.

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Merr
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Re: Contingent Remainder vs. Executory Interest

Postby Merr » Fri Oct 15, 2010 8:52 pm

I was also wondering about this. Thanks.

Kobe_Teeth
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Re: Contingent Remainder vs. Executory Interest

Postby Kobe_Teeth » Fri Oct 15, 2010 10:06 pm

My Property book explains it sorta humorously. It says that "remainders wait politely" for the previous estate to end. That phrase has helped me remember how the two function and when they become possessory.

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blurbz
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Re: Contingent Remainder vs. Executory Interest

Postby blurbz » Fri Oct 15, 2010 10:09 pm

ha, mine says "patiently"...but same thing. I enjoyed it.

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zanda
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Re: Contingent Remainder vs. Executory Interest

Postby zanda » Tue Dec 14, 2010 5:31 pm

What if something says

"To A for life, but when/if B turns 20, to A and B as joint tenants w/ right to survivorship."

Assuming a jurisdiction that still has JT.

A has a life estate.

Does B have a valid executory interest as JT? In which case A has a life estate subject to executory limitation AND an executory interest as JT?

I'm confused because life estates are generally defeasible, but I don't know if is "defeasing" since it has no relation to the conduct of the current possessor (and thus labeling it an executory limitation would be odd).

de5igual
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Re: Contingent Remainder vs. Executory Interest

Postby de5igual » Tue Dec 14, 2010 11:23 pm

zanda wrote:What if something says

"To A for life, but when/if B turns 20, to A and B as joint tenants w/ right to survivorship."

Assuming a jurisdiction that still has JT.

A has a life estate.

Does B have a valid executory interest as JT? In which case A has a life estate subject to executory limitation AND an executory interest as JT?

I'm confused because life estates are generally defeasible, but I don't know if is "defeasing" since it has no relation to the conduct of the current possessor (and thus labeling it an executory limitation would be odd).


A&B's interest isn't an executory interest since it doesn't cut short a natural life. It's a remainder (if valid...which I'm not sure it is since in order to have a JT, the 4 unities must be met).

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GeePee
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Re: Contingent Remainder vs. Executory Interest

Postby GeePee » Tue Dec 14, 2010 11:33 pm

f0bolous wrote:
zanda wrote:What if something says

"To A for life, but when/if B turns 20, to A and B as joint tenants w/ right to survivorship."

Assuming a jurisdiction that still has JT.

A has a life estate.

Does B have a valid executory interest as JT? In which case A has a life estate subject to executory limitation AND an executory interest as JT?

I'm confused because life estates are generally defeasible, but I don't know if is "defeasing" since it has no relation to the conduct of the current possessor (and thus labeling it an executory limitation would be odd).


A&B's interest isn't an executory interest since it doesn't cut short a natural life. It's a remainder (if valid...which I'm not sure it is since in order to have a JT, the 4 unities must be met).

Sure it is, it cuts short A's life estate. Then, A&B begin a joint tenancy on the land, which adds up to a fee simple.

Therefore, A has both a life estate and an executory interest, and B has only an executory interest.

O retains a reversion if B does not reach 20.

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zanda
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Re: Contingent Remainder vs. Executory Interest

Postby zanda » Wed Dec 15, 2010 10:36 am

So Gee Pee's post was my impression, while f0bolous's post expresses my hesitation.

Tie breaker?

de5igual
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Re: Contingent Remainder vs. Executory Interest

Postby de5igual » Wed Dec 15, 2010 12:31 pm

GeePee wrote:
f0bolous wrote:
zanda wrote:What if something says

"To A for life, but when/if B turns 20, to A and B as joint tenants w/ right to survivorship."

Assuming a jurisdiction that still has JT.

A has a life estate.

Does B have a valid executory interest as JT? In which case A has a life estate subject to executory limitation AND an executory interest as JT?

I'm confused because life estates are generally defeasible, but I don't know if is "defeasing" since it has no relation to the conduct of the current possessor (and thus labeling it an executory limitation would be odd).


A&B's interest isn't an executory interest since it doesn't cut short a natural life. It's a remainder (if valid...which I'm not sure it is since in order to have a JT, the 4 unities must be met).

Sure it is, it cuts short A's life estate. Then, A&B begin a joint tenancy on the land, which adds up to a fee simple.

Therefore, A has both a life estate and an executory interest, and B has only an executory interest.

O retains a reversion if B does not reach 20.


yeah you're right...didn't notice the "when/if B reaches 20" part

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YourCaptain
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Re: Contingent Remainder vs. Executory Interest

Postby YourCaptain » Mon Mar 28, 2011 10:36 pm

Bumping oldddd thread because of relevant question.

"To A for life, then to B, but if B ever stops working at ACME hardware, then to C"

Vested Subject to Complete Divestment? (example of this given by my prof)

Why not Subject to Executory Limitation? C can cut off B's interest, and it might never vest if B doesn't survive A.

dakatz
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Re: Contingent Remainder vs. Executory Interest

Postby dakatz » Mon Mar 28, 2011 10:47 pm

YourCaptain wrote:Bumping oldddd thread because of relevant question.

"To A for life, then to B, but if B ever stops working at ACME hardware, then to C"

Vested Subject to Complete Divestment? (example of this given by my prof)

Why not Subject to Executory Limitation? C can cut off B's interest, and it might never vest if B doesn't survive A.


In a grant, whenever it says "to B", or to any person for that matter, my professor said that you assume that means "to B and his heirs". Thus, it will go to B (or B's heirs) eventually no matter what. I don't use the same terminology as you since we only learned a limited number of categories. I will tell you what those are before I start, as to not cause any confusion. The only third party interests we learned are vested remainders (with the only subcategory being vested remainders subject to open), contingent remainders, and executory interests.

You said that C can cut off B's interest, but that isn't really the case based on the structure of the grant. "But if B ever stops working at ACME hardware" is a defeasibility condition of B's grant. It is NOT something that C can activate or has any control over. There is no way for C to "snatch away" what B has. B must do that himself. But, while C's interest doesn't divest, it follows a fee simple (again, assuming that "to B" means "to B and his heirs"). Thus, it must be an executory interest. So I would call B's interest a vested remainder subject to executory interest. Not sure if my terminology is the same.

I find it very odd that your professor would call that a divestment. Though the reading I did, and what my professor said, we constantly noted the difference between defeasibility conditions and acts that divest since they can be confused. This would seem to be a patent example.

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Re: Contingent Remainder vs. Executory Interest

Postby keg411 » Mon Mar 28, 2011 11:04 pm

I would say "vested subject to complete divestment" because the interest can be divested prior to becoming possessory.

When it's an executory limitation, the interest is possessory on the grant.
Example of EL would be O --> A; however, if A is not a student, then to B

dakatz
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Re: Contingent Remainder vs. Executory Interest

Postby dakatz » Mon Mar 28, 2011 11:05 pm

keg411 wrote:I would say "vested subject to complete divestment" because the interest can be divested prior to becoming possessory.

When it's an executory limitation, the interest is possessory on the grant.
Example of EL would be O --> A; however, if A is not a student, then to B


I still don't see how it can divest. What can C do to "snatch away" the interest? Get a job at ACME so that he can fire B? Divest doesn't mean to end early; it means to strip away and it must be an action of the one who is doing the stripping away, so I don't see the divestiture here.
Last edited by dakatz on Mon Mar 28, 2011 11:09 pm, edited 1 time in total.

keg411
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Re: Contingent Remainder vs. Executory Interest

Postby keg411 » Mon Mar 28, 2011 11:08 pm

dakatz wrote:
keg411 wrote:I would say "vested subject to complete divestment" because the interest can be divested prior to becoming possessory.

When it's an executory limitation, the interest is possessory on the grant.
Example of EL would be O --> A; however, if A is not a student, then to B


I still don't see how it can divest. What can C do to "snatch away" the interest?


You are being too literal with the "snatch away". Think of it more as the interest is cut off by some act. C gets the interest if B stops working at ACME hardware; so C's interest "cuts off" B's as B's would last so long as he works at ACME hardware. C doesn't actually have to do something to cut off (or divest) B's interest.

dakatz
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Re: Contingent Remainder vs. Executory Interest

Postby dakatz » Mon Mar 28, 2011 11:10 pm

keg411 wrote:
dakatz wrote:
keg411 wrote:I would say "vested subject to complete divestment" because the interest can be divested prior to becoming possessory.

When it's an executory limitation, the interest is possessory on the grant.
Example of EL would be O --> A; however, if A is not a student, then to B


I still don't see how it can divest. What can C do to "snatch away" the interest?


You are being too literal with the "snatch away". Think of it more as the interest is cut off by some act. C gets the interest if B stops working at ACME hardware; so C's interest "cuts off" B's as B's would last so long as he works at ACME hardware. C doesn't actually have to do something to cut off (or divest) B's interest.


A hornbook on this specifically said to look out for situations like this and to note the distinction between what actually divests, and what is just a defeasibility condition of the prior person's interest. If what you say is true, then there would be no such thing as a defeasibility condition between any party B and party C but we know that isn't the case.

keg411
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Re: Contingent Remainder vs. Executory Interest

Postby keg411 » Mon Mar 28, 2011 11:14 pm

I was looking at my notes from my professor on the distinction between EL's and VR's subject to divestment. I don't read hornbooks; maybe the hornbook is confusing or off somehow?

From what I have the interest has to become possessory immediately in the first clause for what follows it to be an exectory limitation. In the scenario in this post, the interest has yet to become possessory, so it's "subject to complete divestment" since it may NEVER become possessory.

dakatz
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Re: Contingent Remainder vs. Executory Interest

Postby dakatz » Mon Mar 28, 2011 11:22 pm

keg411 wrote:I was looking at my notes from my professor on the distinction between EL's and VR's subject to divestment. I don't read hornbooks; maybe the hornbook is confusing or off somehow?

From what I have the interest has to become possessory immediately in the first clause for what follows it to be an exectory limitation. In the scenario in this post, the interest has yet to become possessory, so it's "subject to complete divestment" since it may NEVER become possessory.


My professor never went into the categories of vested remainders, so that could be a source of the confusion on my part. The only subclass of vested remainders we learned about were vested remainders subject to open. Aside from that, all we learned were contingent remainders, and executory interests (which I'm guessing is the same as executory limitation).

Because we may be talking apples and oranges, allow me to provide an example to clarify the point I was making:

"To A for A's life so long as A continues working at ACME, then to B and his heirs"

I changed the condition in the phrase to match the one above (though the condition in the original I have is essentially the same thing in that A could only keep the interest if he continued to do something throughout his life). This example was provided by my professor, and came out of a book on estates.

A - Life Estate Defeasible - There is something A can do that would terminate his interest (which is to stop working at ACME)
B - Vested Remainder in Fee Simple Absolute - It does not divest, because there is nothing B can do to take the interest away

This is the point I was making earlier, as to why a defeasibility condition is not the same as divestiture. Look at the wording of the grant, to find out of the condition is part of A's grant or part of B's. Here, it is part of A's.

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Re: Contingent Remainder vs. Executory Interest

Postby keg411 » Mon Mar 28, 2011 11:33 pm

In your first example, B does not yet have a possessory interest on the grant. He has to wait until A dies to have the possibility of taking possession (and may never take possession). If B stops working at ACME, or dies, before A dies, C has possession.

In your second example, A does have a possessory interest on the grant. If A stops working at ACME, or dies, B takes possession.

It's dependent on which person the limitation is placed on; the first party that takes possession immediately or a future party. In the two examples, they are different.

That is the primary difference between the two. But if you never learned about "vested interests subject to divestment" just go by what your prof is teaching.
Last edited by keg411 on Mon Mar 28, 2011 11:35 pm, edited 1 time in total.

dakatz
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Re: Contingent Remainder vs. Executory Interest

Postby dakatz » Mon Mar 28, 2011 11:34 pm

keg411 wrote:In your first example, B does not yet have a possessory interest on the grant. He has to wait until A dies to have the possibility of taking possession (and may never take possession).

In your second example, A does have a possessory interest on the grant. If A stops working at ACME, or dies, B takes possession.

That is the primary difference between the two. But if you never learned about "vested interests subject to divestment" just go by what your prof is teaching.


Def. I had a feeling that my unfamiliarity with certain subcategories was causing me confusion. As always, Keg, you are the voice of reason :)

keg411
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Re: Contingent Remainder vs. Executory Interest

Postby keg411 » Mon Mar 28, 2011 11:36 pm

My professor has admitted she really doesn't understand this stuff, so I'm just trying to learn it her way and using the examples she gave since she said that's how she's going to test us :lol:.




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