Outline - Property - IV - Future Interests

Property (2005-2006)

IV. FUTURE INTERESTS

1. Transferor
   1. Reversion - Follows life estate or term of years
   2. Possibility of Reverter - Follows fee simple determinable
   3. Right of Entry - Follows fee simple subject to condition subsequent
2. Transferee
   1. Vested Remainder
      1. Remainderman is born
      2. Remainderman is ascertainable
      3. No express condition precedent in clause creating the remainder or the preceding clause
   2. Contingent Remainder
      1. Remainderman cannot be identified by name
      2. There is a condition precedent in the clause creating the remainder
   3. Shifting Executory Interest
      1. Like a defeasible fee, but future interest not in grantor
      2. Divests right to possession of a transferee
   4. Springing Executory Interest
      1. Most commonly seen in “future interest only” or “gap” conveyance
      2. Divests right to possession of grantor
3. Grantor vs. State
   1. If an entire estate fails to vest, there is a reversion to the grantor; but
   2. If there is simply no heir, the property escheats to the state.
4. Rule Against Perpetuities

   1. Common Law Rule

      "No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest."

      1. Contingent remainders must vest or fail to vest.
      2. Executory interests must become possessory.
      3. Vested remainders subject to open must close or completely vest.
      4. Not applicable to other future interests.
   2. Create, Kill, Count Method
      1. Create, after the conveyance, someone who will be eligible to claim the interest, starting as far back in the chain of title as possible.
      2. Kill everyone who was alive at the time of the conveyance
      3. Count for 21 years to see if the interest has vested. If not, the interest violates the RAP and is stricken.
   3. Wait-and-See Doctrine
      1. Arose to deal with legal fictions arising from RAP
         1. Fertile octogenarian (assume that a person of any age can have a child)
         2. Unborn widow
      2. Period
         1. Common Law (21 yrs)
         2. USRAP (avg. lifespan 69 + 21 yrs = 90 yrs)