Future interests - Next Generation Bar Exam
- Under the doctrine of worthier title, what is the effect of a conveyance to a grantor's heirs?
- The grantor retains a reversion rather than creating a remainder in the heirs. The doctrine is a rule of construction in jurisdictions that retain it.
- What future interest does a grantor retain after conveying a fee simple subject to a condition subsequent?
- A right of entry, also called a power of termination. The grantor must act to terminate the estate after the condition occurs.
- What future interest does a grantor retain after conveying a life estate with no further disposition?
- A reversion. The property returns to the grantor or the grantor's heirs when the life estate ends.
- What is a contingent remainder?
- A remainder in an unascertained person or subject to a condition precedent. Contingent remainders are subject to the Rule Against Perpetuities.
- What is an executory interest?
- A future interest in a transferee that can become possessory only by divesting a prior estate or interest. A shifting executory interest divests another transferee; a springing one divests the grantor.
- O conveys 'to A for life, then to B if B reaches 25.' B is 20. What is B's interest?
- A contingent remainder. Reaching 25 is a condition precedent to B's taking.
- What future interest does a grantor retain after conveying a fee simple determinable?
- A possibility of reverter. The estate ends automatically when the stated event occurs.
- O conveys 'to A so long as the land is used as a school.' What interest does O retain?
- A possibility of reverter. Durational language such as 'so long as' creates a fee simple determinable.
- Which future interests are not subject to the Rule Against Perpetuities?
- Interests retained by the grantor and indefeasibly vested remainders. Reversions, possibilities of reverter, and rights of entry are exempt.
- Under the Rule in Shelley's Case, what is the effect of a conveyance 'to A for life, then to A's heirs'?
- A takes a fee simple. Most jurisdictions have abolished the rule.
- What is a vested remainder?
- A remainder in an ascertained person that is not subject to a condition precedent. Vested remainders may be indefeasibly vested, subject to open, or subject to complete divestment.
- O conveys 'to A for life, then to B, but if B ever sells liquor on the land, to C.' What is C's interest?
- A shifting executory interest. C can take only by divesting B's vested remainder.
- What does the common-law Rule Against Perpetuities require?
- That a contingent interest must vest or fail, if at all, within 21 years after the death of a life in being at its creation. Many states have modified the rule by wait-and-see statutes or the Uniform Statutory Rule Against Perpetuities.
- What is a remainder?
- A future interest in a transferee that can become possessory on the natural end of the prior estate. A remainder never divests a prior estate.