PRESENT + FUTURE INTERESTS

Rule of Testator Intent – Most important. Ascertain from language of entire instrument read in light of the circumstances. Then,
Rule of Construction – W/ambiguity in language, most states follow a clear hierarchy (either by statute or CL)  FSA > FSSCS > FSD > FSSEL
 Conditions – There is a strong preference for construing conditions as subsequent in order to vest remainders
 Law is more favorable towards reversionary future interests (returned to grantor) than interests in transferee (to some third party)
o Reversionary Future Interests (Retained by grantor)
 Possibility of Reverter (FSD)
 Right of Entry (FSSCS)
 Reversion (Life estate)
o Non-Reversionary Interests (Created in transferee/3rd party)
 Remainder (Life estate to A, then to third party)
 Vested
 Contingent
 Executory Interest (FSSEL)
Doctrine of Merger – Whenever the same person acquires all the existing interests in land (present and future), a merger occurs, and the person’s interest
becomes an FSA.

Present Interest Magic Words Characteristics of Interest Future Interests Future Owners’ When Does Fee
Accordant Rights Terminate
FSA “O to A” Alienable, devisable, N/A N/A Never
“O to A and descendible
heirs/heirs and transferrable/giftable/sellable
assigns” (during life)

Owner dies intestate  Heirs

inherit
FSSCS – Defeasible Of Condition Alienable, devisable, and To Grantor – Right of Re-entry Adverse possession SoL does If condition subsequent
descendible SUBJECT TO THE (RoE) held in FSA; Elective NOT run until the party holding occurs, owner must exercise
Grantor carves out a “To A, but if X…” CONDITION Right RoE decides to exercise it. RoE. Until then, grantee
non-automatic right of “To A upon retains ownership. Grantor
re-entry upon the condition that…” Partition may thus waive any breach
happening of an “To A if…” of the condition.
SUBSEQUENT “To A provided Action for Waste
event/non-event that…” Equitable doctrines may bar
“To A with the right of entry
proviso that…” Detrimental Reliance
Doctrine; Estoppel – Not
If grantor is reserving equitable that grantor waited
RoE, must have to exercise right
express language! Waiver – If RoE not
exercised after a rznable
lapse of time (sometimes
SoL) has occurred, presume
that RoE has been waived
FSD – Defeasible Of Duration Alienable, devisable, and To Grantor – Possibility of Adverse possession SoL clock Automatically. No possibility
descendible SUBJECT TO THE Reverter (PoR) held in FSA begins ticking as soon as for grantor to waive breach;
Upon the happening of “To A so long as…” CONDITION triggering event occurs. new deed is required.
an event/non-event, the “To A until…”
 landed is to revert to “To A while…” Mere expression that property Partition
grantor automatically “To A during…” be used for particular purposes
“To A unless…” is NOT in and of itself enough to Action for Waste
turn from FSA to FSD
FSSEL – Defeasible Either FSSCS or FSD Alienable, devisable, and To Grantor – No interest Partition Automatically
language + Passing descendible SUBJECT TO THE
Grantor conveys a FSD to alternative grantee. CONDITION To Third Party – Executory Action for Waste
or FSSCS but to a third Interest
party “To A, but if X
happens, then to B…”
“To A, but if X
happens, then B has
right to re-enter and
re-take…”
Shifting Executory “To A, only if A To Grantor (present interest) –
Interest – Defeasible graduates from law FSSEL subject to A’s condition
school”
Grantee gets interest To Grantor (future interest) – No
only upon condition interest
precedent
Leasehold – Defeasible “To A for X Present, possessory interest that To Grantor/Landlord – Action for Waste
years/months” runs for period of time. A tenant Reversion held in FSA
Non-freehold estate – may freely convey/devise his
Term of Years interest during its terms for the To 2nd Grantee – Remainder
balance of the term.
Leasehold – Defeasible No particular words. Periodic, possessory interest To Grantor/Landlord – Action for Waste Terminated by either
But subject to SoF if that runs from month-to-month Reversion held in FSA landlord or tenant
Non-freehold estate – term longer than 1+ (apartment) or year-to-year
Periodic Tenancy years (commercial/residential lease) To 2nd Grantee – Remainder
Leasehold – Defeasible No particular words. Leasehold has no fixed duration To Grantor/Landlord – Action for Waste Terminated “at will” by either
But subject to SoF if Reversion held in FSA landlord or tenant
Non-freehold estate – term longer than 1+
At-will Termination years To 2nd Grantee – Remainder
Leasehold – Defeasible No particular words. Exists when a tenant remains in To Grantor/Landlord – Action for Waste
But subject to SoF if possession of leased property at Reversion held in FSA
Non-freehold estate – term longer than 1+ end of the lease. Lease ended
Tenancy at Sufferance years but you haven’t left yet To 2nd Grantee – Remainder
Life Estate – Defeasible “O to A for life” Life tenant can only convey (not To Grantor – Reversion held in Action for Waste Automatic reversion to
“To A for as long as devise) property, but their FSA grantor upon life tenant’s
Measured by Duration she shall live” grantee will only possess it so Life tenant has duty to keep death
of Life of Owner in “O to A for life, and long as OG life tenant lives premises in ordinary repair, pay
Tenancy or Por Autre her heirs” taxes, etc. Life tenant is not
Vie Life tenant pur autre vie can entitled to contribution or
“To A for the life of transfer/assign in life AND may reimbursement from future
B”/Pur Autre Vie devise (by will) and descend (no interest holder for these
will) expenses. Life tenant not
obligated to improve property or
Life tenant pays for taxes, repair extraordinary damages.
repairs, etc.
Life Estate – Defeasible “O to A for life, then to Life tenant can only convey (not To Grantor – Reversion held in Action for Waste
B…” devise) property, but their FSA (only if a single grantee’s
 Measured by Duration grantee will only possess it so Remainder is not vested; once a Life tenant has duty to keep
of Life of Owner  Then long as OG life tenant lives remainder is vested, grantor’s premises in ordinary repair, pay
Third Party reversion evaporates) taxes, etc. Life tenant is not
Life tenant pays for taxes, entitled to contribution or
repairs, etc. To 2nd Grantee – reimbursement from future
Remainder (Vested or interest holder for these
Contingent) in FSA upon first expenses. Life tenant not
grantee’s death obligated to improve property or
repair extraordinary damages.

CALIFORNIA Table of Interests

Name of When Does Fee Terminate? Who Holds the Future Language?
Corresponding Future Interest?
Interest
FSA N/A Never N/A “O to A” or “O to A and heirs”
All DF  FSSCS Power of Termination Only when PoT is exercised; Anyone Any
elective right

CLASS ANALYSIS

Class Gift – A class of people may hold a remainder interest.

 This is distinguished from a group gift, where everyone is named.
 Conditions that remain open for too long are struck down by rule against perpetuities

 First, ask: What is the condition of the class closing?

 No people meet condition + class is open – The class has a contingent remainder. All individuals have a contingent remainder interest. The OG grantor
has a reversion. No one’s interest has become vested.
 Some person meet condition + class is open – The class has a vested remainder subject to open. The individual who meets condition has a vested
remainder subject to partial defeasance. The unascertained individuals have contingent remainders.
 Some person meet condition + class is closed – The ascertained individual has a vested remainder. The unascertained individuals have nothing since
the class is closed.
 All people meet condition + class is open – All individuals have vested remainders subject to partial divestment until the class closes. The class has a
vested remainder subject to open.
 All people meet condition + class is closed – All individuals have vested remainders + the OG grantor’s reversion has evaporated (although they may
still have a future interest in some other way).
 Common Law Estates and Interests in Real Property

Generally Estate is a legal fabrication. It is the totality of one’s legal ownership interest/right in a parcel of land. When someone dies, “estate of X” is immediately created. Estates can be
present OR future; are carved up not only physically but over time

Present Estates – Owner of a present estate either actually possesses that land or has the present right to possess it. Each present estate is coupled with a future interest
presently held by someone else (except FSA). Menu of 4 limited present estates:
1. Fee Tail – No longer used
2. Fee Simple
a. Fee Simple Absolute (FSA) – Perpetual state from now until infinity
b. Fee Simple Subject to Condition Subsequent (FSSCS) – Defeasible
c. Fee Simple Determinable (FSD) – Defeasible
d. Fee Simple Subject to Executory Limitation (FSSEL) – Defeasible
3. Leasehold – Defeasible
a. Term of Years – X Time (Non-freehold estate)
b. Periodic Tenancy (Freehold estate)
c. Tenancy at Will – No fixed duration, can be terminated at will by either tenant/landlord (Freehold estate)
d. Tenancy at Sufferance – Not paying but allowed to be there. Usually a hold-out (Freehold estate)
4. Life Estate – Defeasible
a. Estate measured by duration of life tenant or life of third party
b. Estate measured by duration of life tenant, then to third party

Defeasible Fee (DF) – Baked into estate right now is someone else who holds a future interest in it that is presently held
 Possibility that, if a certain event is triggered, property will be defeased – shift in possession from present holder to the holder of the future interest
 Think of defeasancy as an idea that can apply to anything – not only Fee Simple, but Leaseholds and Life Estates
 Conditions can last forever
 Two Kinds:
o Determinability – Linked to duration/with reference to some state of affairs
o Conditionality – If this, then that.
Present Non-Defeasible Fees – Fee Simple Absolute (FSA) Roberts v. Rhodes (School receives grants of land by deeds from two different
Interests – individuals. “It being understood that this grant is made only for school or cemetery
Fees Fee Simple Defeasible – When you decide that interest in land may terminate upon purposes”/”school and cemetery purposes only”…school uses land for 60 years, sells
Simple happening of a future event. No limit or condition. The deed must clearly express such land to D. P says title reverted to him upon cessation of use of land for school
an intent (and time-honored language is helpful) purposes)
 FSSCS
 FSD “Only” is not sufficient language to create an FSD; express durational language is
 FSSEL required to turn an FSA to FSD.

Rules of Construction Babb v. Rand (Will stated “Summer home left to John in FSA with the proviso that he
 Express durational/conditional lang. required to turn FSA  defeasible fee shall never deny access or occupation to the several heirs named during their lifetime”)
 Rule of Testator Intent – Apparently inconsistent clauses must be reconciled to Argument for FSA?  Similar to Roberts v. Rhode, no magic language of duration
effect the clear intent of the testatrix/testator existed here. Both languages seemed to have words of hope/wish, which is not legally
 Conditions – There is a strong preference for construing conditions as subsequent binding on parties.
in order to vest remainders Argument for defeasible fee?  Testatrix intended to create a FSSCS. When
 Hierarchy – FSA > FSSCS > FSD > FSSEL someone expressly says “fee simple” standing alone, this creates FSA; when someone
 Whether the deed is a charitable trust or a FSSCS (really a FSSEL in non- expressly says “fee simple” and follows up with a condition, this creates a defeasible
California) depends on the manifested intention of the transferor fee.
 If express statement about “in the event of a breech…” this shows
intent to create a FSSEL and not a charitable trust Thus, it’s a defeasible fee.
 Interest Names – Interests retain their label at the moment of creation. If you own
a RoE, and you die, that RoE remains a RoE that gets passed down to your next
of kin, UNLESS you convey your RoE to the holder of present interest, which Is it FSD or FSSCS?
 creates an FSA estate.
“With the proviso that” is more similar to FSSCS magic words than FSD magic words +
Other Notes Rule of Construction hierarchy
 Charitable Trust – A charitable trust arises out of intent to create it, subjecting the
person to whom property is held to equitable duties to deal with property for Thus it’s a FSSCS, the condition being that he does not deny designated heirs access
charitable purposes. or occupation in the estate.
 Elements:
 Intention to Create a Trust
 Trust Res – Object of the trust/property contained in the trust Living Desert Reserve (Will conveying land to City on express condition that it be
 Charitable Purpose promoting welfare of mankind forever used as a desert preserve. If breached, land passes to Living Desert Reserve.
 Beneficial Owner – General public/residents of town. Public official City wants to use land for golf course, attempts to purchase reversionary interest)
sues on behalf of the beneficial owner to enforce terms of trust.
 Difference between charitable trust and DF? If an entity takes possession by eminent domain of a FSSCS (really a FSSEL in non-
 DF  Legal + equitable title to property until conditions are breached California): City must compensate Living Desert for reversionary interest b/c violation
 DF has no enforceable duties, whereas charitable trust does was “imminent”
 California
 Collapses all defeasible fees into FSSCS
 Eminent Domain. Owner of reversionary interest is not entitled to
compensation unless condition was breached by the date of valuation in the
eminent domain proceeding. This does not apply in exceptional
circumstances – including when violation of the condition is reasonably
imminent at the time of the eminent domain proceeding
Present Lease is a transfer of the right to exclusive possession of specific real or personal property for an agreed, if indefinite, period of time.
Interests – 1) Term of Years – Present, possessory interest that runs for a period of time.
Leaseholds o Language used to create this is “To A for X years/X months”
o A tenant may freely convey or devise his leasehold interest during its terms for the balance of the term.
2) Periodic Tenancy – Periodic, possessory interest that runs from month-to-month (apartment lease) or year-to-year (commercial/residential lease)
o Continues for succeeding periods until terminated by either landlord or tenant.
3) Tenancy at Will – Leasehold has no fixed duration. Can be terminated “at will” by either landlord or tenant.
4) Tenancy at Sufferance – Exists when a tenant remains in possession of the leased property at the end of the lease. Your lease ended but you haven’t left yet.

 Leasehold tenants are subject to doctrine of waste

 Leasehold tenants may also be defeasible through appropriate words of limitation
Leaseholds also create a future interest in grantor called reversion, and a future interest in 2nd grantee called remainder
Present Life Estates – When you want to impose lifetime limits on property. Lasts only so long as original grantee/life tenant lives. Upon grantee’s death, property automatically reverts
Interests – to original grantor or shifts to a successor grantor.
Life  Life estates are capable of being defeased just as fee simples can be. They can also be defeased in those 3 categories as well.
Estates
White v. Brown (Will drafted granting home to P “to live in and not to be sold”)
 Here, “to live in and not to be sold” is not enough evidence to overcome law’s presumption of FSA.
 “To live in” =/= “For life”

Williams v. Estate of Williams (Will granted joint lifetime interest to three unmarried daughters...”to my three daughters to have my home farm…to have and to hold during their
lives, and not to be sold during their lifetime. If any of them marry their interest ceases and the ones that remain single have full control of the same”…also discussion about
recognizing other heirs have an interest in property b/c he says anyone who “contests” the will would be “debarred” from any interest)
 Clear intention for the named daughters to have an interest less than FSA – a life estate subject to executory limitation/subject to some loss by way of marriage.
 Each sister holds: 1/3 vested remainder subject to defeasance in life estate (lost if they marry) + executory interest in other daughters’ life estates shares
o When first dies  remainder in life in the two sisters. Each surviving sister has ½ life estate.
o If one marries  executory interest for life in the two sisters. Each surviving sister has ½ life estate.
 The heirs held a reversion in FSA
 O/Estate of Williams (and thus his heirs) hold: future interest of life estate (a reversion in fee simple) + quasi-executory interest/RoE in fee simple that becomes
possessory in case of marriage
 Future When a holder of a future interest dies, interest goes to the future interest holder’s Abo Petroleum (Life estates to two daughters. “during her natural life…and at her death
Interests heirs. Future interest is a presently existing right to future possession of the to revert…become the property absolute of her heirs, meaning her children if she have
property + automatically created reversion in property any at her death, but if she die without heirs, then this property shall vest in and
become the property of her estate”…then parents executed another deed for same life-
Five Types of Future Interests (All 5 are freely transferable by estate property to give absolute title before daughters had children…)
sale/gift/will/inheritance)  Daughters have ½ life estate, daughters’ children (as a class) have a contingent
remainder (condition of birth), daughters’ heirs have an alternative contingent
remainder (condition of children not being born), OG grantor has reversion which
Future Interests Which Are Certain to Materialize into Present Estates lasts if neither remainders vest
1. Reversions (Life Estate) – The future interest in a life estate retained by  Once daughters have 1 child, 1 child’s contingent remainder  vested remainder
original grantor. They follow estates that end naturally – they cannot interrupt subject to partial defeasance (so long as class is still open). Class has a vested
a life estate by causing it to end earlier than it otherwise would. remainder subject to open. Unborn children continue to have contingent remainder
2. Remainder (Life Estate to A, then to Third Party) – The future interest in a life (contingent on birth). Heirs’ alternative contingent remainder evaporates.
estate created in a third party. Upon termination of the life estate, the property
will go to the third party remainderman. Remainders follow estates that end
naturally – they cannot interrupt a life estate by causing it to end earlier than it
otherwise would.
o Vested – Held by an ascertained person AND will become
possessory upon natural termination of the preceding estate (i.e.
cannot be subject to a condition precedent). “From O to A for life,
then to B and heirs”
o Vested Remainder Subject to
Divestment/Defeasance – Occurs when a vested
remainder has a condition subsequent – the
remainder is vested, but the occurrence of the later
event could cause defeasance.
o “From O to A for life, then to B, but if B divorces
A, then to C”
o Vested Remainder Subject to Open
o Contingent – Held by an unascertained person OR subject to a
condition precedent other than the natural termination of the
preceding estate.
o “From O to A for life, then to B if B is still married to C,
otherwise to D” – B and D hold contingent remainders.
If D dies while A is still alive, B’s remainder interest
becomes vested
o When a contingent remainder fails to vest, property will
revert to the original grantor; grantor always retains a
reversion interest if the remainder is not vested
o Alternative contingent remainders – Because
contingent remainders can fail, grantors who write
contingent remainders often write into their deeds or
wills alternative contingent remainders as well. “From O
to A for life, then to B if B is then alive, but if B does not
survive A, then to C”
o Rule of Construction: Conditions – There is a strong preference
for construing conditions as subsequent in order to vest remainders

Future Interests Which May/May Not Materialize into Present Estates (only
become possessory upon condition)
3. Possibility of Reverter (FSD)
4. Right of Entry (FSSCS)
5. Executory Interest (FSSEL)
Rule Against Perpetuities – If the possibility exists that the interest may not vest
before the 21 year limit, interest is void at outset. So, a gift to a class violates RaP if it
might vest too remotely to even one member of the class.
 Creates future interests in the grantor; the grantor can then freely transfer
those interests
 Only applies to unvested future interests. Rule doesn’t like interests that don’t
vest within a certain period of time/floating interests.
o Contingent remainders
o Class gifts that remain open
o Executory interests

Mechanisms By Which Disputes w/Holders of Present Interests May Be Resolved

1. Partition – Forced sale to “solve the little sibling problem”. When ownership
of real property is divided into 1+ possessory interests and 1+ future
interests, owners may apply to the court for an order directing that said real
property, or a part of the real property, be mortgaged, leased, or sold, so long
as the proposed sale of development rights would be expedient
 Expedience
 Evidence of a proposed buyer for development rights?
 Evidence that sale of dev. rights was necessary to preserve
property as an asset?
 Evidence of any other tangible/intangible benefit achieved by a sale
of the development rights?

2. Action for Waste – If a tenant commits waste on the land, person having
next immediate estate of inheritance may have an action of waste against
such tenant to recover the place wasted + amount of damage
 Waste if the “unreasonable or improper use, abuse, Mechanisms By Which Disputes w/Holders of Present Interests May Be Resolved
mismanagement, or omission of duty touching real estate by
one rightfully in possession, which results in its substantial Partition
injury” Hahn v. Hagar (Will conferring qualified life estate in son…”I confer upon him life use of
o A diminishing of value of property in a material sense all real property…it being my intention that he be permitted to continue to farm such
o Future interest holder has an expectation to receive real property and use such improvements…if he elects to cease farming said property
the property in more/less the same form. Courts prior to his death, I devise all such real property and related improvements to my
recognize non-monetary (sentimental) value in action children in equal share per sterpes”)
for waste too (can’t just totally demolish old home and  O to A for life, but if A ceases farming, then to children
build a new one  A has a vested remainder subject to partial defeasance in life estate
 Affirmative/Voluntary Waste – Unreasonable acts which  Children have an executory interest in life estate
substantially reduce value of underlying property  O has a reversion
 Permissive Waste – Substantial & unreasonable acts of
allowing property to deteriorate; failure to perform normal Per Sterpes – Three issues – A child and two grandchildren – means half of
maintenance, failure to prevent harm to property, economic distribution given to child and half to the two grandchildren
waste Per Capita – Counts heads and divides the estate three ways.

“Development rights” was intended to fall under category of real property, thus counts
as real property

Here, partition is not allowed b/c fails to meet criterion of expedience

 Waste
Matteson (Property devised to A, life tenant, and remainder to A’s heirs + sisters. A
stopped paying taxes on property, allowed residence to fall into disrepair, sister paid
taxes, A never paid her back. Sister hired maintenance worker to repair premises, A
never objected. Sister sues for waste)
Failing to maintain property, being neglectful, allowing it to go into severe/substantial
deterioration, subjecting home to tax taking = waste
Property passes to holders of the remainder interest following termination of life estate
(as though A died).