Future Interests

Nota:

• Future interest that arises in a grantor who transfers an estate of lesser quantum than she started with 

Nota:

• Future interest of defeasible fee NY: abolished distinction below - both called: Remainders Subject to a Condition Precedent

1. i) Shifting executory interest

   Nota:

   • Always follows a defeasible fee and cuts short someone other than grantor.
   1. e.g. "To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs"

      Nota:

      • B has a shifting executory interest. A has a fee simple subject to B's shifting executory interest.
2. ii) Springing executory interest

   Nota:

   • Cuts short grantor or grantor's heirs
   1. e.g. "To A, if and when he marries." A is unmarried.

      Nota:

      • A has a springing executory interest. O has a fee simple subject to A's springing executory interest. 
3. Rule Against Perpetuities applies
   1. Where no limit on the time within which it must vest violates RAP.
      1. e.g. "To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs."
         1. Offensive future interest stricken: "To A and his heirs so long as the land is used for farm purposes."

            Nota:

            • A has a fee simple determinable. Grantor has the possibility of reverter. 

Nota:

• "To A for life, then to B" or "To A for ten years, then to B" Always accompanies a preceding estate of known fixed duration - usually life estate or term of years.

1. 1) Vested remainder

   Nota:

   • Where remainder is both an ascertained person and is not subject to any condition precedent. 
   1. i) Indefeasibly vested remainder

      Nota:

      • Holder of this remainder is certain to acquire an estate in the future.
      1. e.g. "To A for life, remainder to B." A is alive. B is alive
         1. If B predeceases A - B's future interest passes by will or intestacy
   2. ii) Vested remainder subject to complete defeasance / vested remainder subject to total divestment / in NY - vested remainder subject to total defeasance

      Nota:

      • Remainderman's taking could be cut short because of a condition subsequent. 
      1. e.g. "To A for life, remainder to B, provided, however, that if B dies under the age of 25, to C"

         Nota:

         • If B is under 25 at time of A's death, B still takes.  However, B must live to 25 for his estate to retain his interest - otherwise passes to C. 
         1. Grantor's future interest: Reversion
         2. C has a shifting executory interest
   3. Class closed = No vested remainder!
      1. CL Rule of Convenience

         Nota:

         • Class closes whenever any member can demand possession.
         1. Exception: Womb Rule
   4. Class open
      1. iii) Vested remainder subject to open

         Nota:

         • Additional takers can still join group = partial diminution of share
         1. e.g. "To A for life, then to B's children." A is alive. B has two children, C and D.
            1. If C or D predeceases A - share goes to their divsees or heirs
         2. Rule Against Perpetuities may apply
            1. Gift that is conditioned on the members surviving to an age beyond 21 violates RAP = void
               1. e.g. "To A for life, then to such of A's children as live to attain the age of 30." A has two children, B and C. B is 35 and C is 40. A is alive
                  1. Grantor has a reversion
2. 2) Contingent remainder

   Nota:

   • Where remainder is an unascertained person or is subject to a condition precedent, or both. 
   1. Later person ascertained or condition met
      1. Contingent remainder becomes: Indefeasibly vested remainder
   2. Later person ascertained or condition no met
      1. Grantor's future interest = Reversion
   3. Rule of destructibility - CL vs. Now

      Nota:

      • At common law, a contingent remainder was destroyed if it was still contingent at the time the proceeding estate ended. Rule abolished in NY!   Now - if still contingent grantor or grantor's heirs hold estate for remainder subject to B's springing executory interest.
   4. Rule in Shelly's Case - CL vs. Now
   5. The Doctrine of Worthier Title
   6. Rule Against Perpetuities applies