Present Estates and Future

Interests
Part 1
 Concurrent Estates

More than one person has rights and

privileges with respect to one parcel of land.
• E.g., Husband and wife own Blackacre as
community property
• E.g., Brother and sister own property as
tenants in common.

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Non-Concurrent Estates

Real property has two or more owners, but they

do not have the right to possession at the same
time.
◦ E.g., Landlord leases Blackacre to Tenant for a period
of one year. T has full possessory rights to Blackacre
to the exclusion of Landlord for the period of the
lease, but Landlord gets it back after one year (the
property “reverts” to Landlord at the end of the lease
– Landlord has a “future interest” in the property
called a “reversion”).
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 Some common terms

Decedent = a dead person

Testate and intestate = a decedent dies
testate if s/he dies with a will. A
decedent dies intestate if without a will.
Testator (Testatrix) = male (female)
person who writes a will transferring
property at death.
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 Some common terms

Heirs = people who inherit real property from a

decedent who dies intestate; identified by state
statute.
Devise and devisees = to devise is to pass real
property by will. The person receiving the real
property is a devisee.
Bequest and bequeath = to bequeath is to pass
personal property by will; the property itself is called
a bequest; the recipient of a bequest is a “legatee.”

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 Some common terms

Issue = a person’s lineal future

descendants all the way down the line.
Ancestors = a person’s biological
forebears all the way up the line.
Collaterals = all blood relatives other
than issue or ancestors (siblings,
cousins, aunts, uncles, etc.).
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 “Estates” in Land
To have an “estate” in land you must
have the right of exclusive possession.
 E.g., an easement is simply a right of way and is
not a right of exclusive possession – it is not an
estate.
 There are both “present estates” and
“future estates” (but now generally called
“future interests”) – it is the legal division
of property over time.
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 Freehold Estates

 The term “estate” dates back to feudal system –

a freehold estate is one that has an indefinite
period of holding. Freeholders are said to have
“seisen.”
 Non-freehold estates are those that have an
ascertainable termination date (like a lease for a
period of years). Non-freeholders (e.g., lessees)
do not have “seisen.”
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 Present Estates – 5 Types
Fee Simple Absolute
Fee Tail (now abolished)
Fee Simple Defeasible – 3 types:
 Fee Simple Determinable
 Fee Simple Subject to Condition Subsequent
 Fee Simple Subject to Executory Limitation
Life Estate
Life Estate Defeasible
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 Fee Simple Absolute
 The greatest interest in land one can own
because it allows the estate to be inheritable at
the holder’s death, rather than reverting back
to the grantor.
 A fee simple absolute is devisable, descendible,
alienable, and perpetual in duration.
 Examples:
 “O to A and his heirs”
 “O to A” (most states have a statutory presumption
favoring fee simple absolute in this situation)

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 Fee Simple Absolute

To create a Fee Simple Absolute:

“O to A and his heirs”
“O to A in fee simple absolute”
“O to A” (most states presume
this language creates a FSA)

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 Fee Tail

Historically, a type of fee estate that

allowed only one’s literal
descendants to inherit (the grantor
had to “tailor” his fee).
Now abolished in all but four states
(DE, ME, MA, RI).
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 Fee Tail

Examples:
“O to A and the heirs of his
body”
“O to A in fee tail”
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Fee Simple Defeasible

A fee simple defeasible estate

has the potential for infinite
duration, but, unlike a fee simple
absolute, it may be subject to an
early termination if certain
prescribed events take place.
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 Fee Simple Defeasible

There are three kinds:

Fee simple determinable
Fee simple subject to condition
subsequent
Fee simple subject to executory
limitation
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Fee Simple Determinable

The conveyance creates a fee simple but also contains

a limitation providing that the fee will automatically
terminate or expire upon the occurrence of a stated
event (the “determining event”).
Must use durational words like
 “for so long as”
 “while”
 “during”
 “until”
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 Fee Simple Determinable
Example 1: O grants Blackacre “to the
School District for so long as Blackacre is
used as the site of a school.”
 If the district does not use Blackacre for a
school, it automatically reverts back to O or O’s
heirs.
 The District has a present estate called a “fee
simple determinable”
 O has a future interest called a “possibility of
reverter” and when O gets the property back O
will hold it in fee simple absolute.
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 Fee Simple Subject
To Condition Subsequent

A fee simple estate is created but with a limitation that

gives the grantor the power to terminate the fee simple
on the occurrence of a stated event (the “condition
subsequent”). Must use conditional words like:
 “but if”
 “on condition that”
 “subject to the condition that”
 “provided, however”
 “if, however”

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 Fee Simple Subject
To Condition Subsequent

Unlike fee simple determinable, the

grantee’s interest does not terminate
automatically on the occurrence of the
triggering event but is terminated only
when grantor exercises his right to
reacquire the property (called a “power of
termination” or a “right of re-entry”).
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 Fee Simple Subject to
Condition Subsequent

Example 2: “O grants Blackacre to School District, but if

school operations are ever permanently suspended on
Blackacre, then grantor or his successor in interest shall
have the power to enter and terminate the interest of the
District.”
• District has a present estate called a “fee simple subject to
condition subsequent”
• O has a future interest called a “power of termination” (also
called a “right of entry” or “right of re-entry”) and when O
exercises that right and reacquires the property O will hold it in
fee simple absolute.
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 Fee Simple Subject To Executory
Limitation

A fee simple subject to executory

limitation is created when, upon the
happening of the triggering condition
that divests the holder of the
property, the property goes to a third
person (a “grantee”) rather than back
to the grantor.
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 Fee Simple Subject To Executory
Limitation

FSEL can be created with both

durational words (like fee simple
determinable) and conditional words
(like fee simple subject to condition
subsequent), but the difference is that
the future interest vests in a third
person rather than the grantor, and in
both cases it happens automatically.
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 Fee Simple Subject to Executory
Limitation
Example 3: O grants Blackacre “to
School District while Blackacre is used as
a school, and when it is not, then to X.”
• Upon the happening of the triggering event, the
property passes automatically to X, a third party
other than the original grantor.
• District has a present estate called a “fee simple
subject to an executory limitation.”
• X has a future interest called an “executory
interest” and when, and if X gets the property X will
hold it in fee simple absolute.
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 Fee Simple Subject To Executory
Limitation

Example 4: “O grants Blackacre to School District, on

condition that Blackacre be used as a school, but if not,
then to X.”
• Upon the happening of the triggering event, the property
passes automatically to X, someone other than the
original grantor.
• District has a present estate called a “fee simple subject
to executory limitation.”
• X has a future interest called an “executory interest “
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 RECAP –DEFEASIBLE FEES
FEE SIMPLE DETERMINABLE
Possibility of Reverter
Present possessory estate terminates
automatically upon happening of
determining event and reverts to the
grantor
Created by durational words:
•For so long as
•While
•During
•Until
FEE SIMPLE SUBJECT TO
CONDITION SUBSEQUENT
Power of Termination (or Right of
Re-Entry)
Despite happening of the triggering
event, the present estate continues
in the grantee until the grantor
exercises the power to terminate or
re-enter
Created by conditional words:
•But if
•On condition that
•Provided, however
•If, however
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 RECAP –DEFEASIBLE FEES
FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION

Executory interest created in a third person other than the grantor

Present possessory estate terminates automatically upon happening of

triggering event and the estate passes to the holder of the executory
interest (someone other than the grantor)
Created by either durational or conditional words:
•For so long as; while; during; until (durational language)
•But if; on condition that; subject to the condition that; provided,
however; if, however (conditional language)

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 Life Estate

A life estate is created when a grantor transfers to

another party (the “grantee” or “transferee”) an
estate that terminates at the death of the
transferee
Life estate could terminate at the death of another
designated person (“life estate pur autre vie”).
• Life estates are not inheritable

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 Life Estate

Example 5: “O to A for life.”

• A has a life estate;
• O has a future interest called a
“reversion” and when O retakes the
property O will hold in fee simple
absolute.
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 Life Estate
Example 6: “O to A for the life of B.”
 A has a life estate measured by B’s life, or a
“life estate pur autre vie”;
 O has a future interest called a “reversion”
that becomes possessory when B dies, and
when O retakes the property O will hold it
in fee simple absolute
What happens if A dies before B?
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 Life Estate Defeasible

A conveyance that is a life estate but

that may terminate in a way other
than (i.e., in addition to) the death of
the life tenant.

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 Life Estate Defeasible

Example 7: O, owner of Blackacre in fee simple

absolute, grants Blackacre “to A for life or until she
goes to law school.”
A has a life estate and can live on the property
until she either dies or goes to law school.
The durational language “or until” makes this
defeasible life estate a “life estate determinable”
just like a fee simple determinable .
What does O have?
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 Life Estate Defeasible

Example 8: O, owner of Blackacre in fee

simple absolute, grants Blackacre to “A for
life, on the condition that she never goes to
law school.”
A’s life estate will terminate at her death or
when she goes to law school. This is a
defeasible life estate called a “life estate
subject to a condition subsequent.”
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 Problem 1
Does A hold a fee simple absolute?
a. O conveys “to A”
b. O conveys “to A and his heirs”
c. O conveys “to A and the heirs of
his body”
d. O conveys “to A and his heirs, but if
A dies, to B and his heirs”

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 Problem 2
O conveys “to A and his
heirs so long as the property
is used as a residence.”
• A has . . .
• O has . . .
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 Problem 2
O conveys “to A and his heirs so long
as the property is used as a
residence.”
• A has a present estate called a fee
simple determinable,
• O’s has a future interest called a
possibility of reverter and it is in fee
simple absolute.
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 Problem 3

O conveys “to A and her heirs, on the express

condition that Blackacre be used only for
residential purposes, but if it ceases to be used
for residential purposes, then O and her heirs
shall have the right to reenter.”
• A has . . . .
• O has . . .
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 Problem 3

O conveys “to A and her heirs, on the express condition that

Blackacre be used only for residential purposes, but if it ceases to
be used for residential purposes, then O and her heirs shall have
the right to reenter.”
• A has a present estate, held in fee simple subject
to condition subsequent.
• O has a future interest called a right of reentry
or a power of termination and it is in fee simple
absolute.
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