This is an extract of our Future Interests document, which we sell as part of our Property Outlines collection written by the top tier of University Of Michigan Law School students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Property Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:
I.?FUTURE INTERESTS Steps o o o o o o
to identify future interest: (1) Classify the present estate (determinable? Subject to condition subsequent? Life estate?) (2) Identify who has the future interest (grantor? Third party?) (3) Identify conditions for the interest to become possessory. (4) Identify the type of estate in which it will be held. (5) Identify whether the interest is vested or contingent. (6) Apply the relevant rules (Destructibility of Contingent Remainders, Rule in Shelley's Case, Doctrine of Worthier Title, and RAP) A future interest is a non-possessory estate which is capable of becoming possessory. Like possessory estates, future interests fall into a limited number of categories. (Numerus clausus). a. Reversion??A reversion is a future interest in the grantor, which follows after the grantor conveys a vested estate of a lesser quantum than he has. Reversions follow life estates and leaseholds. Reversions are considered vested even though they will not necessarily become possessory. Reversions are not subject to the RAP. Reversions have always been fully transferrable inter vivos. b. Possibility of Reverter??
A POR is created in the grantor and follows a determinable estate. A POR automatically returns title to the grantor. A POR was not transferrable at common law (except by descent), but is generally transferrable today. A POR need not be expressly retained to be created. It is implied provided that the estate returns to the grantor upon the expiration of a stated condition. c. Right of Entry??
A ROE is created in the grantor and follows an estate subject to condition subsequent. A ROE creates an option in the grantor to retake the premises if he chooses, once a stated condition is met. A ROE was inalienable at common law (except by descent), but today it is alienable in some jurisdictions. o The ROE could always be released by the holder. o A particularly harsh minority rule destroys the ROE if the holder attempts to convey it. At common law, the ROE survived forever and was not subject to the RAP. This is the d. Remainder??
A remainder is a future interest in a grantee which cannot divest the prior estates. It waits patiently for the preceding estate to expire. A remainder can only become possessory on the natural expiration of the prior estate. A remainder only exists when there is a preceding freehold estate and when it is expressly created in the original grant. A remainder can only follow a fee tail, life estate, or term of years. A remainder never divests a fee simple. If an interest divests a fee simple, it is an executory interest. Remainders are either vested or contingent. A vested remainder is one which is not subject to any condition precedent which must be satisfied before it becomes possessory. A contingent remainder only becomes possessory if a condition precedent is satisfied. i. Vested Remainder
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