beck 00 cx p Page i A Concise Guide to the Nuts & Bolts of Estates and Future Interests
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1 beck 00 cx p Page i A Concise Guide to the Nuts & Bolts of Estates and Future Interests
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3 beck 00 cx p Page iii A Concise Guide to the Nuts & Bolts of Estates and Future Interests Andrew Beckerman-Rodau Professor of Law Suffolk University Law School Boston, MA Carolina Academic Press Durham, North Carolina
4 beck 00 cx p Page iv Copyright 2004 Andrew Beckerman-Rodau All Rights Reserved Library of Congress Cataloging-in-Publication Data Beckerman-Rodau, Andrew A concise guide to the nuts & bolts of estates and future interests / by Andrew Beckerman Rodau p. cm. ISBN Estates (Law) United States. 2. Future interests United States. 3. Real property United States. I. Title: Concise guide to the nuts and bolts of estates and future interests. II. Title. KF575.Z9B '3 dc Carolina Academic Press 700 Kent Street Durham, NC Telephone (919) Fax (919) Printed in the United States of America
5 beck 00 cx p Page v Contents Chapter 1 Introduction to Basic Property Concepts 3 Types of property 3 Division of property 4 Summary of Main Points 5 Chapter 2 Transferring Property: Basic Vocabulary 7 Voluntary transfers 7 Types of voluntary transfers 7 Parties involved in a voluntary transfer 8 Involuntary transfers (or transfers via operation of law) 8 Types of involuntary transfers 8 Parties involved in an involuntary transfer 9 Explanatory examples 9 Summary of Main Points 10 Chapter 3 Types of Real Property Interests: Introductory Background 13 Basic vocabulary 14 Explanatory examples 14 Summary of Main Points 15 Chart: Characteristics of Present and Future Interests 16 Chapter 4 Types of Estates 17 Explanatory examples 20 Summary of Main Points 21 Types of freehold estates 21 Types of non-freehold estates (commonly called leasehold estates) 21 Chart: Types of Estates 23 v
6 beck 00 cx p Page vi vi CONTENTS Chapter 5 Conditions that can Terminate an Estate 25 Important vocabulary 25 Types of Conditions that Make an Estate Defeasible 26 Explanatory examples 26 Summary of Main Points 28 Chart: Types of Conditions that Make an Estate Defeasible 30 Chapter 6 Types of Future Interests 31 Future interests created in the original grantor or transferor 32 Explanatory examples 33 Future interests created in a third party by the original grantor or transferor 34 Explanatory examples 36 Summary of Main Points 36 Chart: Future Interests Created in Original Grantor 38 Chart: Future Interests Created in Someone other than the Grantor 39 Chapter 7 Types of Remainders 41 Explanatory examples 41 Types of vested remainders 44 Explanatory examples 44 Historical note 46 Explanatory examples 48 Class Gifts General rules 52 Explanatory examples 53 Vested Remainders Subject to Open Special Rules 55 Explanatory examples 55 Explanatory examples 56 Summary of Main Points 56 Types of remainders 56 Types of vested remainders 57 Chart: Types of Remainders 58 Chart: Types of Vested Remainders 59 Chapter 8 Types of Executory Interests 61 Explanatory examples 61 Summary of Main Points 64 Chart: Types of Executory Interests 65
7 beck 00 cx p Page vii CONTENTS vii Chapter 9 Transferring Estates & Future Interests 67 Explanatory examples Summary of Main Points 80 Chart: Transferability of Present Estates 82 Chart: Transferability of Future Interests 82 Chapter 10 Formalities & Rules of Construction for Creating Estates and Future Interests 83 General rules of construction 83 Basic vocabulary 84 Explanatory examples 85 Formalities for creating specific estates 87 Creation of future interests 91 Explanatory examples 92 Summary of Main Points 93 Chart: Words of Art for Creating Estates 98 Chapter 11 Distinguishing between a Condition Precedent & a Condition Subsequent 99 Some general rules of construction 99 Explanatory examples 101 Summary of Main Points 106 Chart: Overview of Conditions 108 Chapter 12 Alternative Contingent Remainders 109 General rules 109 Explanatory examples 110 Summary of Main Points 113 Chapter 13 Limitations on Future Interests: Doctrine of Destructibility of Contingent Remainders & the Merger Doctrine 115 Doctrine of destructibility of contingent remainders 115 Failure to vest 116 Merger 116 Modern status of the doctrine of destructibility of contingent remainders 119 Explanatory examples failure to vest 119 Explanatory examples merger 123
8 beck 00 cx p Page viii viii CONTENTS Summary of Main Points 126 Chart: Doctrine of Destructibility of Contingent Remainders 128 Chart: Consequences of Doctrine of Destructibility of Contingent Remainders being Abolished 128 Chapter 14 Limitations on Future Interests: The Rule in Shelley s Case 129 When does the rule apply 129 What does the rule do 130 Modern status of the rule 130 Explanatory examples 130 Summary of Main Points 134 Chart: Summary of the Rule in Shelley s Case 135 Chapter 15 Limitations on Future Interests: The Doctrine of Worthier Title 137 When does the doctrine apply 138 What does the doctrine do 138 Modern status of the doctrine 138 Explanatory examples 138 Summary of Main Points 140 Chart: Summary of the Doctrine of Worthier Title 142 Chart: Comparison of the Rule in Shelley s case & the Doctrine of Worthier Title 143 Chapter 16 Limitations on Restricting Property Rights: Restraints on Alienation & Marriage 145 Direct restraints on alienation 145 General rules 146 Explanatory examples 147 Direct restraints on marriage 149 Explanatory examples 149 Summary of Main Points 152 Chart: Direct Restraints on Marriage 154 Chart: Direct Restraints on Alienation 155
9 beck 00 cx p Page ix CONTENTS ix Chapter 17 Limitations on Future Interests: The Rule Against Perpetuities 157 Interests subject to the RAP 157 Explanatory examples Alternate statement of the RAP 161 Applying the RAP When 162 Finding measuring lives and validating lives 162 What is the perpetuities period 163 What happens to interests that violate the RAP 163 Things to keep in mind when applying the RAP 164 Explanatory examples 165 The RAP and class gifts 172 Explanatory examples 173 Modern status of the RAP cy pres 185 Explanatory example 185 Modern status of the RAP wait & see 185 Explanatory example 186 Modern status of the RAP A combined approach 186 Explanatory examples 187 Summary of Main Points 189 Application of the common law RAP in a Nutshell 193 Chapter 18 Sample Exam Questions with Answers & Explanations 195 Sample Exam Questions 195 Answers and Explanations 207 Index 217
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11 beck 00 cx p Page xi Preface E s t a te s, f utu re interests and the rule against perpetu i ties are topics wh i ch h ave con f u s ed stu dents for gen era ti on s. This book is de s i gn ed to demys tify this su bj ect are a. The goal is to provi de the re ader with a basic understanding of this su bj ect matter to en a ble su f fic i ent mastery of the material to correct ly ans wer qu e s ti ons abo ut this material on a law sch ool exam and on the bar ex a m. This book is not inten ded to be a com preh en s ive tre a tm ent of these su b- j ects wh i ch ad d resses all the idiosyncrasies of this area of l aw. Nor is it inten ded to provi de an historical overvi ew of this area of the law. The history of this area of l aw, a l t h o u gh intere s ti n g, does not fac i l i t a te a basic understanding of how to apply this law today. Therefore, this book focuses on the modern common law applications of this law. It should be kept in mind that the focus is on the common law since this is t ypically tested both on law school exams and on the bar exam. Many states have statutorily modified the common law so this book should not be rel i ed on as an acc u ra te source of m odern law in a particular ju ri s d i cti on. Nevert h el e s s, wh ere sign i ficant ch a n ges in the com m on law are perva s ive they are noted. One of the more difficult aspects of this area of law is learning the definiti ons of the nu m erous unique terms that have devel oped specific meanings over the cen tu ri e s. To ease this task important terms are high - l i gh ted and clearly defined. Typically, examples follow the definition to illustrate and rei n force what a term means. Ad d i ti on a lly, nu m erous ex p l a n a tory examples are used throughout the book to provide a clear understanding of the material. I have used certain conventions throughout the book. O refers to the original land owner. Unless otherwise stated, O owns a fee simple absolute in the land. [ You wi ll know what a fee simple absolute is when you finish studying this book!] Bl ack ac re is a name of the land invo lved in all the tra n s acti ons in this book. xi
12 beck 00 cx p Page xii xii PREFACE Reference to A, B, C, C1, C2, etc. refers to a living person. The final ch a pter inclu des sample exam qu e s ti ons for te s ting your understanding of the materi a l. An s wers with det a i l ed ex p l a n a ti ons are also provi ded. F i n a lly, I would like to thank Profe s s or Steph en C. Vel tri of Ohio Nort h- ern Un ivers i ty Pet tit Co ll ege of L aw for his hel pful com m ents and su gge s ti on s in writing this book, and Associate Dean Bernard V. Keenan of Suffolk Univers i ty Law Sch ool for revi ewing porti ons of this boo k. An d, most importantly, I want to thank Ruth who provides inspiration and support for all my endeavors. If you have any com m en t s, su gge s ti ons or qu e s ti ons feel free to con t act me. Professor Andrew Beckerman-Rodau Suffolk University Law School Boston, MA arodau@suffolk.edu
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