Property a Estates & Future Interests Exam

Property A Estates & Future Interests Exam:

Answers & Explanations

Overall, you did a little less wellon this test than the last couple of classes. The median was 20, the mean was 18.3, two students got perfect scores, but 16of you (about a quarter of the class) got fewer than 16/24 correct.

The questions and answers are laid out below. Grants and correct answers are in bold type. My comments are in italics.

(1) All of the following were true “at common law” except:

This is Fall 2007 Question 24, which was a slight variation on Exam Bank Question 48.

(a) Courts recognized the traditional estate of fee tail.

(b) The default present possessory estate was the life estate.

(d) Executory interests were not permitted. Before 1536, no executory interests were allowed. Since 1536, through the period we describe as “at common law,” both kinds of executory have been allowed. 95% of you chose this answer making it the third easiest question on the test.

(2) Which of the following future interests is initially held by the grantor?

This is Exam Bank Question 2.

(a) Contingent remainder in life estate.

(b) Right of entry. 100% of you chose this answer (which rarely happens), making it the easiest question on the test.

(d) Springing executory interest.A springing executory interest cuts off the grantor’s interest, but is always held by a third party, not by the grantor.

Question 3 is based on the following information: In her valid will in 2012, Alina grants Red-acre: “To Bijal for life, then to my children for their lives, then to Bijal’s heirs.”

This is Fall 2007 Question 22. Students have had trouble with this type of question because of a failure to think through the logic of the problem. The grant is in Alina’s will, which means she is dead, which means that any children she is ever going to have are already born.

(3) Which of the following interests is created by the grant?

(a) Contingent remainder in life estate Alina’s children if there are none alive at the time of the grant.If no children survive Alina, the interest simply fails; it is not contingent because no more can be born. 15% of you chose this answer.

(b) Vested remainder in life estate subject to open in Alina’s children if any are alive at the time of the grant.The vested remainder is not “subject to open” because no more children can be born. 13.3% of you chose this answer. Note that if Alina were still alive, both (a) and (b) would be correct, which should have given you a clue to go back and reread the problem instead of choosing one of them.

(c) Vested remainder in Bijal’s heirs.A remainder in the heirs of a living person is always contingent. 21.7% of you chose this answer.

(d) None of the above. 48.3% of you got this right, making it the second hardest question on the test, which is a little disappointing for a question that was an exact rerun.

Questions 4-6 are based on the following information: In 1990, Connie left Stone-Acre in a valid will, “to my husband for life, then to my son Dave and his heirs, but if, 3 years after my husband’s death, Dave is unmarried, to my daughter Jessica and her heirs.” The will then gave all Connie’s other property to Jessica in the Residuary Clause.

These are slight variations on Exam Bank Questions37-39.

(4) Assuming the condition is valid, which of the following interests exist at the time of the grant?

(a) Alternative contingent remainders in Dave and Jessica. The interest in Jessica cannot be a remainder because it cannot become possessory until three years after the end of the life estate. The interest in Dave is not contingent, because there is no precondition to his taking possession of the property except the termination of the prior life estate.

(b) Vested remainder subject to divestment in Dave.The vested remainder is not “subject to divestment” because it cannot divest Dave until three years after Dave has taken possession.

(c) Vested remainder in fee simple on executory limitation in Dave. This is correct because when Dave takes the property, he will be subject to a condition that subsequently can cut off his fee and transfer his interest to another grantee. 80% of you chose this answer.

(d) Reversion in Connie that passes to Jessica through the Residuary Clause.There is no reversion because Dave’s remainder is vested.

(5) Which of the following arguments would not be relevant to the question of whether the condition should be considered void as against public policy?

(a) At the time Connie died, Dave lived in a small town. In 1990, it seems unlikely that this fact would be sufficient to say that “Find a partner in three years” is unreasonable. Today even people who live in small towns usually come in contact with lots of other people in the course of work, travel, community events, and especially the internet. 91.7% of you chose this answer, making it the fifth easiest question.

(b) Dave is not prevented from marrying the person of his choice.As we discussed in class, the argument for unreasonableness probably is strongest if it involves breaking up an existing relationship or unduly narrowing the number of possible spouses. Neither is true here.

(c) Dave was 9 years old at the time Connie died. If this were true, the condition might force him to marry by age 12 to get the property. A court is likely to view that as against public policy and in many states it would beunlawful.

(d) The rest of Connie’s husband’s life plus three years is a reasonable amount of time to find a spouse. Given that Shapira focuses on the reasonableness of the restraint and finds 7 years sufficient to find a Jewish woman, you could certainly argue that three years plus the mother’s life is reasonable to find any woman at all.

(6) Suppose Dave marries Laura in 2005. In 2006 Dave dies, leaving all his property to Laura in a valid will. In 2008, Connie’s husband dies. In 2011, on the third anniversary of Connie’s husband’s death, Jessica sues Laura for title to Stone-Acre. Which of the following arguments is not relevant to who owns Stone-Acre?

(a) The condition was void as against public policy.If the court finds the condition void, Jessica will take nothing.

(b) Connie’s intent regarding Dave’s acts was satisfied because Dave got married and stayed married until his death.Grantor’s intent arguments are important in interpreting ambiguous grants. Here, this seems a reasonable interpretation of the language.

(c) Dave and Laura have a child Maria, who was one of Dave’s heirs under the relevant intestacy statute.The grant to “Dave and his heirs” gives Dave a remainder in fee simple but creates no rights in the heirs. Dave can and did leave his vested remainder to Laura in his will, so again Maria has no claim. 86.7% of you chose this answer.

(d) Dave is literally unmarried in 2011, because Laura cannot be legally married to a dead person. This would seem to be a valid argument from the literal language of the grant. The grantor could have said “has never been married” but instead chose “is unmarried.” You should not shy away from literal arguments; lawyers make them all the time.

Question 7 is based on the following information: In 2013, Pat grants Maroon-acre “to Rafael for life, then to Steve so long as he operates a gambling casino on the property, otherwise to Trevor.”

This is Spring 2013 Question 13, but the condition is changed from growing marijuana to running the casino. Its validity similarly depends on the law of the jurisdiction. If the casino is illegal, we would pencil out the condition, leaving Steve with a vested remainder fee simple absolute. If the casino is legal, Steve has a vested remainder in fee simple on executory limitation.

(7) At the time of the grant,Steve has

(a) A vested remainder in fee simple determinable, if operating a gambling casino is legal in the jurisdiction. This is incorrect because the future interest is held by a grantee, not by the grantor.

(b) A vested remainder subject to divestment, if operating a gambling casino is legal in the jurisdiction.This would be true if it were possible for Steve to violate the condition before he comes into possession of the property, but this sort of condition clearly is intended to address Steve’s behavior only after he takes possession.

(c) A vested remainder in fee simple absolute, if operating a gambling casino is not legal in the jurisdiction. 80%of you chose this answer.

(d) Nothing, if operating a gambling casino is not legal in the jurisdiction. If the condition is invalid, we pencil out the condition, not the underlying remainder.

Question 8 is based on the following information: In 2013, Amanda conveys Orange-Acre “to Brett for life, then to Cristy and her heirs, but if Brett is survived by any children, then to such surviving children and their heirs.”

This is Problem 4N.

(8)Which of the following interests exist at the time of the grant?

(a) Life estate on executory limitation in Brett. The interest in the children could only vest at the moment of Brett’s death, so it cannot cut off the life estate.

(b) Vested remainder subject to divestment in Cristy. This is vested because it goes to a named person and there is no condition in the clause that creates the interest. The condition is on the children taking. However, because Cristy could lose her interest at Brett’s death (before she ever comes into possession), we use this terminology. 70% of you got this correct.

(c) Contingent remainder in Brett’s children who survive him, if Brett does not yet have any children. Because the interest in Cristy is a vested remainder, the children’s interest must be a shifting executory interest. You cannot have both a vested and a contingent remainder arising at the end of the same life estate. 20% of you chose this answer.

(d) Reversion in Amanda. Again, because the interest in Cristy is a vested remainder, there is no room for a reversion.

Question 9 is based on the following information:In 2011, Mike conveyed Green-Acre “To Anta for life or until Anta divorces, then to Brittany & her heirs."

This is a new question based on a problem on page 79 of the Workbook that I put on a slide.

(9) Which of the following interests is created by the grant?

(a) Life estate determinable in Anta.This would be true if the future interest were held by the grantor instead of by Brittany. Instead, Anta’s interest is a life estate on executory limitation. 31.7% of you chose this answer.

(b) Reversion in Mike. The grant is worded in a way that gives the future interest to Brittany whether or not the condition is violated.

(c) Shifting executory interest and vested remainder in Brittany that would merge into a vested remainder. The merger here captures the idea that Brittany will take after Anta’s interest no matter what. 56.7% of you got this correct, making it tied for the fourth hardest question on the test.

(d) None of the above.

Questions 10-12 are based on the following information:Leslie died in 2012 leaving a valid will that included the following language: “I leave my sister Michelle my house so that she will always have a place to live, but if Michelle ever moves out of the house, then to my cousin Brenda. I leave my car and my jewelry to Brenda. I leave the remainder of my property to my friend Zevi.”

The grant and Questions 10-11 arevariations on Spring 2013 Questions 17-18, roughly based on White v. Brown.

(10) Which of the following arguments support treating Michelle’s interest as a defeasible fee simple (as opposed to a defeasible life estate)?

(a) There is no “gift over.” This is a new answer. It would support characterizing the interest as a fee simple (seeWhite) if it were true here, but the residuary clause is a gift over.

(b) The grant of the house is worded differently from the grant of the car and jewelry. This fact supports treating Michelle’s interest as a life estate, since the differences tend to indicate that the interest in the house is more circumscribed (seeWhite dissent).

(c) Michelle’s interest could be cut off by Brenda’s interest. Although this is factually correct, it would be equally true whether Michelle’s interest is a life estate or a fee, so it doesn’t tell us anything about which characterization to employ.

(d) There is a presumption in favor of the fee simple.This presumption exists in all jurisdictions and is the strongest argument on this side of the issue. 93.3%of you got this right, making it the fourth easiest question.

(11) What is Zevi’s interest in the house?

(a) If a court holds that Michelle has a defeasible fee, Zevi has a possibility of reverter. Zevi would not get a possibility of reverter because, if the condition is violated, the property goes to Brenda.

(b) If a court holds that Michelle has a defeasible fee, Zevi has nothing. If Michelle has a defeasible fee, Brenda holds a shifting executory interest, and no interest remains for Zevi to hold in the house. 71.7% of you got this right.

(c) If a court holds that Michelle has a defeasible life estate, Zevi gets both a possibility of reverter and a reversion that merge into a reversion.Same as (a).

(d) If a court holds that Michelle has a defeasible life estate, Zevi has a vested remainder.If the grant to Michelle is treated as a life estate, Leslie retained the reversion herself, and it then passes to Zevi through the residuary clause. Zevi thus gets a reversion, because no remainder is expressly created. This is like Problem 4O.

(12) In 2015, your client, the Halperin Development Corporation (HDC), is putting together a large parcel of land to construct a mixed-use residential and commercial complex. HDC would like to purchase the land containing the house that Leslie left to Michelle and make it part of the complex. All of the following would be useful steps for you to take to advise HDC about this purchase except:

This is the new “advice” problem I promised you.

(a) Determine if Michelle still lives in the house. If she does not, then (assuming the condition is valid) HDC only has to deal with the future interest holders.

(b) Determine if Brendawould be willing to sell her interest in the land. Again assuming the condition is valid, HDC would have to purchase Brenda’s interest if they wanted a fee simple absolute. 15% of you chose this answer.

(c) Determine if HDC would be willing to guarantee Michelle a “place to live” in one of its new residential units.Although the stated purpose of the condition was to provide Michelle with a home, the wording of the condition awards ownership to Brenda if Michelle moves out regardless of whether Michelle has another place to live. Thus, this type of offer by HDC would not give them more ability to control the land in question. 56.7% of you got this correct, making it tied for the fourth hardest question on the test.

(d) Determine if HDC could construct its complex while leaving the house in place. If so, Michelle could continue to live in the house while HDC used the land around it and her interest would not immediately end. 23.3% of you chose this answer.

Questions 13-15 are based on the following grant:In 2014, Cassandra’s valid will granted Purple-acre “to my friend Dan only if he lights a candle on the property once a week in my memory, but if he ceases to do so, the property should be retaken.”

These questions are another variation on Sample Questions 5-7 & 51-53, most closely based on Fall 2005 Questions 14-16.

(13) Which of the following arguments support characterizing Dan’s interest as a fee simple determinable (as opposed to a fee simple on condition subsequent)?

(a) The condition requires Dan to act on a continuing basis. This is true of many conditions that are in the form of a fee simple determinable such as the one in Mahrenholz itself.

(b) The future interest was retained by the grantor.This is true both of the fee simple determinable and the fee simple on condition subsequent, so it does not help you decide between them.

(c) Most states have a presumption in favor of the fee simple determinable.This is incorrect; most states have a presumption in favor of the fee simple on condition subsequent.

(d) The grant uses the word “only.”Mahrenholz uses this argument in support of its conclusion that the grant before it is a fee simple determinable. 90% of you got this right.

(14) All of the following arguments support characterizing Dan’s interest as a fee simple on condition subsequent (as opposed to a fee simple determinable) except:

(a) It will be almost impossible for a court to determine whether Dan has violated the condition. This is an argument that normally supports treating a grant as a fee simple on condition subsequent (like the case about building the hospital cited in Mahrenholz). However, on these facts, if Dan stops lighting candles, it will be relatively easy to determine that there has been a violation. 88.3% of you got this right.

(b) The grant is structured in two parts.As we discussed in the context of Mahrenholz, this structure supports treating the grant as a fee simple on condition subsequent