Welcome back to the Deep Dive. Today we are not just talking
about laws, we are talking about the invisible grid that covers
every single square inch of the planet.
It really is. It's the operating system of the
physical. World exactly.
We are tackling estates and future interests and I know what
some of you are thinking. You hear property law and your
mind goes to, I don't know, closing costs on a condo or
maybe a fight over a fence line. Sure, the practical stuff.
But looking at these materials, the treatises the bar prep
outlines, this is so much weirder than that.
This is about time travel. It is about ghosts controlling
land from beyond the grave. It really is.
I always call it the Grand Central Station of the legal
world. If you're a law student, this is
the architecture that holds up well.
Everything else I say, well, if you don't get this, you can't
really understand trusts. You can't understand why your
landlord has the right to evict you, and you certainly can't
understand how generational wealth is, you know, built or
destroyed over time. And our mission today is to
decode that architecture. We're going to take this stack
of once, frankly archaic rules. I mean, some of these date back
to feudal England, and we're going to try to synthesize them
into a single coherent narrative.
Right, The plan is to move from present earnership, what you
have right now, to the future, what someone else might get down
the road. Then we tackle the final boss,
the rule against perpetuities. The RAP.
I have heard this described as the section of the bar exam that
makes grown adults weep. That is not an exaggeration.
I've seen it happen. It is the most heavily tested,
highly technical and, you know, completely unforgiving area of
the common law. But the secret is, it's also a
logic puzzle. If you know the rules, you can
beat it. OK, before we start laying
bricks, we really need to frame the stakes here.
The source material we're working from highlights 3 core
challenges that make this specific topic such a nightmare
for students. Right.
And the first one is all about precise language.
In normal life if I say hey I'm giving this house to my cousin,
everyone gets what I mean. Simple enough.
In property law, that sentence is a complete disaster waiting
to happen. You have to parse every single
word in a deed or will with surgical precision.
A single word, sometimes just a comic in shift a multi
$1,000,000 inheritance into absolutely nothing.
It honestly feels like coding. One wrong line of syntax and the
whole program just crashes. That is a perfect analogy.
It really is. The second challenge is what the
guides call temporal sequencing. The timeline.
Most people view property as,
you know, dirt on the ground, a physical thing.
You have to start viewing it as a timeline.
Who gets the baton and exactly when do they get it?
It's all about the sequence of events.
And the third one is the interaction of interests.
This is one that really blew my mind when I first encountered
it. The idea that you can have 3/4
or maybe 10 different people all holding an interest in the same
piece of land at the exact same moment.
Yes, and they all own something. One person might be living there
right now, in the present. Another person has the right to
kick them out, but only if they, say, start a fire.
A third person has a right to the property that won't even
kick in until the year 2080. And a fourth person has a right
only if that third person dies without any children.
They all own a piece of the puzzle right now, but their
bundles of rights are completely different.
It's like a layering of different realities on one spot.
That's a great way to think about.
It. So let's start at the very
bottom. The foundation, yeah.
The. Absolute Baseline of ownership.
The fee simple absolute. This is it.
This is what 99% of people mean when they say I own my house.
It is the highest, most complete form of ownership known to the
law. The definitions I'm seeing
describe it as having a potentially infinite duration.
It's perpetual, it's freely transferable, it's divisible
which means you can leave it in a will, and it's inheritable.
Correct. It is the whole bundle of
sticks, as they say everything. But here is where we immediately
hit that first challenge. Precise language.
How do you actually create this thing?
Because under the old common law, you couldn't just say to
Alice, you had to use magic words.
You did, You had to say to Alice and her heirs.
OK, let's stop right there and unpack and her heirs, because
materials are practically screaming that this is a massive
exam track. When I write to Alice and her
heirs, does Alice's son Bob get an interest in the land right
now? Absolutely not, and this is the
crucial distinction you have to master between words of purchase
and words of limitation. OK, break that down.
To Alice are words of purchase that tells us who is getting the
land. The purchaser and her heirs are
words of limitation. They just define the size or the
duration of the estate Alice is getting.
It's historical shorthand for Alice is getting the biggest
estate possible, the fee simple. So the heirs get nothing.
Not a thing. 0 zip. A living person has no heirs.
You only have heirs the moment you die.
So if Alice gets this grant of land on Tuesday, and on
Wednesday she decides to sell it to a developer to build a
shopping mall, her children cannot sue.
They had no legal interest. They just had a hope.
What the law calls a mere expectancy.
I have to assume modern law has, you know, chilled out on this a
bit. We don't still require those
magic words, do we? Thankfully, no.
Today, in pretty much every US state, if you just write to
Alice, the law presumes you meant to convey a fee simple
absolute. We default to the biggest
possible estate. But, and this is a big but for
exams, right? If you are looking at an old
deed or more likely a bar exam question that's written to test
this, you have to look for and his heirs.
OK. And just to be crystal clear, is
there any future interest that accompanies a fee simple
absolute? No, that is the whole point of
it. It lasts forever.
There is no remainder for someone else, no reversion back
to the grantor. The timeline is full.
It's done. Got it.
OK, before we move into the really complicated stuff, the
outline says we have to mention the dinosaur of the room, the
fee tail. The fee tail.
You will almost never see this in modern practice in the US,
but it explains so much about history and frankly it explains
the plots of half the Jane Austen novels or shows like like
Downton Abbey. Right, the whole entail drama.
The language for this one is to A and the heirs of his body.
The heirs of his body. It sounds very biological.
It sounds like something out of Game of Thrones.
It effectively is. The fee tale was designed by
medieval aristocrats to keep land in the family bloodline
period. It passes directly to your
lineal descendants, your kids, your grandkids, and so on.
You could not sell it outside the family.
You could not alienate it. So if I'm the Lord of the Manor
and I hold the estate in Fetail, and let's say I'm completely
broke, I can't sell the land to pay my gambling debts.
Well, you can sell your life interest in it.
The person who buys it can use it for as long as you're alive.
But the moment you die, the land automatically snaps back to your
first born son. The buyer loses everything.
It was designed to ensure the great family estate stayed
intact for generations. But in the United States, we
hate that idea, right? Our whole system is built on the
idea that land should be easily bought and sold.
Exactly the court policies marketability of title.
So virtually all states have abolished the fee tail.
If you try to create 1 today, if you write to A in the heirs of
his body in a deed, the court will just cross it out and say
congratulations A you have a fee simple absolute.
And you can sell to whomever you want.
Sell it, mortgage it, do whatever you want with it.
OK, dinosaur buried. Now let's move to where the real
trouble begins for students. The defeasible fees.
The outline calls this the Triage Strategy.
This is huge, and triage is the right word.
A de feasible fee is ownership that is conditional.
It looks like a fee simple. It feels like a fee simple, but
there's a catch. There's a string attached.
It's like saying here are the keys to a new car, but on the
strict condition that you never drive it past 50 mph.
Perfect analogy. If you violate that condition,
you can lose the property. It's de feasible, meaning it can
be defeated. Let's walk through them.
First up, fee simple, determinable or FSD.
Right, the hallmark of the FSD is time, the magic words.
You are looking for all durational words like so long
as, until, while, during. Do you mean an example?
Sure, a classic one is to the school board, so long as the
land is used for a playground. OK.
So long as that's our trigger, Hase.
Now here's the crucial question about the mechanism.
The school board gets the land, 10 years go by, they're short on
cash, so they decide to Ave. over the playground and build
the arking lot to generate revenue.
What happens at that exact moment?
Boom, automatic termination. Automatic They don't need a
lawsuit. They don't need a notice.
No lawsuit needed. The school board's ownership
ceases to exist the second the first paver goes down on that
playground. The property title snaps back to
the original Grand Tour like a rubber band.
And that snapback, that thing The Grand Tour was holding all
along, that has a name, it's a future interest.
It's called the Possibility of Reverter, and reverter is a
great memory aid because it implies an automatic return.
It just reverts, no action required.
OK, so FSD, durational language, automatic termination,
possibility of reverter. Now let's compare that to the
second type, the fee simple subject to condition subsequent
FSSCS. Right, this one does not use
time words, it uses conditional words.
You're looking for phrases like but if provided that on
condition that. So using our example it would be
to the school board, but if they stop using it for a playground.
Sounds very similar, right? But the legal mechanism is a
whole different ball game. If the school board builds that
parking lot, the estate does not end automatically.
It doesn't. No, the violation of the
condition just gives the Grand Tour the option to take the
property back the right to act. School board is technically
still the owner even though they've broken the rule.
They haven't been divested of title yet.
Correct. They remain the owner in fee
simple until the grantor takes some kind of affirmative action,
files a lawsuit for rejectment, or makes a formal reentry onto
the land to reclaim it. In the future, interest here
obviously isn't a possibility of reverter, it's something else.
No, because it's not automatic. It's called a right of entry or
sometimes a power of termination.
The name tells you exactly what it is.
You have the power to terminate the estate, but you have to
choose to use it. It's not a self executing
process. Now this is where the exam tip
from the outline comes in, and this is where the rubber really
meets the road for a law student.
Why does this difference between automatic termination for an FSD
and elective termination for an FSSCS actually matter?
Why should a listener care? Adverse possession.
This is the big one. Imagine the school board builds
that parking lot in 1990. The statute of limitations for
adverse possession is, say, 20 years.
OK. If the original grant was a fee
simple determinable, the forfeiture was automatic.
The school board ceased to be the rightful owner in 1990.
From that moment on, their possession of the land was
hostile to the grantor. They were basically trespassing.
So the clock for adverse possession starts ticking
against the The Grand Tour immediately in 1990.
Immediately, if the Grand Tour is asleep at the switch and
doesn't notice for 20 years, too bad.
The school board might now own the land again, but this time in
fee simple absolute through adverse possession.
Wow. But what if it was a fee simple,
subject to conditions subsequent?
Well, the school board is still the rightful owner until the
Grand Tour exercises their right of entry.
So the clock for adverse possession generally does not
start to run until the Grand Tour actually demands possession
back and is refused. The Grand Tour could
theoretically wait much longer before acting, and the statute
of limitations wouldn't have run out.
So that is a huge, huge distinction.
It effectively means the grantor who used the automatic FSD
language is at a higher risk of losing the land forever if they
aren't paying close attention. Precisely.
It's a major trap. OK.
The third and final type in our defeasible fee triage.
The fee simple subject to executory limitation.
This is the rude one. In the first two types, if the
condition is broken, the property goes back to the Grand
Tour. It reverts or the Grand Tour can
reenter. In this one, if the condition is
broken, the property goes to a third party.
So to the school board, so long as it's used as a playground,
but if it ceases to be used as a playground, then to the General
Hospital. Exactly.
The General Hospital is a third party, a transferee.
They hold the future interest and because it's a third party
that's going to take possession, we call that future interest an
executory interest. Why executory?
What does that mean? Think execute.
It cuts off the previous owner. It doesn't wait for the estate
to end naturally. It executes the prior estate.
It divests it. OK, that makes sense.
Before we move on from these, I want to touch on the defenses
the outline mentions. Let's say I granted land 50
years ago, so long as no alcohol has ever sold on the premises.
But now the entire neighborhood is a trendy district full of
bars and restaurants. Can the Grand Tour's air still
enforce that? Maybe not.
Modern courts, especially in places like California, really
dislike these dead hand controls on land.
They value marketability and efficient land use, so they
might apply a number of equitable defenses.
Like what? Well, what is obsolescence or
changed conditions? The court could say, look, the
purpose of this condition is gone.
The neighborhood has completely changed.
Enforcing this no longer provides any real benefit to the
Grand Tour. So it's just a nuisance at that
point. Exactly.
Another is latches. That's an equitable doctrine
that basically says you waited too long to assert your right.
If the violation happened 10 years ago and you never said a
word, you can't just show up now and complain.
Or even public policy. Right.
If the condition is an unreasonable restraint on
alienation, meaning it makes the land basically impossible to
sell, or if it violates public policy, like a condition based
on racial discrimination, the court will just avoid the
condition itself. It makes sense.
Property law wants land to be used productively, not locked up
by ghost stories from 1920. Exactly.
The law, at the end of the day, generally favors the free use of
land by the living over the restrictions imposed by the
dead. Speaking of current versus
future owners, let's move to the section of the outline that
usually involves the most personal family drama life
estates. To a for life, this is an estate
that is measured not by time, but by the heartbeat of a
specific human being. It's temporary ownership.
You get it until you die, and then it's over.
Or, and this is where it gets a little strange, you can measure
it by someone else's life. That's called a life estate.
Pure card fee. That's French for for another
life, for example, to A for the life of B.
Which leads to a morbid but very common exam question.
If I hold a life estate Pruotrovie, so I own the land
for as long as you are alive and I die before you do, what
happens to the land? Well, the measuring life, your
life is still going, so the estate isn't over.
My interest, which is the right to the land for the rest of your
life, actually passes to my heirs through my will.
They get to keep the land until you finally kick the bucket.
It's a temporary inheritable asset.
Now Every life estate has a pairing.
It has a partner. If I give a life estate to AI
have to say where the rest of the timeline goes.
Someone has to get it after a dies.
Right, the timeline must be full, and there are two
possibilities. If the property comes back to
me, the grantor, after A dies, then I'm holding a future
interest called a reversion. If I direct it to go to someone
else, say to be after A dies, then that third party B holds a
future interest called a remainder.
And this relationship, the one between the life tenant who has
the property now and the remainder man who gets it later,
creates immediate built in conflict.
Absolutely, The life tenants incentive is short term.
They want to extract maximum value.
Now let's cut down all the ancient oak trees and sell the
timber. The remainder men has a long
term incentive. They want the property to be
pristine when they get it later. Don't you dare touch my future
trees. Enter the doctrine of waste.
This is the set of rules that acts as the referee for that
conflict. It's the law stepping in to
balance those competing interests.
The airline breaks this down into three species of waste.
First, voluntary waste. This is active affirmative
destruction, overt conduct that decreases the value of the
property. You can't burn down the house,
you can't smash all the windows, and historically you couldn't
just strip mine the land for its minerals.
But wait, what if the land is a coal mine?
What if that's the only real value it has?
Can the life tenant use it? That's a great question, and
there's a specific rule for natural resources.
The general rule is that a life tenant cannot exploit resources
like coal, oil, or timber unless they fit into one of the
exceptions. The mnemonic that students use
is PRG. OK, let's walk through PRG.
So PU stands for Prior use. This is also known as the Open
Minds doctrine. If the mine was already open and
active before the life estate was created, the law assumes the
grants were intended for the life tenant to keep mining.
You can continue the existing operation even to depletion, but
you cannot open new mines. OK, that seems logical.
What's next? R is for repairs.
The life tenant can cut a reasonable amount of timber to
say, fix the fence or repair the roof on the House.
That's considered good husbandry.
G is for grant. If the document that created the
life estate, the deed or the will explicitly says A has the
right to mine this land, then go ahead.
The grant itself gives permission and E is for
exploitation. This is a narrow one, but if the
land is literally useless for anything except for mining, like
it's a rocky quarry with no topsoil for farming, then the
life tenant may be able to exploit it.
Otherwise, the gift of a life estate would be worthless.
Got it. So that's voluntary waste.
The second type in the outline is permissive waste.
This is neglect. This is the life tenant simply
sitting on the porch swing while the roof leaks and ruins the
foundation. It's waste that results from a
failure to act. The life tenant has a legal duty
to maintain the property in a reasonable state of repair.
Does that mean they have to pay for everything?
A whole new roof. The standard is that they have
to pay for ordinary repairs to keep the property wind and water
tight. And critically, they have to pay
the carrying costs of the property.
That means property taxes and the mortgage interest.
Just the interest on the mortgage, not the principal.
Correct, that's the standard split.
The life tenant pays the interest which is seen as the
cost of renting the money for the property.
The remainder men who will eventually get the benefit of
the paid off property is responsible for the mortgage
principal. That seems like a fair division
of the burden. Now the third type, ameliorative
waste. This is the tricky one.
This is when the life tenant makes changes to the property
that actually increase the value.
Like, that seems incredibly inefficient from an economic
standpoint. It is, which is why the modern
view has almost completely reversed that today a life
tenant is generally permitted to make substantial alterations and
even demolish old structures if local market conditions have
changed and the changes are something a prudent owner would
do to maximize the Land's value. But the life tenant can't charge
the remainder men for the upgrade, right?
I can't decide to build a swimming pool and then send the
bill to the person who gets the house in 20 years.
That's right, you can improve the property at your own
expense, but you generally cannot force the future owner to
pay for your renovation project. OK, we have arrived at the deep
end of the pool. This is the section on
classifying future interests. This is where students panic.
It feels like algebra and the names all sound the same.
But the episode guide gives us a very structured 3 step
hierarchical analysis, a decision tree.
The advice is if you follow this, you won't get lost.
Correct. Do not try to intuit this stuff.
Follow the steps religiously. Step one.
Identify the holder who has the future interest.
Is it the grantor or someone else?
Exactly, this is your first and most important cut.
Is the future interest held by the grantor or is it held by a
transferee, meaning any third party?
If it's the grantor, you can relax a little.
It's simple. There are only three
possibilities, A reversion, a possibility of reverter, or a
right of entry. We've already met two of those.
And the key thing is all of these are considered vested
interests. The rule against perpetuities
generally doesn't touch them. You're safe.
But if it's a transferee. Then the alarm bell should go
off. Now gets complicated.
It must be either a remainder or an executory interest.
And to tell those two apart, we have to go to Step 2.
Step 2. Does it follow natural
termination? Or, in plain English, is the
future interest polite? Exactly.
A remainder is polite, It stands in line.
It waits patiently for the preceding estate, like a life
estate to end naturally through death.
It never cuts anyone off and never divest the prior interest.
So if I say to A for life then to BB is just waiting for A to
die? 5 natural causes.
B isn't doing anything to push A out.
Brie has a remainder. Correct.
But now we have to go a level deeper and classify what kind of
remainder B has. Is it vested or is it
contingent? OK, let's run through the
different flavors of vested remainders first.
The first is an indefeasibly vested remainder to A for life
than to BB is an existing ascertained person.
There are no conditions B has to meet.
B is getting that land, period. Even if B dies tomorrow before
AB's heirs will get the land, when A eventually dies, it's a
sure thing. Right now for flavor #2 vested
remainder subject to complete divestment.
That sounds ominous. It means B has the right now,
but could lose it later if a certain condition happens, for
example to A for life, then to B.
But if B ever fails to pass the bar exam, then the property
shall go to C. So B is vested, he has the spot
in line, but there's this condition subsequent hanging
over his head that can strip it away before he ever gets
possession. Precisely, C holds an executory
interest that could divest B. And the third flavor of vested
remainder. Vested remainder subject to
open. This is the one for class gifts.
Right to A for life, then to A's children.
Let's say when the grant is made, A has one child, Bob.
Bob's remainder is rested. He's in, but A it's still alive.
A could have more kids, so Bob's share is subject to open to let
any new siblings in. If A has a second kid, Carol,
Bob's 100% share suddenly drops to 50%.
The size of his slice of the pie can shrink.
And there's a rule here about when the class stops growing,
the rule of convenience. Yes, this is a rule of, well,
convenience for administering property.
The class closes physiologically when the parent A dies, but it
can also close as a matter of law when any member of the class
can demand possession. What does that mean?
So when A dies, the life estate ends.
Bob, as a remainder man, can go to the court and say, give me my
share Now. At that point, the class closes.
We don't wait around for 20 years to see if A's frozen sperm
might produce more children. We close the circle so Bob and
Carol can get their property and move on with their lives.
OK, those are the vested ones. What makes a remainder A
contingent remainder instead? A remainder is contingent if one
of two things is true. First, the taker is unborn or
unascertained. For example to A for life, then
to A's heirs. A is alive, so he has no heirs
yet. We don't know who they are, so
their interest is contingent on them being born and identified.
Or second, there is a condition precedent.
This is a condition that must be met before the remainder men can
even get in line to A for life, then to B.
If B graduates from college, B hasn't graduated yet.
Graduating is a condition president to his interest even
becoming vested. That distinction between a
condition precedent and a condition subsequent is the
famous comma rule. Trap isn't.
It it is, it is incredibly pedantic, but it's something you
have to watch for on an exam. The grammar matters.
If the conditional language appears before the grant to the
remainder man is finished to be. If he graduates, it's a
condition precedent, which makes it a contingent remainder.
If the grant seems complete to be and then you see a comma and
a divesting clause. But if he drops out then to see,
it's a condition subsequent which makes it a vested
remainder subject to divestment. And one is that tiny grammatical
difference matter so much. Because the rule against
perpetuities loves to destroy contingent remainders, but it
usually leaves vested remainders alone.
It's a critical difference. Which brings us to step three of
our decision tree. We established that remainders
are polite and wait their turn. What if the future interest is
rude? Then it's an executory interest.
An executory interest does not wait patiently.
It cuts short another estate. It shoves its way to the front
of the line and divests the prior interest.
And there are. Two types of this rude interest
shifting and springing. A shifting executory interest
cuts short a transferee it divests another grantee.
The classic example to A, but if B returns from Rome, then to B.
The classic example A has the property and fee simple, but
then B comes back from Rome. B's interest doesn't wait for
A's estate to end, it cuts A's ownership short.
The interest shifts from one transferee A to another B.
And a springing executory interest.
A springing executory interest cuts short the grantor.
To A if and when he marries. Right now A is single, so who
has the land? The grantor holds it.
But if A gets married next year, the interest springs out of the
Grand Tour and goes to A, cutting the Grand Tour's holding
period short. The memory 8IN the outline here
is graphic but effective. An executor cuts off your head.
Right. It's a good way to remember an
executory. Interest cuts someone off.
If it cuts off another person, another transferee, it's
shifting. If it springs out from the Grand
Tour, it's springing. OK, we have built the
foundation, we have the language, the timeline, the
classification system. Now we have to face the monster
at the end of the book, The rule against perpetuities or RAP.
The file boss. Let's start with the philosophy.
Why on earth does this rule exist?
Is it just a mechanism to torture law students?
It certainly feels that way sometimes, but no, it's a policy
battle between the dead hand of past owners and the needs of the
living. Old English aristocrats wanted
to control their land forever. From the grave to my son for
life, then to his first son for life, then to his first son for
life. They wanted to create a dynasty
where the land could never be sold, ever.
Tying it up forever. Exactly.
And the courts eventually said no.
Society needs land to be marketable, We need it to be put
to its best and highest use. We can't have it goes from year
1600 telling us who owns a farm in downtown London in the year
2024. So they created a cut off a time
limit on how long a future interest can remain uncertain,
hanging in the air like a dark cloud over the title.
That's exactly what it is. And here's the rule itself.
No interest is good unless it must vest, if at all, not later
than 21 years after some life and being at the creation of the
interest. It sounds like a Riddle from a
fantasy novel. It's barely English.
It is a logic puzzle and the only way to solve it is to apply
a rigid methodology. The source guide gives us a
great one. Create kill count.
But before we even run that strategy, we have to remember
step one from the guide. Identify the interest.
RIP does not apply to every future interest.
Correct, this is a huge time saver on an exam.
The rule hates uncertainty, so it only applies to interest that
are not yet vested. Specifically, 1 contingent
remainders, 2 executory interests 3 and vested
remainders subject to open because we don't know for sure
how many people will be in the class.
If you have a reversion, a possibility of reverter, a right
of entry, or an indefeasibly vested remainder, you are safe.
Just right RIP does not apply and move on.
OK, so let's take a suspect interest from the outline to A
for life, then to the first of A's children to reach the age of
30. At the time of the grant, A is
alive and has one child, a 5 year old named Ben.
Let's run the method. Step one, create the interest.
We have a contingent remainder for an unknown child reaching
30. Right, it's contingent because
no child has yet reached 30. Now Step 2, identify the
validating life or is the guide says the measuring life then
kill them. Who is the measuring life here?
A is the measuring life. His life is relevant to the
condition because he's the one who can produce the children.
So for purposes of our logical test, we imagine that A drops
dead right now, at the moment the interest is created.
OK, A is dead now. Step 3 count 21 years.
We Fast forward 21 years from A's death.
The the question is, at that point, is it possible that we
still don't know for sure who gets the land?
Let's play it out with the worst case scenario.
Yeah. What if just before A died, he
had another child, a daughter named Carol.
So when A dies, Ben is five and Carol's a newborn.
Now we count forward 21 years. Ben is now 26.
Carol is 21. Has any child reached 30?
No. Do you know for sure if any
child will reach 30? No.
Ben could die in a car crash at 29 and Carol could die at 28.
So 21 years after the death of the measuring life A the
interest is still contingent. It's still hanging in the air.
We don't know who will take. So violates the rule.
It violates the rule, and the consequence of common law is
brutal. The entire gift to the first
child to reach 30 is void AB initio from the beginning.
You take a red pin, you strike that entire clause from the
deed, and you read what's left. Which would just be to A for
life. So after A dies it goes back to
the Grand Tour as a reversion. Precisely.
And this ruthless logic is what leads to those insane common law
assumptions. You said we have to ignore all
common sense. You have to leave common sense
at the door. The common law, to make sure the
rule is absolutely watertight, presumes 2 clinically insane
things. First, the fertile octogenarian.
The law conclusively presumes that an 80 year old woman or man
is capable of having another child.
Not at all. So if a grant is to my
grandchildren and the only living child is an 85 year old
daughter, you cannot say oh the class is closed because she
obviously can't have more kids. The common law says maybe she
can and that theoretical magically conceived baby could
be born after the grant. Live for a long time and throw
off your whole perpetuities timeline.
That's absurd. What's the second one?
The unborn widow. This is a classic bar exam trap.
A grant reads to my son a for life, then to his widow for
life, then to a surviving children.
It looks fine. A is married to Martha Marthy is
a life in being. But the term is widow, not
Martha. A could divorce Martha and A
could, years from now, marry someone else, someone who hasn't
even been born yet at the time of the grant.
The unborn. Widow.
Right. Imagine A divorces Martha and
marries a woman who's born next year.
Then a dies. Now this unborn widow who was
not a life in being at the grant has the life estate.
Let's say she lives for 80 years.
Then she dies and only then does the interest for A's surviving
children finally vest. That moment of vesting could be
80 years after A the life and being died.
That is way, way more than 21 years.
So the gift to A's children fails under the common law RAP.
That is just madding. You're telling me a multi
$1,000,000 estate plan could fail because of a theoretical
imaginary second wife who doesn't even exist?
Yes, that is the unforgiving ruthlessness of the common law
rule against perpetuities. Now, thankfully, modern law has
realized this is just stupid. Most states have reformed the
rule. Many now use a wait and see
approach. How does that work?
Instead of speculating about fertile octogenarians and unborn
widows, we just wait. The Uniform Statutory Rule
Against perpetuities, for example, gives the interest 90
years to see if it actually vests.
If it does within 90 years, great.
If not, then it fails. We deal with what actually
happens, not what might. Happen or they use Cypress right
where the court just rewrites the document to fix it.
Yes, that's another Reforma. The term means as near as
possible. If the grantor wrote to the
first child to reach 25 and that violates the rule, the court
will just take a pen and change 25 to 21 to save the gift and
honor the grantor's intent as nearly as possible.
OK, we have survived RAP. Let's finish up with something a
bit more relatable. Concurrent estates.
Co ownership roommates. Right.
How do multiple people own the same property at the same time?
The big two you need to know are joint tenancy and tenancy in
common. Let's start with joint tenancy.
The outline calls this the Vegas Marriage of Property law.
It has the defining feature the right of survivorship.
This is the absolute key. If you and I own a house as
joint tenants and I die, my share vanishes.
Poof. It is absorbed instantly and
automatically by you, the surviving joint tenant.
My will is irrelevant. My kids get nothing from the
house. This is great for avoiding
probate court. It's an automatic transfer, but
it could be terrible if you want to leave your share of the
property to your family. Exactly, and because of this
unnatural result of disinheriting errors, the law
makes it hard to create a joint tenancy.
You need what are called the four unities.
The mnemonic is TTIP. Let's breakdown T type PT.
Is for time. We must get our interests at the
same time. T is for title.
We must get our interests from the same document, the same
deed. I is for interest.
We would have equal identical shares. 5050, not 6040.
And P is for possession. We both have the right to
possess the whole property. And if you break any of these 4
unities at any point, you shatter the joint tendency it's
severed. Right.
And the mnemonic for severance is spam, sale, partition and
mortgage sometimes. Let's talk about sale.
If we are joint tenants and I secretly sell my half interest
to My Cousin Vinny without your permission.
Among you do that you have broken the unities of time and
title. The joint tenancy is severed.
It's destroyed, Vinny, and you are now tenants in common.
The right of survivorship is gone forever.
If you die, your share now goes to your heirs, not to Vinny.
OK. And what about mortgage?
This is the one that depends on the state.
Yeah, this is a classic majority minority rule issue.
If I take out a mortgage on my 50% share without telling you,
does that act of mortgaging sever the joint tenancy In a
title theory state, which is the old minority view, yes.
The mortgage is seen as an actual transfer of title to the
bank for security. Unity of title is broken
severance, but in a lien theory state, which is the overwhelming
majority of you today, No, a mortgage is just a lien.
It's a charge on the property, not a transfer of title.
The unities remain intact and the joint tenancy survives.
Good distinction. So then we have the alternative,
the tenancy, in common. This is the default form of Co
ownership. If a deed is ambiguous, if it
just says to A&B, the law presumes the grantor meant to
create a tendency in common. And its features are basically
the opposite of a joint tenancy. Pretty much there is no right of
survivorship. When I die, my share goes to my
heirs. The shares do not have to be
equal. I could own 99% and you could
own 1%. The only unity required is
possession. We both have the right to walk
on every inch of that land, regardless of our ownership
percentage. That right to possess the whole
brings up the concept of ouster. Right, since we both have the
right to possess the whole property, I can't charge you
rent just for living there while I choose to live somewhere else.
And you can't charge me unless I commit ouster.
Ouster is a wrongful exclusion. That means I change the locks, I
throw your stuff out on the lawn and I tell you get out and never
come back. The moment I do that, I have
violated your right of possession.
Now I owe you your share of the fair market rental value of the
property. And what about rent we get from
renting the property to third parties?
That you always have to share pro rata.
If I rent out a room in our shared house to a college
student, I cannot pocket all that cash.
I have to give you your percentage of the net profits.
Wow, we have covered a massive amount of ground from the fee
simple through the whole hierarchy of de feasible fees,
the drama of life estates and waste, the logic tree for future
interest, the absolute nightmare of RIP and finally the mechanics
of concurrent estates. It is a lot, but if you look at
the summary hierarchy from the guide it falls into a logical
pattern. Fee simple is the baseline.
De feasible fees introduce conditions, life estate, split
time, future interests fill in the gaps in the timeline.
RAP police is that timeline to prevent uncertainty and
concurrence dates split the ownership among people at the
same time. Before we sign off, you flagged
a final exam trap in the outline that connects all this to
recording acts. Yes, just briefly.
All these wonderful ownership interests are only truly safe if
they're properly recorded in the Public Land Records Office.
You have to watch out for the problem of the wild deed.
A wild. Deed.
A wild deed is a recorded deed that a searcher can't sign
because it's disconnected from the chain of title.
Imagine A sells to BB, doesn't record the deed, he just puts it
in his desk drawer. Then B sells to C&C, properly
records her deed. A future searcher looking up the
grander A won't find the A to B deed, and therefore won't find
the B to C deed. C's deed is wild.
It's out there, but it's off the grid.
C might lose the land to a later bonafide purchaser who buys
directly from A. And the shelter rule, that's a
protective rule. It says that if you buy a
property from a bonafide purchaser, someone who bought
honestly for value without notice of a Trier claim, you get
shelter under their protected status.
Even if you know about a prior bad claim.
If the person you bought it from didn't, you were safe.
It protects the marketability of their title.
Fascinating stuff. It really is a whole world.
I want to leave our listeners with a provocative thought.
We have spent an hour talking about Sizon and feudal concepts
from the 1600s, but think about the modern world of digital
assets, NFTS and the blockchain. Is a smart contract on a
platform like Ethereum which automatically transfers a
digital token if a certain verifiable condition is met?
Just a rigorously enforced executory interest.
It absolutely is. That's a brilliant connection.
A smart contract is effectively a fee simple, subject to an
executory limitation, but it's written in computer code rather
than. Indeed, the Oracle that verifies
whether the condition occurred is just the modern automated
equivalent of the court determining if the condition was
breached. The transfer is automatic and
ruthless, just like a shifting executory interest.
So the more things change, the more they stay the same.
The feudal architecture is still there, just in a new digital
form. Thank you for guiding us through
this maze. My pleasure.
It's a fun puzzle once you see how the pieces fit.
And to you, the learner, next time you walk past a building or
a plot of land, don't just see dirt and bricks.
Try to see the invisible layers of time and rights hovering over
it. That is the matrix of property
law. Thanks for listening to the deep
dive. All right, everyone, if you're
in law school, you've probably heard the horror stories about
estates and future interests. It always sounds like this
ancient, impossibly complex puzzle, right?
But here's the secret. It's really just a system, a
framework for slicing U ownership overtime.
And today we are going to crack that code together.
So here's our game plan. We're going to start with the
basics, the whole universe of what it means to own property.
Then we'll get into the feasible fees, you know, ownership with
strings attached. From there, we'll cover life
estates and the doctrine of waste, then dig into the nitty
gritty of future interests, telling the difference between
remainders and executory interests.
And Yep, we'll finish with the big one, the infamous rule
against perpetuities. Let's get into it.
All right. First up, the universe of
estates. Or to put it another way, how
long is forever? So let's kick things off with
the most basic question of all. What in the world is an estate
in land? You know, this is a concept that
trips up a lot of students and it's mostly because it's not
just about who's got the keys to the house right now.
The key thing to get, and I mean really get, is that we are
defining ownership across time. It's a temporal dimension.
So think of it like this. Imagine a timeline for a piece
of land. Every single grant we're going
to look at carves out a piece of that timeline for someone.
It tells you how long the current owner gets it and just
as important, who's next in line.
If you can master that idea of temporal sequencing, you are
well on your way to acing this part of the exam.
OK, Section 2, fee simple and a feasible fees.
This is where we talk about the baseline of ownership and all
the conditions you can attach to it.
So let's establish our starting point.
You know, the absolute baseline of ownership, the biggest, most
complete package of rights you can possibly have.
And then we'll see how grantors get clever and start attaching
strings to it. And here it is, the fee simple
absolute or FSA. This is your default setting.
It's the highest form of ownership there is.
So here's the exam tip. If you see a grant that just
says 2A or 2A, N is heirs and there is nothing else, no, so
long as no. But if that's it, it, it's a fee
simple absolute. Don't overthink it.
Don't go searching for conditions that aren't there.
This is total ownership. You can sell it, you can will
it, your heirs can inherit it. It is, for all intents and
purposes, forever. OK, that's simple enough.
But what if the person giving away the land wants to control
what happens to it even after they're gone?
You know, they want to reach out from beyond the grave and
dictate its use. Well, that's where we get into
what are called the feasible fees.
So in this example, the grantor has given the property away But,
and it's a big but, there's a string attached, a condition
that can make the school board lose the land entirely.
So this leads us to the core analysis for your exam.
What estate does the school board have and what future
interest does the grantor have? See every single one of these de
feasible fees creates 2 things at once.
A present estate and the person getting the land and a future
interest in someone else. Your entire job is to identify
both parts of that equation and the only clues you have, the
only thing that matters are the exact words used in the grant.
OK, this table right here, this is gold.
Seriously, this is your exam CHEAT SHEET for de feasible
fees. It all comes down to the magic
words. So look at that top row fee.
Simple, determinable. The magic words are durational
so long as while until. If you see those, you know two
things. One, termination is automatic.
The second, the condition is broken, poof, the estate is
over. And two, the future interest it
creates in the grantor is a possibility of reverter.
Now compare that to the second row, fee simple, subject to
condition subsequent. The words here are different,
they're conditional. But if provided that, and here's
the key difference, termination is not automatic.
The grantor has to actually do something.
They have to exercise their right of entry.
That distinction between automatic and elective
termination, it's everything on an exam.
And this brings us to a really important policy point.
You need to remember, courts absolutely hate making people
forfeit their property. They just don't like it.
So if the language in the grant is even a little bit ambiguous,
they will bend over backwards to avoid that forfeiture.
Their first move will be to try and read it as just a promise, a
covenant, instead of a condition that ends the estate.
But if they absolutely have to find a defeasible fee, they'll
almost always prefer the FSCS. Why?
Because it's not automatic. It forces the grander to take
action, which gives the current owner a chance to save their
estate. OK, part three.
Life estates and waste or ownership for a lifetime.
So we've talked about controlling property using
conditions, but what if the grantor wants to measure
ownership by time instead? Specifically by the length of a
human life? Well, that brings us right to
our next major topic, the life estate.
So when O grants 2A for life, what happens?
Well, here's the absolute number one rule for life estates.
They always create a future interest.
Always. Think about it.
It's a ticking clock measured by A's life.
When A dies, the property has to go somewhere, right?
The only question is where? If it goes back to the original
grantor O, we call that future interest a reversion, it reverts
back. But if it goes forward to some
third person, let's say B, then B has what we call a remainder.
And you can see how this immediately creates a conflict,
right? You've got the life tenant, A,
who wants to get as much out of the property as possible right
now. But then you have the future
interest holder, whether it's O or B, who's thinking, hey, don't
trash the place, I'm getting it. Next, the law has to solve this
tension, and it does so with the doctrine of waste.
The rule is pretty simple. The life tenant has a duty not
to permanently screw up the property for the next person in
line. They can use it, they can profit
from it, but they can't wreck it.
So for an exam, you've got to be able to spot which of these
three types of waste is happening first.
You have voluntary or affirmative waste.
This is the easy one. It's overt destructive conduct,
you know, tearing down a perfectly good building. 2nd is
permissive waste. This is waste by neglect.
You let the roof leak until it caves in, you don't pay the
property taxes, that kind of thing.
And then there's the third one, the one that always seems a
little weird. Ameliorative waste.
This is when the life tenant actually improves the property,
but in a way that fundamentally changes its character, something
the future owner might not want. And yeah, believe it or not,
they generally can't do that without permission.
All right, let's move on to Part 4.
Future interests. The basics, let's classify what
comes next. OK, so we've been throwing
around a bunch of terms for future interests, right?
Possibility of reverter, right of entry, reversion, remainder.
It can get a little jumbled, so let's just pause here for a
second and organize all of this into a nice clean framework that
you can actually use on your exam.
And this chart right here, this lays out the entire universe.
And your very first question, the first step in your analysis
should always be who holds the future interest.
Is it the grantor who originally gave the property away?
If the answer is yes, then you only have three choices.
Ossibility of reverter, right of entry, or a reversion.
That's it. But if the interest is held by
some third party, a transferee, then you're down to just two
options. It's either a remainder or an
executory interest. Starting with that one question
will simplify your life immensely.
OK, Next up, remainders versus executory interests.
And let me tell you, this is the most common exam trap.
All right, now we're getting to what is, I think, the single
trickiest distinction for most students.
It's where exams love to trip you up, and that is telling the
difference between a remainder and an executory interest.
If you can nail this distinction, you are way ahead
of the game. The whole difference comes down
to one word, timing. Or maybe think of it as manners.
A remainder is, well, it's polite.
It waits patiently for the preceding estate to come to its
natural end. A life estate ends when the
person dies and the remainder kicks in.
No drama. And executory interest, on the
other hand, is a rude It doesn't wait, it cuts in line.
It divests or cuts short a prior interest before it would have
naturally ended. This is why you often see them
following the feasible fees. The second that condition is
broken, bam, the executory interest swoops in and takes
over. So once you've decided you're
dealing with a remainder, you're not done yet.
You've got to classify it. Is it vested or is it
contingent? And luckily, this is a really
simple two-part test. Just ask yourself, one, is the
person who's supposed to take it known and alive?
In other words, is the taker ascertained?
And two, is there any condition they have to fulfill before they
get the property? If you can say yes, we know who
it is, and no, there are no conditions, then you have a
vested remainder. If the taker is unknown or if
there's a condition precedent, then it's a contingent
remainder. It's that simple.
And that brings us to our final section, the one everyone's been
waiting for. The rule against perpetuities.
The law's final backstop. OK, here we go.
It's time to face the beast, the rule that strikes fear into the
hearts of law students everywhere.
The rule against perpetuities. Let's call it rap.
All rap is really is a backstop. It's the law's way of saying,
look, you can't control your property from the grave forever.
It prevents granders from tying up land with weird contingent
interests that might not resolve for hundreds of years.
Yeah, I know no interest is valid unless it must vest, if at
all, not later than 21 years after some life and being.
It sounds like something out of a Dickens novel, but please
don't get intimidated by the language.
The absolute best way to handle rap is to turn off your common
sense and treat it like a ruthless logic puzzle.
Your job is not to see if the grant might work out.
Your job is to try and prove it will fail.
You're looking for that one fatal flaw, and here is your
first and most important shortcut.
Ramp does not apply to everything, thank goodness.
It only applies to three specific interests, Contingent
remainders, executory interests, and vested remainders subject to
open, which are basically class gifts.
So if you're analyzing an interest and you've identified
it as a possibility of reverter, a right of entry, or a reversion
held by the grantor, you stop, you're done.
Ramp is not an issue. Same goes for a totally vested
remainder. This is a huge time saver on an
exam. Now when WRA does alley you need
to follow this four step rocess. Do it the same way every single
time. One, identify the future
interest. We just covered that.
Two, state the condition, what has to happen for this interest
to actually vest. Three, find a measuring life.
This has to be a person who was alive when the interest was
created. And four, here's the killer
question. Can we know from absolute
certainty that the interest will either vest or fail for good
within 21 years of the death of our measuring life?
And when I say certainty, I mean it.
If you can dream up any bizarre, crazy what if scenario where we
might not know the interest is void, it's gone.
And this is where we get into the famous rap traps, These
absurd scenarios that you have to consider.
First, the fertile octogenarian. For the purposes of rap, anyone
at any age is considered capable of having another child.
It's a conclusive legal presumption.
Then there's the unborn widow. If a grant says to my son's
widow, that widow is not a life in being.
Why? Because his current wife could
die and he could remarry someone who wasn't even born yet when
the grant was made. These aren't common sense.
They're logical traps and they are classic exam fact patterns.
So let's put it all together with one last challenge.
Look at this grant to A for life, then to A's first child to
pass the bar exam. So what interests are created
here? And does that grant violate the
rule against perpetuities? I want you to take the whole
framework we just built, identify the estates, classify
those future interests, state the condition for vesting, and
then run it through that merciless logic of rap.
Can A's first child to pass the bar take the property?
You know, mastering this kind of step by step analysis, that's
the real key. That's how you go from being
intimidated by this stuff to absolutely owning it on your
exam.