Property EF Estates & Future Interests Exam

Property EF Estates & Future Interests Exam:

Answers & Explanations

Generally, your performance was quite good. The median was 21/25, only 13 of you got fewer than 18/25, and 4 students got perfect scores. To determine the number of points you will receive for the test, subtract one from the number you got correct and divide the result by 2. Thus, a perfect score receives 12/12 points; a median score receives 10/12, and the low score of 12/25 will receive 5.5/12.

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

(1) Which of the following is true in all American jurisdictions today?

This is essentially sample question 18

(a) Possibilities of reverter are only transferable by inheritance unless released to the holder of the underlying fee.As we discussed in the context of Mahrenholz, this is a minority rule that exists in Illinois and a few other states.

(b) The Rule in Shelley’s Case is applied as a rule of law, not as a rule of construction.This is true in some states, but not others.

(c) It is unnecessary to use the language “and X’s heirs” to create a fee simple absolute. 91.5% of students chose this answer.

(d) All of the above.

(2) Which of the following was not true “at common law”?

This is sample question 48

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

(b) The Doctrine of Destructibility of Contingent Remainders applied.

(c) Shifting executory interests were allowed, but springing executory interests were not.This was never true. Before 1536, no executory interests were allowed. Since 1536, both kinds have been allowed. 98.1% of you got this right, making it tied for the second easiest question on the test.

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

Question 3 is based on the following grant: Lexi conveys Red-acre “to Marshall for one-hundred-and-one years, but if Marshall dies before that, I or my heirs can re-enter and retake the land.”

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

This is sample question 55, and is similar in form to Problem H, but uses language that clearly creates a term of years on condition subsequent.

(a) Term of years determinable in Marshall.The grant does not contain the phrases referring to time that are characteristic of determinable interests.

(b) Life estate in Marshall.Although the grant is likely to operate as a life estate, that is not the form in which it was drafted, and it is possible that Marshall will live out the 101 years.

(d) Reversion plus a right of entry in Lexi that presumably merge into a reversion.As in problem H, the grantor must retain both the interest in the land if the 101 years expires (a reversion) and the interest that would become possessory if the condition were violated (a right of entry). Although we only discussed the merger of a reversion and a possibility of reverter, there is no reason to think this combination would operate differently. 91.5% of you got this right.

Questions 4-6 are based on the following grant:In 1990, Neal leaves Ruby-Acre in a will, “to my wife for life, then to my son Oleg and his heirs, but if Oleg is unmarried 3 years after my wife’s death, to my daughter Rachel and her heirs.” The will then gives all Neal’s other property to Rachel.

Questions 4-6 are sample questions 37-39.

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

(a) Alternative contingent remainders in Oleg and Rachel. The interest in Rachel cannot be a remainder because it cannot become possessory until three years after the end of the life estate. The interest in Oleg 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 Oleg.The vested remainder is not “subject to divestment” because it cannot divest Oleg until three years after the remainder becomes possessory.

(c) Vested remainder in fee simple on executory limitation in Oleg. This is correct because when Oleg takes the property, he will be subject to a condition that subsequently can cut off his fee. 84% of you got this right.

(d) Reversion in Rachel.There is no reversion because Oleg’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) Oleg was 11 years old at the time Neal died. If this were true, the condition might force him to marry by age 14 to get the property. A court is likely to view that as against public policy and in some states it may be illegal.

(b) At the time Neal died, Oleg 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, etc. 94.3% of you got this right.

(c) The rest of Neal’s wife’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.

(d) Oleg 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.

(6) Suppose Oleg marries Sania in 1995. In 1996 Oleg dies, leaving all his property to Sania in a valid will. In 1998, Neal’s wife dies. In 2001, on the third anniversary of Neal’s wife’s death, Rachel sues Sania for title to Ruby-Acre. Which of the following arguments is not relevant to who owns Ruby-Acre?

(a) Oleg and Sania have a child Veena, who was one of Oleg’s heirs under the relevant intestacy statute.The grant to “Oleg and his heirs” gives Oleg a remainder in fee simple but creates no rights in the heirs. Oleg can and did leave his vested remainder to Libby in his will, so again Veena has no claim. 96.2% of you got this right, making it the fourth easiest question on the test.

(b) Oleg is literally unmarried in 2001, because Sania 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.

(d) Neal’s intent regarding Oleg’s acts was satisfied because Oleg 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.

Questions 7-9 are based on the following grant:Wendi grants Orange-acre “to Yoni for life, then to Aaron if he graduates from medical school, but if Aaron never graduates from medical school, then to Barbi.”

Questions 7-8 are essentially the same as questions 2-3 on the Fall 2005 exam. Question 9 is new. Yoni gets a life estate. Aaron and Barbi have alternate contingent remainders (either Aaron becomes a lawyer before he dies and his interest vests or Aaron dies without becoming a lawyer and Barbi’s interest vests). Wendi retains a reversion.

(7) If the grant takes place in 2005, all of the following interests are created except:

(a) Life estate in Yoni.

(b) Contingent remainder in Aaron.

(c) Shifting executory interest in Barbi.If Aaron had a vested remainder, this would be correct, but Barbi’s interest will not cut off a present or vested estate, so it is also a remainder. 69.8% of you got this right.

(d) Reversion in Wendi. 24.5%of you picked this answer, even though there must be a reversion if Aaron has a contingent remainder, which you must have realized he does because you didn’t pick (b).

(8) Assume that Aaron graduated from medical school, then died leaving a valid will devising all his property to Cathy. Subsequently Yoni died intestate. If the grant took place “at common law,” who would then have the right to possess Orange-acre?

When Aaron becomes a lawyer, his remainder vests and Barbi’s remainder fails. However, at common law, Aaron’s vested remainder is in life estate, because the grant does not say “and his heirs.” Thus, when he dies, his interest dies with him. At Yoni’s death, Wendi’s reversion (which must follow the remainders in life estate) becomes possessory.

(a) Wendi, because of the Doctrine of Destructibility of Contingent Remainders. The destructibility doctrine would come into play if Yoni had died before Aaron’s interest vested, but it doesn’t affect a vested interest.

(b) Barbi, because of the Doctrine of Destructibility of ContingentRemainders. Barbi’s interest fails as soon as Aaron becomes a lawyer (either at common law or today)

(c) Cathy, because Aaron’s interest vested before Yoni’s death. Because Aaron’s interest was in life estate, it could not survive Aaron’s death.

(d) Wendi, because of the presumption favoring life estates. 79.2% of you chose this answer.

(9) Assume instead thatYoni died while Aaron was still alive, but Aaron had not yet graduated from medical school. If the grant took place in 2005, which of the following would be true if the jurisdiction does not destroy contingent remainders?

The conditions that would vest the two contingent remainders have not been met at Yoni’s death, so Wendi’s reversion becomes possessory. Since the jurisdiction doesn’t destroy contingent remainders, they become springing executory interests and we’ll characterize Wendi’s interest as a fee simple on executory limitation.

(a) Barbi would have a fee simple absolute. This would be true if we knew for sure that Aaron will not graduate from medical school, but we won’t know that until his death.

(b) Aaron and Barbi would have alternate contingent remainders. Once the life estate is gone, these interests cannot be remainders because they no longer are waiting for the end of a finite estate. 22.6% of you chose this answer.

(c) Wendi would have a fee simple on executory limitation. 62.3% of you chose this answer, making this tied for the third hardest question on the test.

(d) None of the above.

Question 10 is based on the following information: In 1990, Dave conveyed Topaz-acre “to Freddy for life, then to Gabe’s children alive at Freddy’s death and their heirs.” At that time, Gabe had two children, Haydee and Isabel. In 2000, Haydee died, leaving all her property to Jamie in a valid will. In 2001, Freddy died. In 2003, Gabe had an additional child, Kaema.

This is essentially question 5 from the Fall 2005 exam. The grant to Gabe’s children requires that they be alive at Freddy’s death. Haydee dies before Freddy, so she has no interest to leave to Jamie or to her heirs. Kaema was not even conceived at the time of Erin’s death, so she does not meet the condition either.

(10) Assuming that Topaz-acre has not been transferred in any way besides pursuant to the information above, who owns Topaz-acre in 2004?

(a) Isabel.98.1% of you got this right, making it tied for the second easiest answer on the test.

(b) Jamie and Isabel.

(d) Isabel and Kaema.

Question 11 is based on the following grant:In 2002, Ben, while alive, grants Greenacre “to Chris for life, remainder to my heirs.”

(11) In a jurisdiction that treats the Doctrine of Worthier Title as a rule of construction, which of the following arguments supports construing the grant as written (i.e., not treating the remainder in Ben’s heirs as a reversion in Ben)?

This is a variation on sample question 42.

(a) Ben did not say he intended the Doctrine to apply.If the Doctrine is a rule of construction, we apply it unless there is some indication that the grantor intended differently. Thus, if Ben says nothing, it would apply.

(b) At the time he executed the grant, Ben had been diagnosed with a disease that frequently leads to diminished mental capacity.I said in class that I thought that a court might take this into account on the theory that Ben might not want control of the property passing back to himself if he believed he would not be competent to make decisions about it. Only 24.5% of you got this right, making it the hardest question on the test but appropriately rewarding people who were paying attention.

(c) In 2002, Ben could not know who his heirs eventually would be.This is always true and tells us nothing about what he would have wanted us to do about control of the property if he were still alive.

(d) None of the above. 59.4% of you picked this answer, which was correct in the earlier version of the question because there was no answer equivalent to (b).

Questions 12-14 are based on the following grant: In her valid will, Laura grants Yellow-Acre “to Mary for life, then to Norman and his heirs, but if my daughter Rebecca marries an actor, to Rebecca and her heirs.”

This is a variation on sample questions 19-21 and Fall 2005 questions 11-13, which involved an “artist” and a “public school teacher” rather than an “actor.”

(12) Which of the following is true?

(a) Norman has a vested remainder subject to divestment.Norman’s interest is a remainder because it follows a life estate; it is vested because he is alive and ascertainable and no condition precedes his taking; it is subject to divestment because he can lose it before he takes possession if Rebecca marries an actor. 94.3% of you got this right.

(b) Rebecca has a contingent remainder.Rebecca’s interest follows and would cut off a vested remainder, so it must be an executory interest.

(d) Laura has a reversion.Where a vested remainder in fee follows a life estate, no reversion is created.

(13) Which of the following facts would be relevant to the determination of whether Mary’s interest is best characterized as a life estate on executory limitation:

(a) Laura repeatedly expressed concern that if Rebecca (who was anactress herself) married one of her actor friends, Rebecca would starve to death.If Laura was worried that Rebecca would starve, she would want her to have the property immediately.

(b) Mary is 78 years old and in poor health.If this is true, it would seem likely that Laura did not intend to evict poor Mary, but rather to have Rebecca wait until Mary’s life estate ended. This was the answer that had not been in the prior versions of the question.

(c) The grant to Rebecca does not include the word “then.” If the grantor wanted to be clear that the grant to Rebecca had to wait for the end of the life estate, using “then” would so indicate.

(d) All of the above.67% of you got this right, making it the fifth hardest question on the test.

(14) If the condition that Rebecca marry anactor is challenged as being against public policy, which of the following facts support reaching the same result in this case as in Shapira?

(a) It might be very difficult for a court to determine whether someone is an “actor.”One of the factors that worked in favor of the grant in Shapirawas the relative ease of determining whether the sons’ spouses were Jewish girls born of Jewish parents. By contrast, there might be some controversy about who really is an “actor”(e.g., I am still unconvinced about Andie McDowell). Thus, if a court believed this to be true, it would support a result different from that in Shapira.

about who is a real “artist” and a court may not wish to make that determination

(b) There are thousands of aspiring actors residing in the city where Rebecca lives.This supports reaching the same result as Shapira because of the wide range of possible spouses. 82.1% of you got this right.

(c) At the time Laura died, Rebecca was engaged to be married to a lawyer whom Laura despised. Shapira draws a distinction between a well-developed estate plan and an in terrorem condition. If the court believed that Laura created the grant here just to break up Rebecca’s pending wedding, it might well view this as equivalent to an in terrorem grant and strike it down.

(d) All of the above.

Questions 15-18 are based on the following grant:In 2001, David’s valid will granted Emerald-acre “to my friend Fuller if he lights a candle daily in my memory in a Christian church, but if he ever ceases to do so, the property should be retaken.”

These are variations on sample questions 5-8 & 51-54 and Fall 2005 questions 14-16.

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