Wednesday, June 14, 2017

Future Interests

Future Interests has got to be one of the most dreaded topics in Real Property.  It takes some time and struggling to get this stuff but as an initial matter it's important to understand which type of future interest goes with which type of present possessory estate.  That's the first step in understanding this very difficult concept. So, let's begin there:

Bellow #s  will be listed as follows:

Present possessory estate--->future interest associated with that estate

(1): Fee simple absolute--->No future interest

(2): Fee simple determinable-->Possibility of reverter

(3): Fee simple subject to condition subsequent--->Right of entry

(4): Fee simple subject to executory interest--->Executory interest

(5): Life estate-->Remainder.

As an explanation if you look at (2) above, that means that if a fee simple determinable is granted to someone (let's call that person y) then the future interest associated with that grant is a possibility of reverter.  Assume that grantor x grants to y property so long as y uses the property for farming.  Such a grant fits the definition of fee simple determinable, and so y has been granted a fee simple determinable as a present possessory estate.  X, the grantor, retains a possibility of reverter as a future interest.  If y fails to satisfy the stated condition by not using the property for farming then the possibility of reverter will force the property to revert back to x and x's future interest (a possibility of reverter) will become a present possessory estate (a fee simple).

The same logic can be applied for all of the above, though there are some slight differences depending upon the present estates and future interests.

It's quite complex but it certainly helps to know the above as you begin to delve deeper into this area.

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