Future Interests - Revised
Future Interests
There is a future interest in the grantor called a reversion which consists of any interest which he does not convey. A reversion is considered vested and is not subject to the rule against perpetuities.
A remainder is a future interest which is created in a party other than the grantor in the same instrument as the prior possessory interest and which is capable of taking effect at the termination of the prior interest.
A remainder is vested if it is ready to take in possession whenever and however the previous possessory interest terminates. For example, in the conveyance "to A for life and then to B," the remainder is vested because either B or B's heirs or devisees will own the property upon the termination of the life estate in A.
A remainder is contingent if there is a condition precedent which must be satisfied before the interest becomes possessory. For example, in the conveyance, to "A for life and then to B if B survives A," neither the remainderman, B, nor his heirs will take, if B predeceases A.
A remainder is also contingent if the holders of the interest such as heirs of a living person or unborn children are unascertained.
A contingent remainder becomes vested once the condition precedent is satisfied or the indefinite beneficiaries, such as heirs of a living person, become identified when that person dies.
If a fee simple interest is conveyed subject to a condition precedent, title and possession remain in the grantor. The grantee does not take until the condition precedent has been satisfied.
While a remainder interest to the "children of A, a living person" is contingent if A has no children, that interest is classified as vested subject to open if A already has one or more children. The interests of the existing children are reduced as the class expands to include afterborn children of A.
If there is a class gift, one to individuals bearing a family relationship to a named individual such as the "grandchildren of A," afterborn members of the class can join the class until the class closes. If the grantor does not indicate otherwise, the class closes at the time any member of the class is capable of taking possession of the gift. For example, if the gift is "to my grandchildrent at the time they reach age 21, the class closes at the time the first grandchild is eligible to take the interest by reaching age 21.
A future interest whether vested or contingent can be alienated prior to its becoming possessory. However, the grantee of a contingent remainder takes nothing if the condition precedent is never satisfied.
An interest in land to a third person after a fee simple subject to divestment is an executory interest.
If an interest in land is a contingent remainder and cannot become possessory immediately upon termination of the prior estate because the condition precedent has not been satisfied, then the interest is transformed into an executory interest which will take in possession at the time the condition precedent to the taking is satisfied. In the meantime there is a reversion in the grantor.
There is a future interest in the grantor called a reversion which consists of any interest which he does not convey. A reversion is considered vested and is not subject to the rule against perpetuities.
A remainder is a future interest which is created in a party other than the grantor in the same instrument as the prior possessory interest and which is capable of taking effect at the termination of the prior interest.
A remainder is vested if it is ready to take in possession whenever and however the previous possessory interest terminates. For example, in the conveyance "to A for life and then to B," the remainder is vested because either B or B's heirs or devisees will own the property upon the termination of the life estate in A.
A remainder is contingent if there is a condition precedent which must be satisfied before the interest becomes possessory. For example, in the conveyance, to "A for life and then to B if B survives A," neither the remainderman, B, nor his heirs will take, if B predeceases A.
A remainder is also contingent if the holders of the interest such as heirs of a living person or unborn children are unascertained.
A contingent remainder becomes vested once the condition precedent is satisfied or the indefinite beneficiaries, such as heirs of a living person, become identified when that person dies.
If a fee simple interest is conveyed subject to a condition precedent, title and possession remain in the grantor. The grantee does not take until the condition precedent has been satisfied.
While a remainder interest to the "children of A, a living person" is contingent if A has no children, that interest is classified as vested subject to open if A already has one or more children. The interests of the existing children are reduced as the class expands to include afterborn children of A.
If there is a class gift, one to individuals bearing a family relationship to a named individual such as the "grandchildren of A," afterborn members of the class can join the class until the class closes. If the grantor does not indicate otherwise, the class closes at the time any member of the class is capable of taking possession of the gift. For example, if the gift is "to my grandchildrent at the time they reach age 21, the class closes at the time the first grandchild is eligible to take the interest by reaching age 21.
A future interest whether vested or contingent can be alienated prior to its becoming possessory. However, the grantee of a contingent remainder takes nothing if the condition precedent is never satisfied.
An interest in land to a third person after a fee simple subject to divestment is an executory interest.
If an interest in land is a contingent remainder and cannot become possessory immediately upon termination of the prior estate because the condition precedent has not been satisfied, then the interest is transformed into an executory interest which will take in possession at the time the condition precedent to the taking is satisfied. In the meantime there is a reversion in the grantor.