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# Session 08

> Future Interests: Remainders, Executory Interests, and Rule Against Perpetuities

## I. Future Interests: Overview

### A. Basic Framework

* **O** (Original Grantor): The "architect" - creates the conveyance and cannot be changed
* **A** (Present Possessory Interest Holder): Has current possession, typically a **life estate** (96% of the time)
* **B, C, D** (Future Interest Holders): Have future interests in the property

### B. Key Principle

* A **remainder** follows a **life estate** (natural expiration of prior estate)
* A **remainder** will NEVER follow a **fee** estate
* **Natural expiration** = when someone's heart stops; when they die

***

## II. Vested Remainders

### A. Definition

A **vested remainder** is **certain** to become possessory upon the natural expiration of the prior estate.

### B. Three Types of Vested Remainders

#### 1. Indefeasibly Vested Remainder

**Definition**: A remainder where the holder is:

* **Ascertainable** (named and identifiable)
* NOT subject to any condition
* Will definitely get the property
* No one can take it away

**Example**: "O to A for life, then to B"

* O: Fee simple absolute (presumed)
* A: Present possessory interest in life estate (A is measuring life)
* B: **Indefeasibly vested remainder** in fee simple absolute

**Variation**: "O to A for life, then to B for life"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: **Indefeasibly vested remainder for life**
* O: **Reversion** (because B won't have it forever)

#### 2. Vested Remainder Subject to Open (Subject to Partial Divestment)

**Definition**: A **class gift** where:

* More people can enter the class
* Current class members' shares decrease as new members join
* Each member's interest is "subject to open"
* Also called "subject to partial divestment"

**Key Principle**: Think of it like a **pizza** - the more people that enter the class, the less pizza (property) each person gets

**Example**: "O to A for life, then to B's children" (B has 2 children: C and D)

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* C and D: **Vested remainder subject to open** in fee simple absolute
* As long as **B is alive**, B can have more children
* More children = smaller shares for each

**Class Closing Rules**:

* Class is **open** as long as B (parent) is alive
* Class **closes** when B dies
* Once class closes → becomes **indefeasibly vested remainder**
* If B has no children at all → **contingent remainder**

**Important Distinction**:

* "Then to B's **children**" (with at least one child alive) = vested remainder subject to open
* "Then to B's **heirs**" (while B is alive) = contingent remainder (heirs determined at death)

#### 3. Vested Remainder Subject to Complete Divestment (Total Divestment)

**Definition**: A remainder where:

* Holder is **ascertainable**
* NOT subject to any condition initially
* BUT subject to being **completely divested** by someone else
* An individual (not a class) can lose 100% of their interest

**Example**: "O to A for life, then to B, unless C gets an A+ in real property, then to C"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: **Vested remainder subject to complete divestment** in fee simple absolute
* C: **Shifting executory interest** in fee simple absolute

**Analysis**:

* B doesn't have to do anything to get the property
* B is named and ascertainable
* BUT if C gets an A+, B loses **everything** (complete divestment)
* C's interest is an **executory interest** (divests B)

***

## III. Contingent Remainders

### A. Definition

A **contingent remainder** is a future interest that is:

* **Capable** but NOT **certain** to become possessory
* Upon natural expiration of the prior estate
* Subject to either:
  1. **A condition precedent** that must be fulfilled, OR
  2. Held by an **unascertainable person**

**Key Distinction**: Vested remainder = **certain**; Contingent remainder = **capable** but NOT certain

### B. Condition Precedent

**Example**: "O to A for life, then to B if B gets an A+ in real property"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: **Contingent remainder** in fee simple absolute
* O: **Reversion** (because B might never get the A+)

**Analysis**:

* B is named and ascertainable
* BUT B must fulfill a condition (get A+)
* It's possible but NOT certain B will get it
* If B never satisfies the condition → property reverts to O

**Important**: Anytime a conveyance ends with a **contingent remainder**, O **always** retains a **reversion** by operation of law

### C. Unascertainable Person

**Example**: "O to A for life, then to the heirs of B" (B is alive)

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B's heirs: **Contingent remainder** in fee simple absolute
* O: **Reversion**

**Key Rule**: **Heirs are determined at death**

* You don't know who your heirs are while alive
* Since B is alive, B's heirs are **unascertainable**
* Therefore = contingent remainder

### D. Alternative Contingent Remainder

**Example**: "O to A for life, then to B if C gets an A+ in property"

* B will get it, but the condition is on **C** (not B)
* B's interest is contingent on something C must do
* If C satisfies the condition → B gets it

### E. Life Estate Pur Autre Vie Variation

**Example**: "O to A for the life of B, then to C if C gets an A+ in property"

* O: Fee simple absolute
* A: Present possessory interest in **life estate pur autre vie** (B is measuring life)
* C: Contingent remainder in fee simple absolute
* O: Reversion

***

## IV. Executory Interests

### A. Definition

An **executory interest**:

* Is a **future interest** in a third party
* **Divests** (takes away from) the prior estate
* Does NOT wait for natural expiration
* Can follow a **life** OR **fee** estate

**Key Distinction**: Remainder = waits for natural expiration; Executory Interest = cuts short/divests

### B. Types of Executory Interests

#### 1. Shifting Executory Interest

* Divests (shifts from) another **grantee** (transfers from one grantee to another)

#### 2. Springing Executory Interest

* Divests the **grantor** (springs from grantor to grantee)

### C. Examples

**Example 1**: "O to A, so long as Blackacre is used for residential purposes, otherwise to B"

* O: Fee simple absolute (presumed)
* A: Present possessory interest in **fee simple subject to executory limitation**
* B: **Executory interest** in fee simple absolute

**Important**: This is NOT a restraint on alienation (only restrains **use**, not sale)

**Example 2**: "O to A, so long as Blackacre is used for residential purposes, otherwise to B for life"

* O: Fee simple absolute
* A: Present possessory interest in fee simple subject to executory limitation
* B: **Executory interest for life**
* O: **Reversion** (because B only has it for life; when B dies, it goes back to O)

**Example 3**: "O to A for life, then to B for life, but if B wins an Olympic gold medal, then to D"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: **Vested remainder subject to complete divestment for life**
* D: **Executory interest** in fee simple absolute

**Analysis**:

* Notice language: "then to B... **but if** D wins"
* This means B gets it UNLESS D does something
* If it said "**then to D if** D wins" → D would have contingent remainder
* Language is very telling

**What if D wins the gold medal while A is still alive?**

* C's interest is canceled out
* Becomes: "O to A for life, then to D"
* D has indefeasibly vested remainder

**Tricky Example**: "O to A for life, then to B, otherwise to C"

* This creates confusion
* B: Vested remainder subject to complete divestment in **fee simple subject to executory limitation**
* C: Executory interest in fee simple absolute

***

## V. Interests Subject to Rule Against Perpetuities

### Important Note

The following interests are **subject to the Rule Against Perpetuities (RAP)**:

1. **Executory interests**
2. **Contingent remainders**
3. **Class gifts** / Vested remainders subject to open

***

## VI. Destructibility of Contingent Remainders

### A. Common Law Doctrine

**Rule**: If a **contingent remainder** does not **vest** at the time of the prior estate's natural expiration, it **destructs** (is destroyed).

**Status**: Common law only (minority of states may still follow)

### B. Example

**Common Law**: "O to A for life, then to B if B gives A a proper funeral"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: Contingent remainder in fee simple absolute
* O: Reversion

**Scenario**: A dies, but B hasn't given A a proper funeral yet

**Common Law Result**:

* B's interest **destructs** (destroyed)
* Conveyance becomes: "O to A for life" → "O" (fee simple absolute)

**Modern Law Result**:

* Property goes to O for a **reasonable period of time**
* Allows B to give A a proper funeral
* B's interest transforms into an **executory interest**
* O has **fee simple subject to executory limitation**

### C. Another Example

"O to A for life, then to B if B gets an A+ in real property"

**Common Law**:

* If A dies before B takes the final exam → B's interest **destructs**
* Property goes to O in fee simple absolute

**Modern Law**:

* Property goes to O temporarily
* B gets reasonable time to take exam and get A+
* O: Fee simple subject to executory limitation
* B: Executory interest

***

## VII. Rule in Shelley's Case

### A. Definition

When an instrument conveys to a grantee:

1. An interest **in life**, AND
2. A future interest **in fee** to that same grantee's **heirs**

→ The two estates **merge** into a single **fee simple absolute** in the grantee

### B. Example

**Original**: "O to A for life, then to A's heirs"

**Before applying rule**:

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* A's heirs: Contingent remainder in fee simple absolute
* O: Reversion

**After applying Rule in Shelley's Case**:

* The life estate and the contingent remainder **merge**
* Result: "O to A" (A has **fee simple absolute**)

**Rationale**: When A dies, the interest will filter to A's heirs anyway, so why not just give A fee simple absolute now?

### C. Elements

* Grantee gets life estate
* Same grantee's **heirs** get future interest in fee
* Merge via **doctrine of merger**

***

## VIII. Doctrine of Worthier Title

### A. Definition

When an instrument conveys:

1. To a grantee **in life**, AND
2. A future interest to the **grantor's heirs**

→ The interest to grantor's heirs **merges** with grantor's reversion

### B. Example

**Original**: "O to A for life, then to O's heirs"

**Before applying doctrine**:

* O: Fee simple absolute (presumed)
* A: Present possessory interest in life estate (A is measuring life)
* O's heirs: Contingent remainder in fee simple absolute
* O: Reversion

**After applying Doctrine of Worthier Title**:

* O's heirs' interest merges with O's reversion
* Result: "O to A for life" (O retains reversion)

**Rationale**: No reason to have O's heirs listed separately; just say O retains reversion

### C. Distinction from Shelley's Case

* **Shelley's Case**: Grantee in life → **grantee's heirs**
* **Worthier Title**: Grantee in life → **grantor's heirs**

***

## IX. Doctrine of Merger

### A. Definition

The mechanism by which two estates held by the same person combine into a single estate

### B. Application

* Used in conjunction with **Rule in Shelley's Case** and **Doctrine of Worthier Title**
* Two interests merge/come together and transition into one interest
* Not taught as independent doctrine
* Mention "doctrine of merger" or "merge" in essay discussion

***

## X. Rule Against Perpetuities (RAP)

### A. The Rule Statement

**Common Law Rule**: "No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the time of its creation."

### B. Complexity and Context

**Lucas v. Hamm** (California, \~1978):

* California Supreme Court held this rule is **so complicated** that attorneys cannot be sued for malpractice for violating it
* UNLESS they hold themselves out as a **specialist**
* Shows the difficulty of this rule

**Bar Exam History**:

* Future interests NOT tested in essays for \~30 years
* Only present interests tested (fee simple determinable, condition subsequent, restraint on alienation, life estates)
* Future interests appeared on bar exam essay **last year** (first time in decades)

### C. Which Interests Are Subject to RAP?

**ALWAYS apply RAP when you see**:

1. **Executory interests**
2. **Contingent remainders**
3. **Class gifts** / Vested remainders subject to open

### D. How RAP Operates

**Key Principle**: RAP voids out **uncertainty**

* Measured at time interest is **created** (not what actually happens)
* Tests **possibilities**, not actualities
* Voids interests that could vest **too remotely** (beyond a life in being + 21 years)

### E. The "Plane Crash Test"

**Method**: Put O, A, and B on a plane → plane crashes → everyone dies

* Then ask: Where does the property go?
* If heirs could continue for more than 21 years → VOID
* If limited to someone's life → VALID

### F. RAP Applied to Executory Interests

#### Rule for Fee Interests

**Any executory interest following a fee simple** = **ALWAYS VOID**

**Example 1** (VOID): "O to A, so long as Blackacre is used for residential purposes, otherwise to B"

* O: Fee simple absolute
* A: Fee simple subject to executory limitation
* B: Executory interest in fee simple absolute

**RAP Analysis**:

* How long could A use it for residential purposes? **Forever**
* How long could B's interest float around? **Forever**
* B's heirs could be waiting forever
* **VOID** due to remote vesting

**Result after RAP**:

* Cross out "otherwise to B"
* Becomes: "O to A, so long as Blackacre is used for residential purposes"
* O: **Possibility of reverter** (because B's interest voided)

**Example 2** (VOID): "O to A, on condition that Blackacre is used for residential purposes, otherwise to B"

* Same analysis as Example 1
* B's interest is **VOID**
* Cross out "otherwise to B"

**Special Issue**: No "right of entry" language exists

* Some professors create automatic right of entry in O (to match O's intent)
* But technically problematic

**Example 3** (VOID - Special Rule): "O to A, but if Blackacre is used for anything other than residential purposes, then to B"

* O: Fee simple absolute
* A: Fee simple subject to executory limitation
* B: Executory interest in fee simple absolute

**RAP Analysis**:

* "**But if**" language is connected to "**then to B**"
* B's interest is VOID (same remote vesting problem)
* BUT: Because "but if" and "then to B" are connected, the **entire condition** is void

**Result after RAP**:

* Cross out entire "but if... then to B" clause
* A has **fee simple absolute** (no conditions at all)

#### Rule for Life Interests

**Executory interest following a life estate** = **VALID** (if measuring life identified)

**Example 4** (VALID): "O to A, so long as Blackacre is used for residential purposes, otherwise to B for life"

* O: Fee simple absolute
* A: Fee simple subject to executory limitation
* B: Executory interest **for life**
* O: Reversion (because B only has for life)

**RAP Analysis**:

* Plane crash test: O, A, B all die
* B's interest only lasts for **B's life**
* Maximum duration = someone's life (not forever)
* **VALID** - B's interest upheld

**Example 5** (VALID): "O to A for life, then to B, so long as Blackacre is used for residential purposes"

* O: Fee simple absolute
* A: Present possessory interest in life estate (A is measuring life)
* B: Executory interest for life
* O: Reversion

**RAP Analysis**:

* Plane crash test: everyone dies
* Interest only lasts A's life
* Not going on forever
* **VALID**

**Example 6** (VALID): "O to my wife for life, then to B, so long as used for residential purposes"

* O: Fee simple absolute
* Wife: Life estate subject to executory limitation
* B: Executory interest in fee simple absolute

**RAP Analysis**:

* Interest measured by wife's life
* Will vest or fail during wife's life
* Not perpetual
* **VALID**

### G. Key Pattern Recognition

**VOID Patterns** (executory interests):

* "O to A \[fee], so long as \[condition], otherwise to B"
* "O to A \[fee], on condition \[condition], otherwise to B"
* "O to A \[fee], but if \[condition], then to B" (entire condition void)

**VALID Patterns** (executory interests):

* Anything with "**for life**" limiting the interest
* Interest measured by an identifiable life in being

### H. Summary: Why Life Estates = Valid

**Maximum duration** of interest = someone's life

* Not going to survive their deaths
* Not floating around in perpetuity forever
* Only lasts for measuring life
* Therefore: **VALID**

### I. What Happens When Interest is VOID?

**If executory interest is void**:

* Cross out the executory interest clause
* Re-analyze what remains
* O typically gets **possibility of reverter** or **right of entry**
* OR grantee gets **fee simple absolute** (if condition is connected/inseparable)

***

## XI. Exam Tips and Important Testing Points

### A. Common Mistakes

1. **Missing O's reversion**: Always remember when conveyance ends with contingent remainder or life estate, O retains reversion
2. **Confusing vested vs contingent**: Vested = certain; Contingent = capable but not certain
3. **Forgetting RAP**: ALWAYS discuss RAP when you see executory interests, contingent remainders, or class gifts
4. **Misidentifying heirs**: Heirs determined at death (while alive = unascertainable)

### B. Language Clues

**Vested Remainder Subject to Complete Divestment**:

* "Then to B, **unless** C..." or "Then to B, **but if** C..."
* Condition comes AFTER the grant to B

**Contingent Remainder**:

* "Then to B **if** B..."
* Condition comes WITH/BEFORE the grant

**Executory Interest**:

* "Otherwise to..."
* "But if..."
* Divests prior estate (doesn't wait for natural expiration)

### C. Modern vs Common Law

* **Modern Law** = "iPhone law" (when iPhone came out)
* Assume **modern law** unless told otherwise
* Common law assumes **fee tail** language
* Modern law: "O to A" = **fee simple absolute**

### D. Always Identify First

1. What does **O** have? (Start with fee simple absolute presumed)
2. What does **A** have? (Present possessory interest)
3. What does **B** have? (Future interest)
4. Any other letters? (C, D, E...)
5. Check **validity** (RAP, destructibility, merger rules)

### E. Testing Frequency

* **Vested remainders**: Very common
* **Contingent remainders**: Common
* **Executory interests**: Common
* **RAP**: Increasingly tested (was on bar exam last year after 30-year gap)
* **Rule in Shelley's Case**: Tested 3 times in 12 years
* **Doctrine of Worthier Title**: Tested 3 times in 12 years

***

## XII. Key Definitions for Quick Reference

* **Ascertainable**: Named, identifiable person you could contact
* **Natural expiration**: When someone dies (heart stops for good)
* **Vest**: Interest becomes certain/fixed
* **Divest**: Take away/cut short prior estate
* **Class gift**: Conveyance to a group (e.g., "to B's children")
* **Measuring life**: The life that determines duration of life estate
* **Life in being**: Person alive at time interest created
* **Remote vesting**: Interest that could vest too far in the future (beyond life in being + 21 years)
* **Fee simple absolute**: Highest estate; no conditions; lasts forever
* **Reversion**: Future interest retained by grantor when grantee has less than fee simple absolute
* **Possibility of reverter**: Future interest in grantor following fee simple determinable
* **Right of entry**: Future interest in grantor following fee simple subject to condition subsequent