Session 09 - Executory Interests, RAP, and Co-Tenancies

Property class session 09 outline notes

I. Executory Interests Review

A. Shifting vs. Springing Executory Interests

Shifting Executory Interest

• Takes property from a grantee (another transferee)
• Divests a prior owner who received from the grantor
• Example: O to A for life, but if B gets an A+ in property, then to B
  • A has: Life estate subject to executory limitation
  • B has: Shifting executory interest in life

Springing Executory Interest

• Takes property from the grantor
• Springs from the grantor to take possession
• Example: O to A if A gets an A+ in property
  • O has: Fee simple subject to executory limitation
  • A has: Springing executory interest in FSA

Key Distinction: Who is being divested?

• Grantee → Shifting
• Grantor → Springing

B. Executory Interests vs. Remainders

Critical Rule for Remainders

• Must be capable of becoming possessory upon the natural expiration of the prior estate

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

  • B has: Contingent remainder (waits for A’s natural death)

• Example: O to A for life, but if B gets an A+ in property, then to B

  • B has: Shifting executory interest (can take before A’s death)

Language Matters

• “then to B if…” → Remainder (takes after natural expiration)
• “but if B…” → Executory interest (can divest early)

C. Executory Interests in Life Estates

• Executory interests can apply to life estates, not just fee simple estates
• Example: O to A for life, but if C gets an A+ in property, then to B for life, then to C for life
  • A has: Life estate subject to executory limitation
  • B has: Vested remainder subject to complete divestment in life
  • C has: Shifting executory interest in life

II. Rule Against Perpetuities (RAP)

A. The Basic Rule

Magic Words for Exams

• “Is it possible within 21 years to vest or fail to vest?”
• Write these words on every RAP analysis

Purpose

• Prevents interests from “floating around forever”
• Voids remote vesting that could last in perpetuity

B. Common Law RAP Applications

1. Executory Interests Following Defeasible Fees

Example: O to A and her heirs so long as Blackacre is used for residential purposes, otherwise to B and his heirs

• A has: Fee simple subject to executory limitation
• B has: Executory interest in FSA
• RAP Application: VOID every single time
• Result: Once B’s interest is voided, A has fee simple determinable; O retains possibility of reverter

Critical Distinction:

• O to A so long as Blackacre used for residential purposes, otherwise to B

  • After RAP voids B’s interest → A has FSD; O has possibility of reverter

• O to A, but if Blackacre not used for residential purposes, then to B

  • After RAP voids B’s interest → Entire conveyance after comma is void
  • Result: A has FSA (condition and executory interest both gone)

2. Valid Executory Interests - Life Measurement

Example: O to A for life, but if Blackacre used for anything other than residential purposes, then to B for life

• A has: Fee simple subject to executory limitation (lasting only for duration of B’s life)
• B has: Executory interest in life
• O has: Reversion (since interest ends at B’s death)
• RAP Application: VALID
• Reasoning: Interest will vest or fail to vest within B’s own life (not floating forever)

C. RAP and Class Gifts

The Age 22+ Rule - ALWAYS VOID

Critical Test Rule: Any condition requiring individuals to reach age 22 or more → VOID under RAP

Example: O to A for life, then to B’s children who reach the age of 22

• Current facts: B has two children (C=17, D=21)
• RAP Analysis: VOID
• Reasoning:
  • Measured at time of creation, not actual facts
  • Possible scenario: B could have another child; then everyone dies on plane crash
  • New child would take more than 21 years to reach age 22
  • Therefore, void for remote vesting

Result: If class gift is void, conveyance reads: O to A for life (period)

The Age 21 Rule - VALID

• If condition requires age 21 or less → VALID under RAP
• Can vest within 21 years of measuring life

Special Rules

Rule of Convenience

• If one member of class reaches required age before life tenant dies, may save entire class
• Minority view; jurisdiction-dependent

All or Nothing Rule

• Every single member must satisfy condition or entire class fails
• Common law/majority view

Exam Tip: When you see age 22+, immediately know it’s void. Tattoo this to your brain.

D. Modern RAP Approaches

Common Law Approach

• Apply traditional RAP analysis
• Measure at time of creation
• Lives in being plus 21 years

Uniform Statutory RAP (U.S. RAP) - Modern/iPhone Law

Three-step analysis:

1. First: Apply common law rule
   • If valid under common law → Done!
2. Second: If fails common law, apply “wait and see” approach
   • Wait 21 years and see if interest vests
3. Third: Wait 90 years
   • See if interest vests within 90 years

Note: Different jurisdictions have different wait-and-see periods, but 90 years is the uniform rule

E. RAP Exceptions

Charity to Charity Exception

• RAP does not apply to conveyances from charity to charity
• Example: Red Cross to Salvation Army → Valid, no RAP analysis
• DOES NOT apply to private person to charity
• Must be charity → charity

III. Interaction with Future Interests Doctrines

A. Rule in Shelley’s Case

The Rule: When one instrument creates:

1. Life estate in A, AND
2. Remainder in A’s heirs (or heirs of A’s body)
3. Both legal or both equitable

Result: The two estates merge → A gets FSA

Example: O to A so long as Blackacre used for residential purposes, otherwise to B for life, then to B’s heirs

• Initially: A has FSSEL; B has executory interest in life; B’s heirs have contingent remainder in FSA
• Apply Shelley’s Case: B’s life estate + B’s heirs’ remainder merge → B has executory interest in FSA
• Apply RAP: B’s executory interest in FSA is VOID
• Final Result: A has fee simple determinable; O has possibility of reverter

Modern Status

• Abolished in overwhelming majority of states
• Still valid in very small minority
• Exam Approach: Even if iPhone law/modern fact pattern, still discuss if it appears

B. Doctrine of Worthier Title

The Rule: When instrument conveys:

• Life estate to grantee, AND
• Remainder to grantor’s heirs

Result: Language creating remainder in grantor’s heirs is void

• Reads as: O to A for life (period)
• O automatically has reversion

Modern Status

• Abolished in California, Illinois, Massachusetts, Minnesota, New York, North Carolina, Texas, and others
• Exam Approach: Still discuss if it appears, even in modern jurisdictions

C. Destructibility of Contingent Remainders

Common Law Rule

• If contingent remainder does not vest by the time the prior estate ends → It destructs (destroyed)
• Example: O to A for life, then to B if B gets an A+ in property
  • If A dies before B gets A+, at common law B’s interest is destroyed
  • Goes back to O (reversion)
  • B’s interest typically converts to springing executory interest

Modern/iPhone Law

• Contingent remainders are generally not destructible
• Check jurisdiction

IV. Co-Tenancies (Introduction)

A. When Co-Tenancy Issues Arise

Trigger Language: “O conveys Blackacre to A and B”

• Two or more people have simultaneous interests in property
• Need to determine what type of co-tenancy

B. Three Types of Co-Tenancies

1. Tenancy in Common (most common, default)
2. Joint Tenancy (tested heavily)
3. Tenancy by the Entirety (less common, but fair game)

C. Joint Tenancy - Basic Principles

Right of Survivorship

• Last remaining survivor gets 100% fee simple absolute
• While alive: Each has separate but undivided interest
• Example: Three siblings own property 1/3 each
  • One dies → Two survivors now own 50% each
  • Second dies → Last survivor owns 100%

Undivided Interest

• Cannot divide property physically (“you get that third of the toilet”)
• Each has equal right to possess and enjoy entire property
• If property sold, proceeds divided proportionally

Critical Rule: Wills Are Meaningless

• Joint tenant cannot devise their interest by will
• If you don’t survive longest, you have no interest to convey at death
• Will language leaving joint tenancy interest = “squiggly lines on paper”
• Interest automatically passes to surviving joint tenants

Litigation Example

• Two brothers held land in joint tenancy
• Both killed by train simultaneously
• Issue: Who was last survivor?
• Evidence: One had blood squirting from neck (heart still beating)
• Held: Person with beating heart survived longer → their heirs take 100%

D. Creating Joint Tenancy - Common Law

Four Unities Required (Time, Title, Interest, Possession)

1. Time: Interests must vest at same time
2. Title: Must take through same instrument (same deed/will)
3. Interest: Must have same type of estate (both FSA, or both life estates, etc.)
4. Possession: Equal right of possession and enjoyment

If any unity missing → No joint tenancy created

Straw Person Requirement

• Common law: If you already own property, cannot simply add another person as joint tenant
• Reason: Violates time and title unities
• Procedure:
  1. Convey property to straw person (often attorney) in FSA
  2. Straw person re-conveys to you and new person as joint tenants
  3. Now all four unities satisfied

E. Creating Joint Tenancy - Modern Law

Modern Approach

• No longer requires four unities or straw person
• Only requires specific language showing intent to create joint tenancy
• Magic words: “Joint tenants with right of survivorship”
• Must demonstrate grantor’s clear intent

Analysis Approach

• Common law fact pattern → Discuss all four unities separately
• Modern fact pattern → Focus on grantor’s intent and specific language

V. Key Exam Tips

RAP Analysis Framework

1. Identify future interests subject to RAP (executory interests, contingent remainders, vested remainders subject to open)
2. Ask: Is it possible this could vest more than 21 years after relevant lives in being?
3. Use magic words: “possible,” “21 years,” “vest or fail to vest”
4. Special rules:
   • Age 22+ = VOID (always)
   • Age 21 or less = VALID
   • Life measurement = Usually VALID
   • Executory interest following defeasible fee = VOID (usually)

Future Interests Checklist

1. Classify all interests first
2. Check for Shelley’s Case (life estate + remainder in A’s heirs)
3. Check for Worthier Title (life estate + remainder in O’s heirs)
4. Apply RAP to appropriate interests
5. Determine what happens after RAP voids interests
6. State final classification of all interests

Co-Tenancy Analysis

1. Identify trigger (multiple grantees)
2. Determine type of co-tenancy
3. Common law vs. modern jurisdiction?
4. If joint tenancy, check four unities (common law) or intent (modern)
5. Consider severance, adverse possession, contribution issues (to be covered)

VI. Important Casebook References

• Page 322: Chart of future interests (grantor vs. grantee interests)
• Page 327-328: Examples of remainders and class gifts
• Page 334: Executory interests; destructibility of contingent remainders
• Page 351-354: Rule in Shelley’s Case; Doctrine of Worthier Title
• Page 355-390: Rule Against Perpetuities (extensive examples)
• Page 362-363: RAP applied to class gifts; Rule of Convenience
• Page 374-382: Wait-and-see approach; U.S. RAP
• Page 395-396: Co-tenancies; four unities

Review Problems: Page 341 (answers in Appendix B, page 1177)