Estates in Land

 

In General

If Arnold has a present (or possessory) estate in Blackacre, he has a legal interest that allows him to possess Blackacre immediately. In other words, he has an estate in Blackacre but does not own it.

• When analyzing present estates, keep the following in mind:

  • What language created the estate?

  • What is the duration n of the estate?

  • Are any future interests created?

• If the grantee wants to transfer his interest, he may transfer only what he possesses. For example, a life tenant may transfer only a life estate.

 

Fee Simple

1. Fee simple absolute: A fee simple absolute is the broadest property interest possible. It must be created by the words “To A and his heirs” or “To A.”

   1. The duration of a fee simple absolute is forever.

   2. No future interests are created.

      • Example: Olivia, who holds Blueacre in fee simple, can convey her estate to Arnold with the words “to Arnold and his heirs” or “to Arnold.” Arnold now holds a fee simple absolute.

2. Defeasible fees: A defeasible fee contains language in the conveyance that potentially limits its duration. In the past, defeasible fees were often used for charitable conveyances to ensure that the donor’s purpose was followed.

   1. Fee simple determinable: A fee simple determinable is created by the words “To A and his heirs until/so long as/while . . .” The grantor must use clear durational language.

      1. The duration is as long as the condition is met.

      2. If the condition is no longer met, the grantor automatically has legal possession, which is called the possibility of reverter. A third party has an executory interest.

         • Example: Olivia conveys Greenacre to the Town with the words “To Town so long as it is used as an orphanage.” If the Town uses Greenacre as an orphanage for only five years, Greenacre then reverts automatically back to Olivia.

   2. Fee simple subject to condition subsequent: A fee simple subject to condition subsequent is created by the words “To A and his heirs, but if/upon condition that/provided that. . . .” The grantor must use clear durational language and carve out the right to reenter.

      1. The duration is as long as the condition is met.

      2. If the condition is no longer met, the grantor has the right of entry. A third party has an executory interest. The estate does not automatically expire because the grantor must take affirmative action.

         • Example: Olivia conveys Blueacre to the Town with the words “To Town upon condition that it is used as an orphanage, but if it is not, Olivia retains the right to reenter.” If the Town uses Blueacre as an orphanage for only five years, Olivia then must act affirmatively to reenter, or the estate continues.

   3. Fee simple subject to executory interest/limitation: A fee simple subject to an executory interest is created by the words “To A and his heirs for so long as . . . , and if not . . . , to B.”

      1. The duration is as long as the condition is met.

      2. If the condition is not met, the estate is terminated automatically in favor of the third party. The third party has an executory interest.

         • Example: Olivia conveys Yellowacre to the Town with the words “To Town for so long as it is used as an orphanage, and if not used as an orphanage, to Arnold.” If Town uses Yellowacre as an orphanage for only five years, the interest then shifts automatically to Arnold.

 

Fee Tail

The fee tail is now virtually abolished; today it would probably create a fee simple absolute. The purpose of the fee tail was to keep an estate within a family.

1. A fee tail is created by the words “To A and the heirs of his body.”

2. The duration of a fee tail is for as long as A’s bloodline continues.

3. The grantor has a reversion, meaning that once all of A’s descendants have died, the estate returns to the grantor.

   • Example: Olivia conveys Blackacre with the words “To Arnold and the heirs of his body.” Arnold has two children, Ben and Claire. If Ben and Claire die without children, the estate reverts back to Olivia.

 

Life Estate

A life estate allows the grantee, a life tenant, to enjoy the use of the property for the length of the measuring life. The measuring life is either that of the life tenant or a third party.

1. Creation: A life estate can be created by the words “To A for life,” “To A for the life of B,” “To A for life, then to B,” or “To A for life, but if. . . , to B.” The life estate must be measured in lifetime terms, not years.

   1. The duration of a life estate is until the end of the measuring life.

   2. If the grantor holds the future interest, it is a reversion, but if the grantor creates a future interest in a third party, it is a remainder.

      • Example: Olivia conveys Redacre with the words “To Arnold for life, then to Barbara.” Arnold has a life estate for the length of his life and Barbara has a remainder interest. Barbara will have a fee simple absolute upon Arnold’s death.

2. Waste: The life tenant is entitled to the use, enjoyment, and profits of the land but cannot commit waste. The following types of waste are not permitted:

   1. Affirmative/voluntary: Overt conduct that decreases the value. For example, destroying the residence or exploiting natural resources. An exception is the open mine doctrine, which permits operation of a mine that was already open.

   2. Permissive: Failure to protect or care for the property reasonably. The life tenant must maintain the estate in good repair and pay ordinary taxes.

   3. Ameliorative: Increasing the value of the land in a way that is contrary to the grantor’s intent. The life tenant must have the consent of all future interest holders before taking action to enhance the property value.