May 12, 2025 • 18 mins
Welcome back to the Law School Toolbox podcast! Today, we're diving into the second part of our discussion on present estates and future interests. Previously, we reviewed the default property interest, the fee simple absolute, and defeasible fees. In this episode we're covering life estates, reversions, and remainders.
In this episode we discuss:
- A review of the fee simple absolute
- Life estates
- Reversions and remainders
- Taxes and mortgage payments for a life estate
- Examples illustrating the above concepts
Resources:
- "Listen and Learn" series (https://lawschooltoolbox.com/law-school-toolbox-podcast-substantive-law-topics/#listen-learn)
- California Bar Examination – Essay Questions and Selected Answers, July 2008 (https://nwculaw.edu/pdf/bar/July%202008%20Essays%20and%20Sample%20Answers.pdf)
- California Bar Examination – Essay Questions and Selected Answers, February 2003 (https://nwculaw.edu/pdf/bar/February%202003%20Essays%20and%20Sample%20Answers.pdf)
- Podcast Episode 501: Listen and Learn – Present and Future Estates (Part 1) (https://lawschooltoolbox.com/podcast-episode-501-listen-and-learn-present-and-future-estates-part-1/)
Download the Transcript
(https://lawschooltoolbox.com/episode-503-listen-and-learn-present-and-future-estates-part-2/)
If you enjoy the podcast, we'd love a nice review and/or rating on Apple Podcasts (https://itunes.apple.com/us/podcast/law-school-toolbox-podcast/id1027603976) or your favorite listening app. And feel free to reach out to us directly. You can always reach us via the contact form on the Law School Toolbox website (http://lawschooltoolbox.com/contact). If you're concerned about the bar exam, check out our sister site, the Bar Exam Toolbox (http://barexamtoolbox.com/). You can also sign up for our weekly podcast newsletter (https://lawschooltoolbox.com/get-law-school-podcast-updates/) to make sure you never miss an episode!
Thanks for listening!
Alison & Lee
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Lee Burgess (00:02):
Welcome back to the Law School Toolbox podcast.
Today, we are talking about life estatesand their corresponding future interests,
as part of our "Listen and Learn" series.
Your Law School Toolbox hosts are AlisonMonahan and Lee Burgess, that's me.
We're here to demystify the lawschool and early legal career
experience, so you'll be the bestlaw student and lawyer you can be.
(00:22):
We're the co-creators of the Law SchoolToolbox, the Bar Exam Toolbox, and the
career-related website CareerDicta.
Alison also runs TheGirl's Guide to Law School.
If you enjoy the show, pleaseleave a review or rating on
your favorite listening app.
And if you have any questions,don't hesitate to reach out to us.
You can reach us via the contactform on LawSchoolToolbox.com,
and we'd love to hear from you.
And with that, let's get started.
(00:54):
Hello, and welcome back toour "Listen and Learn" series!
Today, we are diving into part twoof a two-part series discussing
present estates and future interests.
In today’s episode we are goingto be covering life estates,
reversions, and remainders.
If you haven’t listened to part one,I suggest you go back and give it a
listen before continuing with thisepisode, because we cover a basic review
(01:18):
of present and future estates, as wellas the default property interest, the
fee simple absolute, which will bea good foundation for this episode.
With that said, let’s get started!
If you recall from part one of thistwo-part series, the most common
form of property ownership is thefee simple absolute, and all other
(01:38):
present and future estates are carvedout of that fee simple interest.
To continue our metaphor from last time,the fee simple absolute is a whole pie.
Each present and future interestin the property that the owner
gives away is a piece of that pie.
The first “piece” we’re goingto talk about in today’s
episode is called a life estate.
(02:00):
A life estate grants possessionof a property to an individual for
the duration of a person’s life.
Generally, that will be the life ofthe individual the life estate is
granted to, but it may be measured bya third-party’s life in rare cases.
The key language to look for inidentifying a life estate is that
(02:20):
the duration of the interest isbeing measured in terms of a person’s
life, not just a set number of years.
So, you want to look for the words“ for life” or some variant of that.
As we found in part one of thisseries, ownership interests can
feel very abstract, so let’sconsider a short example: O
(02:41):
conveys Willow Lane to A for life.
In this example, O is conveying afee simple interest in Willow Lane
to A, but that interest will onlylast for the duration of A’s life.
Therefore, O is conveying alife estate in Willow Lane to A.
Now, what happens toWillow Lane when A dies?
(03:05):
Because O only conveyed the propertyfor the duration of A’s life, O has
only given away a piece of the pie,or a present interest in Willow Lane.
The other piece of the pie must gosomewhere, and in this example, that
piece remains with O. Remember, ourpresent and future estates must always
(03:27):
add up to the fee simple absolute.
We must always have the wholepie, even if it has been divided
amongst a group of people.
So here, when A dies, the propertyreverts back to O and will
pass on to O’s heirs and so on.
This is called a reversion.
(03:48):
A reversion is the future interestheld by the grantor of a life
estate or an estate for years,which we’ll discuss in a moment.
O has carved out an interest inWillow Lane that will return to
O when the lesser estate expires– when A dies, in our example.
O’s interest in Willow Lane becomespossessory immediately upon A’s death,
(04:13):
so there is an automatic reversion.
O does not have to takeany additional actions.
Sometimes a grantor may carve out morethan one life estate, but in the end, the
property will ultimately revert back tothe grantor when the final lesser estate
expires, unless otherwise specified.
(04:34):
Let’s look at a slightly more complexexample to illustrate how this would
play out (04:39):
O conveys Willow Lane to A for life, then to B for life.
O dies with a will granting Willow Laneto C. Here, O conveys a life estate
to A like before; however, in thisexample, the property won’t revert
back to O when A dies because O hasgiven a second piece of the pie away.
(05:04):
O has also given B a life estate.
So, when A dies, B will hold a feesimple interest in the property
for the duration of their life.
When B dies, then the property willrevert back to O and to O’s heirs.
In this example, O has died and leftthe property to C, making C O’s heir.
(05:26):
So C will own a fee simple absoluteinterest in Willow Lane upon B’s death.
Still with me?
This is complicated stuff!
When in doubt, try to remember,anything the grantor does
not give away, they retain.
The present and future interestsmust always add up to that fee
(05:47):
simple absolute, because that isthe whole title to the property.
Now, before moving on to estates ofyears, let’s talk about the rights
and obligations of a life tenant.
A life estate is fullyalienable unless subject to a
valid restraint on alienation.
So, the life tenant may sell, gift,mortgage, or otherwise transfer their
(06:10):
interest in the property to another.
The key to remember here, however,is that a life tenant cannot
convey more than they have.
They only have one piece ofthe pie, not the whole thing.
So, even if A, from our originalexample, transfers their life estate
interest in Willow Lane to a thirdparty, let’s say B, the estate
(06:32):
will still terminate when A dies.
Even though B is in possession of theproperty, when A dies, Willow Lane
reverts back to O because O kept thatreversion interest for themselves.
A only had a life estate interest, so Acan only convey a life estate interest.
And that life estate ismeasured in terms of A’s life.
(06:55):
That does not change with thetransfer to B. The measuring
life always remains the same.
Okay, but what if thetransfer at issue is a lease?
So, instead of selling or gifting WillowLane to B, A leases the property to them.
Is this allowed?
It is!
Remember, life estatesare freely alienable.
(07:17):
The important thing to note hereis that the lease will end when A
dies unless O opts to continue it.
A cannot grant more than they have, sothey can only lease the property for up
to the duration of their life estate.
Now, let’s talk about everyone’sfavorite topic – taxes!
Who is responsible for the real estate taxand mortgage payments with a life estate.
(07:42):
If the property is producing rentalincome, the life tenant is responsible
for all ordinary taxes on theland the interest on the mortgage.
However, if the property is notproducing income, the life tenant
is only responsible for taxesand mortgage insurance up to the
reasonable rental value of the land.
(08:03):
The life tenant has one final obligation,and that is the duty to not commit waste.
A may have possessory interest in WillowLane now, but O still has a future
interest in the property, and with thatinterest comes the right to receive Willow
Lane in the same condition as A did.
The life tenant, therefore, mustmake ordinary repairs to the
(08:25):
property in order to maintain itfor the future interest holder.
The life tenant does have the rightto make changes to the property that
are considered necessary to permitreasonable use, but any such changes
cannot diminish the value of the property.
How do we feel so far?
Hopefully, we’re doing okay!
(08:46):
Our next and final present estate isvery similar to a life estate, except
for how we measure its duration.
An estate of years isexactly what it sounds like.
The grantor is conveying a fee simpleinterest to an individual for a set number
of years, rather than for someone’s life.
As a quick example (09:05):
O conveys Willow Lane to A for 20 years.
O is granting a fee simple interestin Willow Lane to A for 20 years.
After those 20 years are up, WillowLane will revert back to O who, like
with life estates, holds a reversion.
See how similar that is to life estates!
(09:26):
Our final topic for today is remainders.
Sometimes a grantor may decide togive away the whole pie, rather than
keep a reversion for themselves.
So, instead of O conveying Willow Laneto A for life, the example would read: O
conveys Willow Lane to A for life, thento B. Instead of the property reverting
(09:47):
back to O when A dies, the propertywill pass to B in fee simple absolute.
O has given away the whole pie.
A holds the present interest, while Bnow holds the future interest, and that
future interest is called a remainder.
Seems simple enough, right?
(10:08):
Well, unfortunately, it’s alittle more complicated than that
because there are two types ofremainders: vested and contingent.
We’ll start with vested remainders.
Vested remainders are a type of remainderheld by a specified person that is
certain to become possessory uponthe expiration of the prior estate.
(10:31):
There are no conditions.
The remainder isautomatically going to vest.
This is our "O to A forlife, then to B" example.
Willow lane automaticallyvests to B when A dies.
Now, there are two sub-typesof vested remainders.
The first is called a "vestedremainder subject to open".
(10:51):
This is when a future interest isgiven to a class of people that
may increase in size between thetime the grant is made and the time
the interest becomes possessory.
Let’s consider this example: O conveys Willow Lane to A for (11:02):
undefined
life, then to B’s children.
B’s children’s interests willvest as soon as they are born, so
long as A was alive at the timeor died while they were in utero.
This future interest is considered“subject to open”, because the number
(11:23):
of children B may have between the timeof the grant and A’s death can increase.
The second type of vested remainderis called a "vested remainder
subject to complete divestment".
This is when a future interest hasvested, but may be terminated by an
event that occurs after vesting butbefore the interest becomes possessory.
Take this example (11:46):
O conveys Willow Lane to A for life, then to B so long
as the land is used for agriculture.
A has a life estate, as we know.
B’s interest has vested, but thereis a potential that interest could
be terminated if Willow Lane isno longer used for agriculture.
(12:08):
The condition, if it occurs, willessentially completely “divest” B
of their interest in Willow Lane andthe property will revert back to O
who holds a possibility of reverter.
If you recall from part one of thisseries, it is a possibility because if
the condition never happens, the propertywill never revert back to O and will
(12:29):
instead remain with B indefinitely.
That is vested remainders.
Now, what about contingent remainders?
With contingent remainders, the grantee’sright to immediate possession is subject
to the occurrence of a condition.
Essentially the grantee doesnot get the property unless
(12:49):
they meet certain conditions.
There are three key situations to lookout for with contingent remainders.
First, unascertained persons.
For example (12:59):
O conveys Willow Lane to A for life, then to B’s first
child to reach the age of 21.
The interest is contingent becausethe child must reach the age of 21,
and we have an unascertained personbecause we don’t know which of B’s
children will be the first to reach 21.
We, of course, hope that it will be B’sfirst-born child, but unfortunate things
(13:24):
do happen and it is possible that theirfirst-born may not survive to age 21.
So, we cannot ascertain who thegrantee is at the time O carves
out this piece of the pie.
The second situation to watchout for is unborn children.
So, let’s change the above example upa bit: O conveys Willow Lane to A for
(13:46):
life, then to B’s next born child.
B must have a child after A dies inorder for that child to get Willow Lane.
Lastly, there may be acontingent remainder where as
described above a grantee mustsatisfy a specified condition.
As an example (14:04):
O conveys Willow Lane to A for life, then to B if B marries.
C. In order for B to getWillow lane, they must meet the
specified condition of marrying C.
I know that’s a lot!
So, let’s walk through some hypos togetherto better illustrate how these ownership
interests play out in the real world.
(14:26):
Our first hypothetical is adaptedfrom Question 5 on the July 2008
California bar exam, but changeda bit to better reflect the topics
we covered in our podcast today:
"Ann purchased a 3-bedroomcondominium unit in which she resides.
Several years later, sheexecuted a deed by which she
conveyed the condominium to Ed.
(14:48):
The deed recited that theconveyence was in fee reserving a
life estate to the grantor.
What property interests do Ann and Edhave, if any, in the condominium unit?"
What do we think?
This is a tricky one because it isnot written in the typical "O to A"
structure that we all like to see.
(15:08):
We can still figure this out, though!
Here, Ann purchased thecondominium unit initially.
So she is our grantor, our "O".
She conveyed the condo unit to Ed, but is"reserving a life estate to the grantor".
Rather than granting a life estateto someone else, Ann is granting
the life estate to herself, andthe piece of the pie she is giving
(15:33):
away is the future interest.
So, Ann has a lifeestate in the condo unit.
She possesses the condo unitfor the duration of her life.
When she dies, the condounit will then pass to Ed.
Ed is a third-party not a grantor,so he will hold a remainder.
(15:53):
Because Ed’s interest will becomepossessory as soon as Ann dies,
he holds a vested remainder.
Hopefully this hypothetical helpedprovide some context as to how
these issues appear on the bar exam.
Let's walk through anotherexample to be certain.
This hypothetical is pulledfrom Question 2 on the February
(16:16):
2003 California bar exam.
Like with our first example, we’veadapted it to reflect only the
present and future estates issue:
"Olga, a widow, owned Blackacre,a lakeside lot cottage.
On her seventieth birthday she had apleasant reunion with her niece, Nan,
and decided to give Blackacre to Nan.
(16:37):
Olga asked Bruce, a friend,for help in the matter.
Bruce furnished Olga with a deedform that by its terms would
effect a present conveyance.
Ogla Completed the form naming herself asgrantor and Nan as grantee, designating
Blackacre as the property conveyed.
Olga then told Bruce to 'Hold thisdeed and record it if Nan survives
(17:01):
me.' What property interest didOlga intend to convey to Nan?"
What do we think about this one?
Here, Olga is the owner ofBlackacre, and she is our grantor.
She told her friend Bruce to hold the deedand have it recorded if Nan survived her.
This language reflects that Olga did notintend to grant Nan a present interest in
(17:24):
Blackacre, but rather a future interest.
And that future interest iscontingent upon the happening of a
condition – that Nan survives Olga.
If Nan does not survive Olga,Nan, or her heirs in this
case, would not get Blackacre.
Because Nan’s interest is contingentupon her outliving Olga, Olga intended
(17:47):
to convey a contingent remainder to Nan.
Nan must meet the conditionin order to get Blackacre.
And with that, we’re out of time.
If you enjoyed this episode of theLaw School Toolbox podcast, please
take a second to leave a review andrating on your favorite listening app.
We'd really appreciate it.
And be sure to subscribeso you don't miss anything.
(18:07):
If you have any questions orcomments, please don't hesitate
to reach out to myself or Alisonat lee@lawschooltoolbox.com or
alison@lawschooltoolbox.com.
Or you can always contactus via our website contact
form at LawSchoolToolbox.com.
Thanks for listening, and we'll talk soon!
Welcome back to the Law School Toolbox podcast.
Today, we are talking about life estatesand their corresponding future interests,
as part of our "Listen and Learn" series.
Your Law School Toolbox hosts are AlisonMonahan and Lee Burgess, that's me.
We're here to demystify the lawschool and early legal career
experience, so you'll be the bestlaw student and lawyer you can be.
(00:22):
We're the co-creators of the Law SchoolToolbox, the Bar Exam Toolbox, and the
career-related website CareerDicta.
Alison also runs TheGirl's Guide to Law School.
If you enjoy the show, pleaseleave a review or rating on
your favorite listening app.
And if you have any questions,don't hesitate to reach out to us.
You can reach us via the contactform on LawSchoolToolbox.com,
and we'd love to hear from you.
And with that, let's get started.
(00:54):
Hello, and welcome back toour "Listen and Learn" series!
Today, we are diving into part twoof a two-part series discussing
present estates and future interests.
In today’s episode we are goingto be covering life estates,
reversions, and remainders.
If you haven’t listened to part one,I suggest you go back and give it a
listen before continuing with thisepisode, because we cover a basic review
(01:18):
of present and future estates, as wellas the default property interest, the
fee simple absolute, which will bea good foundation for this episode.
With that said, let’s get started!
If you recall from part one of thistwo-part series, the most common
form of property ownership is thefee simple absolute, and all other
(01:38):
present and future estates are carvedout of that fee simple interest.
To continue our metaphor from last time,the fee simple absolute is a whole pie.
Each present and future interestin the property that the owner
gives away is a piece of that pie.
The first “piece” we’re goingto talk about in today’s
episode is called a life estate.
(02:00):
A life estate grants possessionof a property to an individual for
the duration of a person’s life.
Generally, that will be the life ofthe individual the life estate is
granted to, but it may be measured bya third-party’s life in rare cases.
The key language to look for inidentifying a life estate is that
(02:20):
the duration of the interest isbeing measured in terms of a person’s
life, not just a set number of years.
So, you want to look for the words“ for life” or some variant of that.
As we found in part one of thisseries, ownership interests can
feel very abstract, so let’sconsider a short example: O
(02:41):
conveys Willow Lane to A for life.
In this example, O is conveying afee simple interest in Willow Lane
to A, but that interest will onlylast for the duration of A’s life.
Therefore, O is conveying alife estate in Willow Lane to A.
Now, what happens toWillow Lane when A dies?
(03:05):
Because O only conveyed the propertyfor the duration of A’s life, O has
only given away a piece of the pie,or a present interest in Willow Lane.
The other piece of the pie must gosomewhere, and in this example, that
piece remains with O. Remember, ourpresent and future estates must always
(03:27):
add up to the fee simple absolute.
We must always have the wholepie, even if it has been divided
amongst a group of people.
So here, when A dies, the propertyreverts back to O and will
pass on to O’s heirs and so on.
This is called a reversion.
(03:48):
A reversion is the future interestheld by the grantor of a life
estate or an estate for years,which we’ll discuss in a moment.
O has carved out an interest inWillow Lane that will return to
O when the lesser estate expires– when A dies, in our example.
O’s interest in Willow Lane becomespossessory immediately upon A’s death,
(04:13):
so there is an automatic reversion.
O does not have to takeany additional actions.
Sometimes a grantor may carve out morethan one life estate, but in the end, the
property will ultimately revert back tothe grantor when the final lesser estate
expires, unless otherwise specified.
(04:34):
Let’s look at a slightly more complexexample to illustrate how this would
play out (04:39):
O conveys Willow Lane to A for life, then to B for life.
O dies with a will granting Willow Laneto C. Here, O conveys a life estate
to A like before; however, in thisexample, the property won’t revert
back to O when A dies because O hasgiven a second piece of the pie away.
(05:04):
O has also given B a life estate.
So, when A dies, B will hold a feesimple interest in the property
for the duration of their life.
When B dies, then the property willrevert back to O and to O’s heirs.
In this example, O has died and leftthe property to C, making C O’s heir.
(05:26):
So C will own a fee simple absoluteinterest in Willow Lane upon B’s death.
Still with me?
This is complicated stuff!
When in doubt, try to remember,anything the grantor does
not give away, they retain.
The present and future interestsmust always add up to that fee
(05:47):
simple absolute, because that isthe whole title to the property.
Now, before moving on to estates ofyears, let’s talk about the rights
and obligations of a life tenant.
A life estate is fullyalienable unless subject to a
valid restraint on alienation.
So, the life tenant may sell, gift,mortgage, or otherwise transfer their
(06:10):
interest in the property to another.
The key to remember here, however,is that a life tenant cannot
convey more than they have.
They only have one piece ofthe pie, not the whole thing.
So, even if A, from our originalexample, transfers their life estate
interest in Willow Lane to a thirdparty, let’s say B, the estate
(06:32):
will still terminate when A dies.
Even though B is in possession of theproperty, when A dies, Willow Lane
reverts back to O because O kept thatreversion interest for themselves.
A only had a life estate interest, so Acan only convey a life estate interest.
And that life estate ismeasured in terms of A’s life.
(06:55):
That does not change with thetransfer to B. The measuring
life always remains the same.
Okay, but what if thetransfer at issue is a lease?
So, instead of selling or gifting WillowLane to B, A leases the property to them.
Is this allowed?
It is!
Remember, life estatesare freely alienable.
(07:17):
The important thing to note hereis that the lease will end when A
dies unless O opts to continue it.
A cannot grant more than they have, sothey can only lease the property for up
to the duration of their life estate.
Now, let’s talk about everyone’sfavorite topic – taxes!
Who is responsible for the real estate taxand mortgage payments with a life estate.
(07:42):
If the property is producing rentalincome, the life tenant is responsible
for all ordinary taxes on theland the interest on the mortgage.
However, if the property is notproducing income, the life tenant
is only responsible for taxesand mortgage insurance up to the
reasonable rental value of the land.
(08:03):
The life tenant has one final obligation,and that is the duty to not commit waste.
A may have possessory interest in WillowLane now, but O still has a future
interest in the property, and with thatinterest comes the right to receive Willow
Lane in the same condition as A did.
The life tenant, therefore, mustmake ordinary repairs to the
(08:25):
property in order to maintain itfor the future interest holder.
The life tenant does have the rightto make changes to the property that
are considered necessary to permitreasonable use, but any such changes
cannot diminish the value of the property.
How do we feel so far?
Hopefully, we’re doing okay!
(08:46):
Our next and final present estate isvery similar to a life estate, except
for how we measure its duration.
An estate of years isexactly what it sounds like.
The grantor is conveying a fee simpleinterest to an individual for a set number
of years, rather than for someone’s life.
As a quick example (09:05):
O conveys Willow Lane to A for 20 years.
O is granting a fee simple interestin Willow Lane to A for 20 years.
After those 20 years are up, WillowLane will revert back to O who, like
with life estates, holds a reversion.
See how similar that is to life estates!
(09:26):
Our final topic for today is remainders.
Sometimes a grantor may decide togive away the whole pie, rather than
keep a reversion for themselves.
So, instead of O conveying Willow Laneto A for life, the example would read: O
conveys Willow Lane to A for life, thento B. Instead of the property reverting
(09:47):
back to O when A dies, the propertywill pass to B in fee simple absolute.
O has given away the whole pie.
A holds the present interest, while Bnow holds the future interest, and that
future interest is called a remainder.
Seems simple enough, right?
(10:08):
Well, unfortunately, it’s alittle more complicated than that
because there are two types ofremainders: vested and contingent.
We’ll start with vested remainders.
Vested remainders are a type of remainderheld by a specified person that is
certain to become possessory uponthe expiration of the prior estate.
(10:31):
There are no conditions.
The remainder isautomatically going to vest.
This is our "O to A forlife, then to B" example.
Willow lane automaticallyvests to B when A dies.
Now, there are two sub-typesof vested remainders.
The first is called a "vestedremainder subject to open".
(10:51):
This is when a future interest isgiven to a class of people that
may increase in size between thetime the grant is made and the time
the interest becomes possessory.
Let’s consider this example: O conveys Willow Lane to A for (11:02):
undefined
life, then to B’s children.
B’s children’s interests willvest as soon as they are born, so
long as A was alive at the timeor died while they were in utero.
This future interest is considered“subject to open”, because the number
(11:23):
of children B may have between the timeof the grant and A’s death can increase.
The second type of vested remainderis called a "vested remainder
subject to complete divestment".
This is when a future interest hasvested, but may be terminated by an
event that occurs after vesting butbefore the interest becomes possessory.
Take this example (11:46):
O conveys Willow Lane to A for life, then to B so long
as the land is used for agriculture.
A has a life estate, as we know.
B’s interest has vested, but thereis a potential that interest could
be terminated if Willow Lane isno longer used for agriculture.
(12:08):
The condition, if it occurs, willessentially completely “divest” B
of their interest in Willow Lane andthe property will revert back to O
who holds a possibility of reverter.
If you recall from part one of thisseries, it is a possibility because if
the condition never happens, the propertywill never revert back to O and will
(12:29):
instead remain with B indefinitely.
That is vested remainders.
Now, what about contingent remainders?
With contingent remainders, the grantee’sright to immediate possession is subject
to the occurrence of a condition.
Essentially the grantee doesnot get the property unless
(12:49):
they meet certain conditions.
There are three key situations to lookout for with contingent remainders.
First, unascertained persons.
For example (12:59):
O conveys Willow Lane to A for life, then to B’s first
child to reach the age of 21.
The interest is contingent becausethe child must reach the age of 21,
and we have an unascertained personbecause we don’t know which of B’s
children will be the first to reach 21.
We, of course, hope that it will be B’sfirst-born child, but unfortunate things
(13:24):
do happen and it is possible that theirfirst-born may not survive to age 21.
So, we cannot ascertain who thegrantee is at the time O carves
out this piece of the pie.
The second situation to watchout for is unborn children.
So, let’s change the above example upa bit: O conveys Willow Lane to A for
(13:46):
life, then to B’s next born child.
B must have a child after A dies inorder for that child to get Willow Lane.
Lastly, there may be acontingent remainder where as
described above a grantee mustsatisfy a specified condition.
As an example (14:04):
O conveys Willow Lane to A for life, then to B if B marries.
C. In order for B to getWillow lane, they must meet the
specified condition of marrying C.
I know that’s a lot!
So, let’s walk through some hypos togetherto better illustrate how these ownership
interests play out in the real world.
(14:26):
Our first hypothetical is adaptedfrom Question 5 on the July 2008
California bar exam, but changeda bit to better reflect the topics
we covered in our podcast today:
"Ann purchased a 3-bedroomcondominium unit in which she resides.
Several years later, sheexecuted a deed by which she
conveyed the condominium to Ed.
(14:48):
The deed recited that theconveyence was in fee reserving a
life estate to the grantor.
What property interests do Ann and Edhave, if any, in the condominium unit?"
What do we think?
This is a tricky one because it isnot written in the typical "O to A"
structure that we all like to see.
(15:08):
We can still figure this out, though!
Here, Ann purchased thecondominium unit initially.
So she is our grantor, our "O".
She conveyed the condo unit to Ed, but is"reserving a life estate to the grantor".
Rather than granting a life estateto someone else, Ann is granting
the life estate to herself, andthe piece of the pie she is giving
(15:33):
away is the future interest.
So, Ann has a lifeestate in the condo unit.
She possesses the condo unitfor the duration of her life.
When she dies, the condounit will then pass to Ed.
Ed is a third-party not a grantor,so he will hold a remainder.
(15:53):
Because Ed’s interest will becomepossessory as soon as Ann dies,
he holds a vested remainder.
Hopefully this hypothetical helpedprovide some context as to how
these issues appear on the bar exam.
Let's walk through anotherexample to be certain.
This hypothetical is pulledfrom Question 2 on the February
(16:16):
2003 California bar exam.
Like with our first example, we’veadapted it to reflect only the
present and future estates issue:
"Olga, a widow, owned Blackacre,a lakeside lot cottage.
On her seventieth birthday she had apleasant reunion with her niece, Nan,
and decided to give Blackacre to Nan.
(16:37):
Olga asked Bruce, a friend,for help in the matter.
Bruce furnished Olga with a deedform that by its terms would
effect a present conveyance.
Ogla Completed the form naming herself asgrantor and Nan as grantee, designating
Blackacre as the property conveyed.
Olga then told Bruce to 'Hold thisdeed and record it if Nan survives
(17:01):
me.' What property interest didOlga intend to convey to Nan?"
What do we think about this one?
Here, Olga is the owner ofBlackacre, and she is our grantor.
She told her friend Bruce to hold the deedand have it recorded if Nan survived her.
This language reflects that Olga did notintend to grant Nan a present interest in
(17:24):
Blackacre, but rather a future interest.
And that future interest iscontingent upon the happening of a
condition – that Nan survives Olga.
If Nan does not survive Olga,Nan, or her heirs in this
case, would not get Blackacre.
Because Nan’s interest is contingentupon her outliving Olga, Olga intended
(17:47):
to convey a contingent remainder to Nan.
Nan must meet the conditionin order to get Blackacre.
And with that, we’re out of time.
If you enjoyed this episode of theLaw School Toolbox podcast, please
take a second to leave a review andrating on your favorite listening app.
We'd really appreciate it.
And be sure to subscribeso you don't miss anything.
(18:07):
If you have any questions orcomments, please don't hesitate
to reach out to myself or Alisonat lee@lawschooltoolbox.com or
alison@lawschooltoolbox.com.
Or you can always contactus via our website contact
form at LawSchoolToolbox.com.
Thanks for listening, and we'll talk soon!
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