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Present and Future Estates

Part of the Property Law For Dummies Cheat Sheet

You can figure out which present and future estates an instrument creates by reading the granting instrument carefully and asking yourself these questions in order:

  1. When this instrument takes effect, who will have the right to possess the land first?

    You can call this person A.

  2. When will that person’s right to possess end?

    • If the instrument doesn’t say anything about his possession ending, A has a fee simple absolute.

    • If A’s right to possess will end at his death or the death of someone else, A has a life estate. If the instrument says someone else (call her B) gets to take possession when that death occurs, B has a remainder. Otherwise, the grantor has a reversion.

    • If A’s right to possess will end on a particular date or when one of the parties decides to end his possession, A has a leasehold. If the instrument says someone else (B) gets possession when the leasehold ends, B has a remainder. Otherwise, the grantor has a reversion.

    • If A’s right to possess will end when a specified condition occurs, ask yourself the next question.

  3. Who will have the right to possess when the specified condition occurs?

    If the instrument says someone other than the grantor, A has a fee simple subject to executory limitation and B has an executory interest. Otherwise, ask yourself the next question.

  4. Does the instrument say that A’s right of possession automatically ends when the condition occurs — that the estate lasts only as long as the condition doesn’t occur?

    • If so, A has a fee simple determinable and the grantor retained a possibility of reverter.

    • If not, A has a fee simple on condition subsequent and the grantor retained a right of entry.

An instrument can create several future estates in a row. So after you’ve gone through the preceding list of questions, if A doesn’t have a fee simple absolute and therefore someone has a future interest, start at the top of the list again; this time, ask the questions about the right of possession after that future interest takes possession. That will tell you which present estate the future estate holder will have after she takes possession and whether more future estates follow. Keep doing that until you find someone who has a future estate in a fee simple absolute.

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