1. Introduction – A Remainder is a future interest that is capable of becoming possessory at the termination of the prior estate.
2. Types of Remainders
a. Vested Remainder given when:
i. It is given to an ascertained person at the time of the grant; and
ii. It is not subject to a condition precedent (other than the natural termination of the preceding estates.)
a. Indefeasibly vested – the remainder is certain of becoming possessory in the future and cannot be divested
b. Vested Subject to Open (Partial Divestment) occurs when later born children are entitled to share in the gift
b. Contingent Remainder given when:
i. It is given to an unascertained person at the time of the grant; or
ii. It is made contingent upon some event occurring other than the natural termination of the preceding estates
3. Executory Interests
a. Old Common Law Ideas about Uses (which has evolved into Executory Interests)
i. Two Prohibitory Rules: No Shifting Interests; No Springing Interests
1. No Shifting Interests
a. Common Law rule that said no transferor could create a future interest in favor of a transferee if the interest could operate to cut short a fee simple.
b. No longer in effect
i. Allowed today as executory interest
2. No Springing Interests
a. Common Law rules that no freehold estate could be created to spring up in the future
b. No longer in effect
ii. The Rise of the Use
1. Common Law equity principle that literally means a benefit
2. The use (benefit) was a future interest created and protected by chancellor
3. Chancellor recognized the right of the transferor to force transferee to “use” the transferred land for the benefit or use of another
4. Advantage was in taxation, because the use could be conveyed to another without tax liability
iii. Abolition of the Use: The Statute of Uses
1. Statute of Uses executed the use and made it a legal interest
2. Common Law precursor to executory interest
b. Modern Executory Interests (evolved from the Common Law idea of Uses)
i. Fee Simple Subject to an Executory Limitation is a fee simple that, upon the happening of a stated event, is automatically divested by an executory interest in a transferee.
1. Such an interest can be created either in possession or in remainder.
2. Very similar to Defeasible Fee Simple Subject to a Condition Subsequent except that no re-entry is required
a. Magic word will be “but if” like DFSSCS without the re-entry clause at the end
ii. Executory Interests are:
1. Contingent future interest
2. Can only be created in a transferee
We have located some similar legal questions and legal question categories. Check out these challenging questions that askquestions about Gratuitous Transfers and are similar to What are the Future Interests in the Transferees?. Also, we have included a list of some of our more popular legal question categories. These categories are based on what everyone is asking and answering.