Estates and Future Interests - Ben Lovell Law Blog

Trusts and Estates

Estates

Estate are present possessory property interests.

Future interests

Future Interests are interests in property (real or personal or in trust) which has the privilege of possession or enjoyment in the future. It is important to remember that remainders are real things with legal rights

Every Estate has a quantum--a duration. The quantum determines what follows the estate

Fee Simple Absolute - our best friend in terms of the fees. the lots and lots of fees. To create FSA one assigns "To A and heirs." If no quantum is specified, "To A," for example, then the law assumes Fee Simple Absolute. It is the bundle of rights with the sticks in the bundle all present and accounted for

Life Estates

Enjoyment of the interest for your natural life. Life Estates are alienable if you can find a buyer. If a life estate is transferred the reversion still happens and whatever was taken against that life estate is void, for it no longer exists.

Life estates are the most common units of estate planning and the best way to do it is in trust. They are:

mortal, lasting only as long as a life
most of the time they have a reversionary interest or remainder
common for a life estate to be for a surviving spouse when then transfers to the children

Flow Charts

A couple of flowcharts created by Professor Phoenix Cai on Estates and Future Interests. The charts are dynamically generated in mermaid.js. The Fees were cumulatively generated over many years.

Estates (What You Get)

graph TD
    A[ESTATES<br/>* what you get *<br/>]-->B[Leasehold<br/> Estates]
    A-->C[Freehold <br/> Estates]
    subgraph Quant[Quantum]
    B-->D(Terms of Years)
    C-->E(Life Estates)
    end
    C-->F[FEES<br/>SIMPLE<br/>]
    F-->H(Fee Simple<br/>Absolute<br/>)
    F-->I(Fee Simple<br/>Determinable<br/>)
    F-->J(Fee Simple<br/>Subject to<br/>Condition<br/>Subsequent<br/>)
    F-->K(Fee Simple<br/>Subject to <br/>Executory<br/>Interest<br/>)
    classDef title fill:#68d391,stroke:#59981A,stroke-width:5px;
    classDef orange fill:#FEB06A,stroke:#276749,stroke-width:1px;
    classDef yellow fill:#A3EBB1,stroke:#276749,stroke-width:1px;
    classDef purple fill:#44EE77,stroke:#276749,stroke-width:1px;
    classDef red fill:#ECF87F,stroke:#276749,stroke-width:1px;

    class F,H,I,J,K orange

Interests (When and How You Get It)

graph TD;
    A[INTERESTS<br/>* when and how *<br/>* you get it *<br/>]-->B[Present Interest<br/>* see Estates Chart *<br/>];
    A-->C[Future Interests]
    B-->D[Future Interests<br/>Created In Grantor];
    C-->D
    D-->E(Right of Entry);
    D-->F(Possibility of Reverter);
    D-->G(Reversion);
    C-->H[Future Interests<br/>Created In Grantee];
    H-->I[Remainders];
    H-->J(Executory Interests);
    I-->K(Contingent Remainder);
    I-->L[Vested<br/>Remainder<br/>];
    L-->M(Indefeasibly Vested);
    L-->N(Vested Subject to Open);
    L-->O(Vested Subject to<br/> Divestment);
    classDef green fill:#68d391,stroke:#276749,stroke-width:2px;
    classDef orange fill:#c6f6d5,stroke:#276749,stroke-width:1px;
    classDef notice fill:#FEDE00,stroke:#276749,stroke-width:1px;
    class B notice

Different Features of Damnable Fees

graph LR;
	A(Fee Simple Determinable)==>|Contains a |B[Possibility of Reverter];
	C(Fee Simple Subject to Condition Subsequent)==>|Contains a |D[Right of Entry and Power of Termination];
	E(Fee Simple Subject to Executory Limitation)==>|Is basically a <br /> Condition Subsequent <br /> with an <br /> <br /> |F[Executory Interest];