Real Property – Present Estates

Freehold (owned or possessed outright) or Non-Freehold (possessed through lease)

Three types of Freeholds: LEFTS

LE – life estate - "O to X for life, and remainder to Y."

FT – fee tail - "O to X and the heirs of her body". A fee tail could only pass to the grantee's heirs, which kept the property in the grantee's family. When there is no more living family, the interests revert back to the grantor. Fee tail was abolished in vast majority of states, including New York, and is instead treated as a fee simple in the Grantee). S – fee simple - "To X and X's heirs and assigns" or "To X and X's heirs" or "O to X."

Three types of Fee Simple: SAD

Subject to a condition precedent ("To X, upon the condition that X passes the bar exam; otherwise, to Y." No title passes to X until X passes) or condition subsequent (BOP: "To X, but if...." "To X on condition that...." "To X provided that....", which creates a right of reentry, not automatic forfeiture).

Absolute (no condition).

Determinable (conditioned on an uncertain future event, which if it occurs results in automatic forfeiture SUD: "So long as...." "Until it is not used for...." "During the period is used for...."). The law does not favor forfeiture, so the language must be clear, and the possibility of forfeiture will render title unmarketable. ------Shelley's Case: To avoid tax to the Grantee, "To Grantee for life, remainder to Grantee's heirs." This delayed payment of transfer tax for the life of the Grantee.

Doctrine of Worthier Title: To delay tax on Grantor's estate, make inter vivos gift "To Grantor's heirs, remainder to the grantor." Transfer tax not paid until all of Grantor's heirs died and the property reverted to the grantor.

Shelley's case and the Doctrine of Worthier Title were ways at feudal law for the King to prevent these tax loopholes. You may see these on the MBE (look at them with skepticism as they will likely appear as incorrect answer choices), but both have been abolished in most jurisdictions, including New York, though the Doctrine of Worthier Title today still has some applicability with respect to trust construction (where the settlor of an inter vivos trust seeks to revoke it without the permission of a remainder interest described simply as "the grantor's heirs").