FUTURE INTERESTS AND PERPETUITIES Future interests - Are either remainders or reversions – they are estates that are vested in interest but not presently rested in possession - = where possession and enjoyment is deferred to a future date - Presently existing estates, but the right to possession is postponed until the termination of a prior limited estate (death of someone) - E.g X grants land to Y for life – Y receives a life estate entitling Y to immediate possession – X retains fee simple estate (if X dies, goes back to X’s estate) - E.g: X to ‘Y for life and then to Z in fee simple’ – will give Z a fee simple estate in remainder (Z gets possession after Y dies) - While a present interest gives the grantee a right to immediate possession, a future interest will grant title, but defer possession until a later date - Deal with situations where a life estate or leasehold is created and there is an expiration period that necessitates future dealings with that interest - E.g. devises land ‘to my husband for life and on my husband’s death to B – B’s right to possession is postponed until finalisation of the life estate Remainder and reversion interests and definitions - With remainder interest – grantor sets out that the remainder of the estate will pass to a 3rd party - Reversion interest arises where the grantor has not set out exactly where the remainder of the estate will go 2 classifications of estate in remainder 1) vested remainder: present interest (2) Contingent remainders: no interest until particular conditions are fulfilled Contingency must be met before the vesting can occur - An estate in land is either (a) estate in possession – gives an immediate right to possession and enjoyment of the land (b) Estate in remainder – gives a future right to possession and enjoyment (c) estate in reversion – a future right to possession and enjoyment by the original grantor of his heirs after the termination of a prior estate granted or a failure to dispose of an ultimate interest – e.g. leasehold comes to an end - reversionary interest can occur when someone rents out their property - With a remainder interest, the grantor sets out that the remainder of the estate will pass to a third party, while a reversion interest arises where the grantor has not set out exactly where the remainder to the estate will go. - The reversion, by presumption, goes back to the grantor Legal Remainder Rules - Must never be a gap in possession (Seisin must never be in abeyance) - Grantor was limited by the nature of the schemes of estates and such, grantor could not changes expressed rights - Any remainder or reversion after a fee simple estate was void - Y in fee simple, but if Y dies without children in the lifetime of Z, then to Z in fee simple – Z void - Y and his heirs for long as the land shall be used as a school, and then to Z and his heirs – Z void here as well - Can’t give 100% of something and then attempt to give 100% to another - A remainder was void unless it followed a prior particular estate created by the same instrument - Y and her heirs commencing in 2 years: Void as gap in seisin – cannot have 2 year gap under legal remainder rules - Remainder was void if it was designed to take effect in possession before the natural determination of the particular estate - The following is void: Y for life But if she remarries then to Z and his heirs remainder to Z – Void as illegal attempt to cut short Y’s estate - Compared to: Y for life Or until she remarries, then to Z and his heirs: okay as inherently liable to determination (Life estates can be subject to a condition) - Abeyance of seisin (possession) is not allowed; contingent remainder must be capable of vesting a must in fact vest during the continuance of the prior possessory estate or at the very moment of its determination - By X to Y for life and after his death to such of Y’s children that graduate in medicine – revert back to X after Y’s death: illegal remainder rules here as ‘after death’ creates a gap - Y for life and then to such of Y’s death – remainder capable of vesting – no gap here= valid Immediate v Future interests - Estates in land may be classified based on whether the right to occupy the land is immediate or sometime in the future - An estate is the right to possess and use the land for the period of time for which it has been granted - An estate in land with the right to possession postponed to the future, is just as much an interest in land as an estate that is entitled to immediate possession – it is a pre-existing title to land Vested or contingent interests - A vested interest is one that is certain to take effect in possession – identity known – no pre- condition – if vested, no Perpetuities Act - A contingent interest may never fall into possession E.G Y for life and then Z in fee simple – gives Z a vested remainder (no precondition) (Vested) VS - Y for life and then to Z in fee simple if A reaches the age of 21, assuming Z has not already reached 21, gives Z a contingent remainder: Pre-condition here is turning 21 (contingent) Destructibility of Legal Contingent Remainders - Even if remainder is valid from the start, it can still be destructive Natural Destruction: Y for life and then to Z in fee simple if Z graduates in law: where Y dies before Z graduations the exception of en ventre samere applies (in your mothers’ womb) ‘coming along’ Surrender: X for life, then to Y for life if she graduates in law, then to Z in fee simple; X could at any time convey his life interest to Z and thus destroy Y’s interest Merger: Y for life, then to Z for life if she attains the age of 21= If X, as the fee simple reversionary, conveyed their interest to Y before Z attained 21, then Z’s contingent remainder would fail Forfeiture: Y for life, remainder in fee tail to the heir male of Y = where the male heir is not yet born and Y purports to convey to Z in fee simple, then Y ‘forfeits’ his life estate and thereby destroys the contingent remainder to his son= tortious conveyance Disclaimer: where the holder of a prior ‘particular estate’ disclaimed or disowned the estate, which could occur at any time, the contingent remainder supported by the ‘particular estate’ would fail – if fail, likely to go back to grantor Hamesley v Newton - Q to the court was would the surrender of the life estate accelerate the vested interest - Malcolm Hamesley devised Fairfield – Great nephew Leonard Collin for life and remainder to Leonard’s eldest living son (Leonard had two sons) - Court held that remainder vested rather than contingent Conditions precedent v conditions subsequent - Precedent or subsequent to the vesting of the interests - Condition precedent: Y for life and then to Z in fee simple if Z reaches the age of 45 - Conditions subsequent: X grants purple acre to Y in fee simple if she remains a law lecturer Rule in Shelley’s case - Related to policy ideas: words of purchase v words of limitation - When the ancestor takes an estate of freehold by gift or conveyance, and in the same gift or conveyance an estate is limited, either immediately or later on, to that ancestor’s heirs in fee simple or fee tail - The words ‘to [ancestor’s] heirs’ are words of limitation of the estate given to the ancestor – Not words of purchase conferring any interest upon the ancestor’s heirs - To X for life and then to the heirs of X was construed as bestowing a fee simple estate on X = fee simple as grantor tried to create fee simple here - Rule used to prevent a narrowing down of the estate into the future Example in Horden v Permanent Trustee co: ‘To the use of Elizabeth Slater for her life and the heirs of her body lawfully to begotten under the same uses’ – gave Elizabeth a fee tail estate - Shelly rule abolished in Conveyancing Act 1919 S17 - Gifts such as the remainder in this case, left on the basis that they will go to one of several children to be identified when the life tenant dies, is seen as a gift where the limitation is restricted to the protection of the prior interest, which if terminated, ca then allow the subsequent gift to take effect according to the circumstances prevailing at the time of cessation of the earlier interest Intervention of equity - Feudal dues – most onerous taking place upon the death of the holder of freehold - Prohibition against the disposal of land by will - Rigid rules for the conveyance of land - ‘the use’= a trust in modern world - A gift by X to Y and his heirs to the USE of Z and his heirs in fee simple gave the legal estate to Y who held it on trust for the beneficial enjoyment of Z’ Springing uses: (defied gap rule) X and his heirs to the use of Y and his heirs in 2 years time Shifting use: To X and his heirs to the use of Y and his heirs BUT if Z marries then to the use of Z and his heirs (‘But’ is valid in equity) The executory devise: defied common law rule against disposition of land by will NOTE: the above three equity interventions are only valid in equity, i.e.