Real Property: Future Interests: Remainders vs. Executory Interests

Remainders vs. Executory Interests:

• Executory Interest = future interest created in a transferee (third party), which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or his heirs (springing).

Shifting Executory Interest – always follows a defeasible fee and cuts short someone other than the grantor.

EX: “To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs.”

B = shifting executory interest

B does not have a remainder because remainders never follow defeasible fees.

A = fee simple subject to B’s shifting executory interest

RAP: Conveyance doesn’t violate RAP because of the 1 year limit on B’s power.

EX: “To A, but if A uses the land for nonresidential purposes at any time during the next 20 years, then to B.”

B=shifting executory interest

A=fee simple subject to B’s shifting executory interest

RAP: Conveyance doesn’t violate RAP because of the 20 year limit on B’s potential power.

Springing Executory Interest

EX: “To A, if and when he marries.” A is unmarried.

A=springing executory interest

O=fee simple subject to A’s springing executory interest

RAP = Conveyance doesn’t violate RAP because we will know by the end of A’s life if the condition is met or not