(A) and (B) could include personal property, and (C) is just one example of an estate.
An estate for years is the only “less- than-freehold” estate listed here. An unrecorded vendor’s (seller) deed would transfer a freehold estate, provided the grantor owned one and there was valid delivery (recording is advised but not required).
Grantors should grant title using the same name in which they acquired title. If they don’t, this may cause title search problems. However, all that is required for a valid transfer is delivery, and that involves the intention of the grantor to relinquish all control to the grantee. Under choice (B) the grantor can struc- ture the transfer so he or she keeps a reversionary interest. A life estate can be for the life of more than one person.
One of the key features of a fee simple is that the property can continue in the same family line through inheritance. The two most popular forms of free- hold estates are fee simple (including absolute and conditional fees) and life estates.
A reversion occurs when the land returns to the grantor or heirs of the grantor. A remainder occurs when the land remains away from the grantor or heirs
An estate for years is a leasehold. Next to the fee simple absolute and the defeasible fee, the life estate is the most common freehold estate today. While it is not an estate of inheritance, it is an estate for an indefinite, or unpredict- able, duration.
This is an example of a fee simple determinable estate. The farmer sold a portion of his farm to the railroad company with the condition, as long as it remains a rail line. In the event of abandonment, the rail line property would revert back to the farmer or the farmer’s heirs.
Under (A) and (B) you would have a claim for money damages if it turned out the grantor did not have the title as promised. There is more assurance of recovering money from the title com- pany than from a grantor. For example, perhaps some defect in the title, owing to some off-record risk (such as forg- ery in the chain of title), prevents clear ownership of title. Title insurance companies only insure the title subject to stated exceptions; they cannot correct the actual defects that may be found in the title. Also, under (C), a deed could be used to transfer a life estate, which is not fee simple ownership.
Leaseholds are less than freehold based on ancient feudal classifications in which only “freemen” had protection of the courts and the serfs had no interest in land, although they had possession under leases.
When Jonathon dies, his life estate ends, and the property will revert back to the grantor. Rights of reentry are found in leases and also in a fee simple subject to a condition subsequent in which the condition is broken or violated.
It is indefinite in time; unless conveyed to another, it will come to an end only in the event the owner dies without hav- ing left heirs or a valid will (in which case escheat occurs).
Possession, control, enjoyment, exclusion, and disposition are the bundle of legal rights that come with ownership of real property.
Life estates are frequently created by will—the husband leaves the home to his wife for life and then to their children. There could be several “life tenants, or the survivor of them.” The owner of the fee (grantor of life estate) is responsible for any mortgage prin- cipal payments, but the life tenant is responsible for carrying charges, such as interest, taxes, and maintenance.
While a defeasible fee (one subject to a condition) and a life estate can be transferred by deed, they must be clearly specified. An estate for years is transferred (demised) by lease. A fee simple absolute is one that is not qualified (or conditional).
The measuring life for a life estate can be that of someone other than the grantee—Abe to Ben for the life of Carl. Thus, upon Carl’s death, the property will revert back to Abe. If Ben predeceases Carl, Ben’s heirs will have an interest in the property until Carl dies. This is called an estate pur autre vie.
During her life, she has ownership of a life estate. Her children have a remain- der interest. Despite having ownership rights in the property, the widow can’t commit “waste,” such as tearing the structure down or converting it into a triplex rental.
The largest bundle of rights attaches to a fee simple estate
After the death of both spouses, the life estate will end and ownership will remain away from the grantor’s estate. The hospital’s remainder interest then will ripen into a fee simple absolute estate. Here is another way to remember what a remainder estate is—it is the estate that remains after the existing life estate terminates.
A reversionary interest under choice (D) is when the property will return to the grantor od the grantor's heirs. Here, the property "remain" away from the grantor and Cynthia will be the fee owner provided that (contingent upon) Bernice dies leaving no heirs. Remainders are either vested (owned now) or contingent.
A devise is a transfer by will (do not confuse with demise, which is a transfer by lease), but there is no estate left for heirs after the owner of the life estate (life tenant) dies. Because the buyer, lender, and lessee take their interest with knowledge, subject to the life estate, their interests cease when the life estate ceases. Lenders rarely lend on a life estate; if they do, they may require a term life insurance policy or an agreement with the remainderman as further security. Incidentally, any buyer of a life estate would then own a “life estate pur autre vie.”
This is the classic definition of estate (Latin for “status”). It ranges from absolute ownership to mere possession.
When a person dies without leaving a valid will, he is said to have died intestate.
This is a freehold estate in fee simple, which can be terminated upon the hap- pening of an event such as marriage. It also is called a determinable fee or qualified fee.
All but (C) are within the “bundle of rights.” The woman has a fee simple estate. She may not violate the govern- mental limitations.
The probate court assigns an administrator to administer the estate of those who die intestate.
