I. Estates in Land A. Estate in land 1. It is a possessory interest in land measured by its duration B. words of purchase 1.

they designate who is to take an estate by grant or will. To Crippen until he sells his farm To Crippen are the words of purchase. C. Words of limitation 1. words of limitation defined the duration of the estate granted 2. Example: to Anna Bolan unless she has her 11 finger surgically removedunless she has her 11th finger surgically removed are words of limitation, denoting a defeasible fee simple (one capable of being forfeited). D. non-freehold estates * holders are not seise d of the land they do not hold legal title- which comes into play, for example with the destructibility of contingent remainders. 1. estate for years 2. tenancy from period to period (periodic tenancy) 3. tenancy at will 4. tenancy at sufferance E. three types of freehold estates (STaLe) 1. fee simple absolute i. Magic words: a. At common law: .and his heirs. Anything less was assumed to create only a life estate with a reversion in the grantor/transferor. NO OTHER WORDING IS PERMISSIBLE. This applied only to conveyances, not devises. b. Modern way: not necessary to create a fee simple absolute. Unless limited assumed to be fee simple absolute. ii. absolute land ownership iii. at any given time all the rights, president future, and a piece of land must add up to a fee simple iv. key traits a. it is inheritable by holders heirs b. it is alienable inter vivos and devisable c. it is not subject to defeasance (which is what absolute signifies; a fee simple defeasible is subject to the possibility of forfeiture) d. it is of infinite duration v. Inheritance of Fee simple e. Heirs at common law when a person dies intestate, the decedents real property goes to heirs. vi. Conveyances ambiguity: Assume the grantor gave all the grantor had. When its ambiguous its a fee simple absolute. 2. fee tail i. magic words

a. At common law: to John and the heirs of his body b. Modern view: Most states have abolished the fee tail and view the magic words to create only a fee simple estate. ii. a freehold estate inheritable only by the grantee's blood lineal descendents. iii. As long as there are blood descendents of the original grantee, the estate continues; if there are not, the estate automatically reverts to grantor (or his estate). Thus, the fee tail estate is not infinitethe grantor retains a reversion. 3. life estate i. an estate whose duration is measured by the life or lives of one or more persons F. curtesy 1. the husband's counterpart of the legal life estate called powerin other words, the interest husband takes in lands owned by his wife when she dies. It is a common-law rule granting the husband a life estate in all the lands in which his wife at a fee interest will the two were married. As long as issue were born alive, capable of inheriting. (Contrast with our, or wife only gets a life estate in one third of her husband's lands and issue aren't relevant.) 2. Divorce terminates the husband's right to curtsy 3. during the wife's life, the curtsy is inchoate, is not an estate, and is not therefore reachable by creditors 4. Curtsey has been abolished or seriously modified in almost every state II. Future Interests - six types (ViCE ReaPeR) Vested; Contingent; Executory interest; Reversion; Possibility of Reverter; and Right of Reentry. *the interest leftover when the grantor conveys away less than his entire estate (life estate, fee tail, non-real estate). It is a generic term for remainders, executory interest, reversions *the future interest is not presently possessory, but it may become so 1. Vested i. it means that the one who has the interest is ascertainable; and the estate has no condition precedent. ii. Future interest retained by the grantorreversion, possibility of reverter, and power terminationare always considered vested even though they are not at all certain to take effect. Significance: investing is important in relation to the rule against perpetuities, which invalidates future interest capable of vesting remotely

iii.

2. when grantor does not convey a fee simple absolute, these are the only three interests you may retain (ReaPeR) i. reversion

possibility of reverter right of reentry for condition broken (also called right of entry or power termination). 3. To prevent future interests that can be created in a transferee (ViCE) i. remainders (vested and contingent) ii. executory interests (shifting and springing) A. remainders: Two Types *generally (PEPSI) i. future interest ii. created in one other than the grantor iii. to become possessory (a present interest) iv. on the natural expiration v. of a preceding estate (to another individual) vi. and the same instrument. vii. Note: remainders analogize to a reversion, but is created in 101 other than the grantor. viii. At common law: only follow a life is estate or fee, not a lot of fee simple not real estate. ix. Modern rule: it can follow a life is stuff you fail, or listed non free-hold estate, but still cannot follow a fee simple estate x. must be expressly created xi. leases: under common-law, a remainder cannot follow a lease (only a freehold estatea life estate or a fee tail). But under modern rules yes (can also follow non-freehold estates for years) xii. a remainder can be a fee simple or fee tail, life estate, or estate for years. xiii. Ambiguity: iif the conveyance is unclear as to whether it creates a vested remainder or a contingent remainder the courts prefer a vested remainder. xiv. Ambiguity: if a conveyance is unclear as to whether it creates a contingent remainder or and executory interest courts prefer the contingent remainder. 1. vested remainder: three types (STAVe Off) i. indefeasibly (or absolutely) vested remainders a. a future interest created in ascertained person or persons in being (other than the grantor) b. which is certain to become possessory (the person or persons who hold the remainder when the preceding estate terminates are certain to take possession of the property in which the remainder was created) c. when the preceding estates terminates d. and it cannot be defeated or terminated

ii. iii.

*compare: the inability to be defeated or diminished distinguishes an indefeasibly vested remainder from the other two vested remaindersa vested remainder subject to open and a vested remainder subject to total divestment. ii. vested remainder subject to open (subject to partial divestment) (EsCAPeD) a. is a future interest in the form of the remainder which is: b. created in the class of persons (like children) c. at least one of whom is ascertained and in existence d. which is certain to become possessory when preceding estates terminate e. and is capable of being diminished by others entering the class f. most common in gifts to someone's children vested remainder subject to complete (or total) divestment *always this has been fertile during life, devisable, and inheritable; a. it is a future interest b. created a party other than the grantor c. which is created in a person ascertained and in being d. and is subject to the condition subsequent but not a condition precedent (in other words nothing stops the person from taking possession, but the occurrence of some of them can take it away.)

iii.

2. contingent remainder i. it is a future interest in the form of a remainder that is ii. subject to a condition precedent (and other word in the previous estate ends, the estate cannot become possessory and last the condition precedent has also occurred) or created in favor of an unborn person or is to be taken by an unascertained person. *has always been devised irritable (unless the remainder Skinners contingent date holders other survivalist which case it can exist in no one but the grantee), but was not transferable during life, is now in most states * an infinite number of contingent remainders can follow a freehold estate

iii.

*Modern rules, contingent remainders are transferable. They are alienable (assignable),Devisable (via will, subject of course to the contingency in the grant) and inheritable (and intestacy)as long as the remainder is not contingent on survival, in which case it's not alienable. *At common law: contingent remainder was devisable and discernible, but not alienable during life. *Discern between a vested remainder subject to complete divestment from the contingent remainder: a vested remainder can become possessory when the prior estate expires even though it can subsequently be divested; look for but if language or provided that ifin the clause after the grant. A contingent remainder can take two forms. It is created in an unascertained or unborn person, or it's reliant on the occurrence of a condition precedent (which must occur before the previously stated ends). Look for F language in the same clauses grant. Significance: A vested remainder is not subject to the rule against perpetuities, so it can vest remotely; a contingent remainder is not vested, and so it must vest, if at all, within a life in being +21 years B. executory interest: Two Types *Generally i. future interest which, unlike remainders, can become possessory only by either divesting the interest of another grantee (a vested remainder a defeasible fee), or following a gap divesting the grantors possessory interest ii. make things easier on yourself this way: there are only two types of interests the transferee can takea remainder (vested and contingent) or a executory interest. If an interest in the transferee isnt a remainderin other words, it cannot become possessory on the natural termination of the prior estateit has to be an excretory interest

iii. Distinguished from a remainder: a. a remainder takes on the natural termination of the preceding estate; an executory interest is not. Thus, if an interest in a third-party does not take on the natural termination of the preceding estate (on the death of a life estate holder) it must be an executory interest iv. *are subject to the rule against perpetuities because they are not vested (until they become possessory)

1. springing executory interest i. divests a transferor of possession divest the transferor in the future (this is known as a springing executory interest) takes it away from the grantor

2. shifting executory interest i. divest or cut short some interest in another transferee 3rd party (this is known as a shifting executory interest, or

*remember: Spring forward (from grantor) and should decide (from another grantee).

C. reversion 1. the future interest arising in the grantor when she conveys an estate of shorter duration than the estate she possesses (the grantor has a fee simple and he conveys a detail, like estate, or leaseholdthe grantors interest is reversion). 2. A reversion is alienable inter vivos, divisible and inheritable 3. three Estates grantor can grant the creator reversionary interest i. life estate, leasehold estate, and fee tail ii. Mnemonic: LiL FEET (Life; Lesehold; Fee Tail) 4. difference between a reversion and the possibility of reverter and the power of termination i. a reversion because possessory when a lesser estate inevitably terminates (a life estate in not realistic). The other to follow defeasible fees, which are states that may never terminate. The sign conveying a retail estate leaves a reversion. Although this doesn't exactly fit this role under most modern rules you can create a fee tail anyway. 5. Reversions are always vested from the time they arrived since i. the holder of interest (the reversion) is ascertainableit's the grantor; and ii. the estate has no condition precedentwhen the grantee's estate terminates, the grantor automatically regains possession 6. rule against perpetuities i. reversionary interests are not subject to the rule because such interests are considered to best the moment they arise, and not at some future time. Reversionary interest are the part of the grantor's estate not conveyed to the grantee. D. possibility of Reverter 1. it is a future interest 2. which the grantor retains 3. when he conveys a fee simple determinable estate

4. a possibility of revert or only can arise when the grantor conveys the fee simple determinable 5. possibility of inverter is not subject to the rule against perpetuities, since it is vested from the moment it is created 6. at common law, a possibility of reverter was NOT alienable inter vivos and devisable, but it was inheritable. Today most courts hold that possibilities of her murder are inheritable, divisible, and alienable inter vivos and some states enacted statutes that change the common law. 7. Waivable: No, because a possibility of reverted results in an estate automatically reverting to the grantor on the happening of the stated event. Since the grantor does not need to take positive steps for this to happen, it cannot be waived, either. 8. Forfeiture of the estate: Does not result in forfeiture of an estate. E. right of reentry/power of termination 1. it is a future interest 2. in which the grantor retains (so it's vested) 3. when he conveys an estate subject to a condition subsequent (fee simple subject to a condition subsequent, or leasehold, or life estate subject to a condition subsequent) 4. it can only follow an estate subject to a condition subsequent! 5. Note: at common law, right of entry was not alienable inter vivos or devisable, but it was inheritable; according to most modern courts, rights of entry are devisable and inheritable but not alienable during life (unless accompanied by a reversion). Statutes, of course, may make the right of entry devisable. 1. waveable: Yes, at the grantors option 2. rule against perpetuities: Doesnt apply because it is created in the grantor. 3. Forfeiture of the estate: Yes, exercising power of termination always results in the transferee's forfeiture of the estate. F. Restatement (third): several major changes to simple the classifications of future interests 1. eliminates the historical division of future interests into 5 types (remainders, executory interests, reversions, possibilities of reverter, and rights of entry) and simple categorizes all future interests as future interests. Additionally, all future interests are alienable, devisable, and descendible if the owners death does not cause the interests termination (unless subject to valid restraint on alienation) 2. eliminates the traditional categories of future interests as indefeasibly vested, vested subject to complete defeasance, bested subject to open, and contingent, and replaces them with only one distinction vested or c contingent. Contingent: if for any reason, it might not take effect in possession or enjoyment. Further, it provides that either a vested or a contingent future interest can be subject to open.

3. Class gifts: in cases of future interest transferred to a class that is still open to new members, the interest of each class member existing from time to time is classified as subject to open. The future interest may be classified either as vested or contingent. However, the interests of potential class members are always classified as contingent. III. Defeasable Fees: Three types * Generally 1. * it is an estate with the potential of being forfeited on the happening all of a specified event; it is potentially infinite in duration (if the specified event never occurs). 2. Note: all freehold and non-freehold estates can be defeasible 3. note: as with the fee simple absolute, defeasible fee is freely devisable, and inheritable and alienable during life. A. fee simple determinable (also known as a fee simple determinable on special limitation) 1. Magic Words: (so long as) ( during the continuance of) (until the board no longer uses) 2. estate automatically terminates on happening of a specified event 3. the fee simple estate automatically terminates as a matter of law. B. fee simple defeasible subject to a condition subsequent (also known as a fee simple subject to a condition subsequent) 1. Magic Words: (on condition that) 2. the grantor can terminate the estate on happening of an event; if he doesn't, the estate continues 3. if he does not reenter and retake the property when the event occurs, the grantee's estate continues. 4. It is freely devisable, inheritable and alienable C. fee simple defeasible subject to an executory interest/limitation 1. less common 2. the possessor can be divested of possession by another grantee (not the grantor) on the occurrence of the specified event that may, in fact, never happen. 3. A grantor transfers a defeasible fee simple, either a determinable fee or a fee simple subject to condition subsequent, and in the same instrument creates a future interest in a third party rather than in himself. The future interest in the 3rd party is called an executory interest. Sometimes used to limit it in such a way so it lasts only 1 generation. D. Ambiguity 4. Because courts want to avoid the forfeiture of esates, a conveyance that contains both durational language and a power of termiaion may be construed as creating a fee simple subject to a condition subsequent because the forfeiture is optional at the grantrs election rather than automatic. IV. The Trust

A.

def: an important and regularly used device in estate planning. Core is the separation of the legal and equitable title. The trustee holds legal title to the rust property and manages that property for the benefit of the beneficiaries, who have the right of beneficial enjoyment of the property. Trustees powers: sell, reinvest. Beneficiaries: get the net income from the investment, and upon termination, the trust the assets as they exist are handed over to the designate beneficiaries, free of the trust.

B. Dual ownership: made possible because of the existing of separate courts of law and equity. Trustee was legal owner, it is subject to orders of an equity court, which enforces the trustees duties to the beneficiaries, who are said to hold equitable interests, that is, interests enforceable by courts of equity. Typically beneficiaries hold equitable interest that correspond to the legal possessory estates and future interests you have studied. C. trustee: is a fiduciary. Thus is subject to stringent duties in managing trust property. Must act for exclusive benefit of the beneficiaries, and is not permitted to benefit personally. IF breached, is subject to personal liability by a court. D. benefits: settlers can protect the beneficiarys interest by making them inalienable. Spendthrift trust, are possible cuse American courts hold that the common law rules against restrains on alienation, do not apply to beneficiaries equitable interest. So trusts can be drafted in such a way that trust beneficiaries have no power to reach those interests to satisfy beneficiaries debts. And in a few states have enacted statues that permit settlers to create trusts in which the settlors own interests, usually al life estate, is immune from creditor claims. E. Spendthrift trust: crated because of Broadway National Bank v Adams. SEE FULLE CASES. F. Why a trust is valuable (from class): There is no proceeding with a trust/with a will its filed in court. 2.) When trust is to be distributed there is no notice requirement beyond that set forth in the doc. IF you cut out your kids from the will, there will be a notice, they can contest. Trust has no notice requirement to all heirs. Some states trusts are cheaper. Not in MN. State probate requirements matter. Trusts take effect immediately, can be funded by a single dollar. Just have to have: trustee, grantor, beneficiary and a corpus (body of the trust a dollar). Within the trust you can make distribution of income totally dependant on the trustees discretion G. Kphm C/ Gray. Restraints on the Alienation of Property 1. The fallacy in the Broadway ruling, is that the objection that it defrauds creditors isnt the only reason why equitable life estates cant be made inalienable an free from debts. 2. True reason: that inalienable rights of property are opposed to the fundamental principles of the common law that it is against public policy that a man should have an estate to lie on, but not

an estate to pay his debts with. Against pub. Policy to have the benefits of wealth without the responsibilities 3. effects of of spendthrift trusts would be to form a privileged lass, who could indulge in every speculation, could practice every fraud, and yet, provided they kept on the safe side of the crime law, could roll in wealth. Would become an aristocracy. H. Notes and Questions 4. John Chipman Gray denounced spendthrift trust on all scores: precedent, policy, and logic. But now its adopted in the majority of states. 5. Spendthrift trust are only allowed for inherited wealth. A person can set it up for another but not for himself. ii. they are permissible for others. But its mixed on if you can do it for a grantor. You ought not be able to set these up for yourselves. iii. Does the rule changes based on the creditor? It does. Why? Because we have competing equities. 6. perpetual/dynasty trusts: trusts that can continue to control the disposition of wealth forever into the future. It changes the Rule Against Perp as it apples to certain kinds of trusts. I. Savings clause in a trust: a perpetuities saving clause. Designed to terminate the trust, and distribute the assets at the expiration of specified measuring lives plus 21 years, if the trust has not earlier terminated. Suppose that the testator wants to create a trust paying income to her only child A for life, then income to As children for their lives, then distributing the principal to As grandchildren. Example page 290. On page 23 of my notes V. Rules Furthering Marketability by Destroying Contingent Future Interests *Relevant other rules and terms 1. Doctrine of Merger i. present and future successive it states merge when they are held by the same individual; the rule does not apply when another vested estate comes between one person's estates ii. Can be extended where the life estate is followed by a contingent remainder and reversion. 2. Class closing rule (the rule of convenience): can save the interest. Cuts off the possibility of new entrants to a class at the earlier of two times: i. ii. iii. iv. the natural or physiological closing of the class, that is when the possibility of births or adoptions ends OR the premature or artificial closing of the class through the operation of the rule of convenience.

v.

Restatement: class closes once the distribution date if a beneficiary of the class gift is then entitled to distribution.

vi. vii. Exception: rule of convenience usually prevails, but the rule of convenience yields to evidence of a contrary intent. This doesnt ever happen though. viii. Effects: protects the distributes from receiving a defeasible interest, which is less useful. _________ rule of construction applies to class gifts where there is no expression of the time that all members of the class should take on the class closes when a member of the class can call for distribution of a share of the class gift. iii. Significance: no after more numbers can take iv. rationale: to avoid dealing distribution beyond that. Necessary and at the same time to avoid rebates in the future. 3. Issue i. same thing as descendents. Refers to as lineal descendents (children, grandchildren, and so on down the count that person as their ancestor). Thus it does not include nieces nephews in-laws and the like. ii. Inhertiance b. Common law: if the decedent leaves issue, they take the to exclusion of all other kindred. Issue = descendants. c. Modern way page 196 4. Heir i. an arrow person is one entitled to inherit property by the laws of intestate succession. Heirs inclusively determined at the time of death. ii. There are no such things as heirs of a living person. iii. An Immediate gift to the heirs of a living person must go to the presumptive heirs those who would take if the person died now iv. Spouse was not an heir at common law. Spouse was given only dower or courtesy in land. Today in all states, the spouse is designated as an intestate successor of some share in the decedents land; size of the share depends on who else survives. v. Inheritance d. Common law: e. Modernway: first issue, then parents; and if none, then collaterals. 5. More on inheritance generally/land transfers upon death i. A child born out of wedlock was filius nullius, the child of no one, and could inherit from neither mother nor father at common law.. Today children can inherit from either. i. ii.

Adoptive children today inherit from adoptive parents, as well as natural parents. ii. Ancestors: By statute parents usually take as heirs if the descendent leaves no issue.

iii. Collaterals: all persons related by blood to the decedent who are neither descendants nor ancestors are collateral kin. Bros, sis, nephews nieces, uncles, aunts, and cousins. If a decedent leaves no spouse, no issue, no parents, the decedents bros and sis take in all jurisdictions. iv. Escheat transfer at death. If a person died intestate without any heirs, the persons real property escheated to the overlords in feudal times. Now such property escheats to the state where the property is located. If no next of kin found, went to the crown back then under idea of bona vacantia (goods without an owner). Today goes to the state. Good without an owner. Because they are gvt they take it. v. Allodally transfer at death: king takes back it because he was the author of it. Their right to take as original owner doesnt have to be proven. State steps it in because state owned it first.

vi. A. The destructibility rule 1. was valid at common law but was abolished by most modern courts and in some states by statute 2. holds that a contingent remainder must vest before or at the moment the preceding estate finished, or it is destroyed. 3. Note: although modern courts generally have abolished the distractibility rule, indestructible contingent remainders are still subject to the rule against perpetuities, so they must vest, if at all, within a life in being plus 21 years. B. Rule in Shelleys Case 1. One instrument 2. Creates a freehold estate (life estate) - not non-freehold estates in land in A, and 3. Purports to create a remainder in persons described as As heirs (or the heirs of As body), and 4. The life estate and remainder are both legal or both equitable 5. *the remainder becomes a remainder in fee simple (or fee tail) in A. (this is all that the Rule of Shellys Case does.) 6. Merger may then come into play. There a life estate in A merges into a vested remainder in fee held by A if there isnt another vested estate between the two estates. 7. Current Status: Some have used it anyway.

8. Its a rule of law; not of construction C. Doctrine of Worthier Title 1. Only applies to inter vivos conveyances. Not to wills or devises. 2. Grantor cannot create a remainder in his own heirs if the heirs would've taken the same estate by descent. (can either be by remainder or executory interest) 3. Its a rule of construction not a rule of law: this is important because if the grantor expresses a contrary intention, that intention will be followed. If it were rule of law (like the ruling Shelley's case), it would apply regardless of the grantors intent 4. Reasoning: It furthers alienability; prevents tax evasion 5. Mostly abolished. Still good to know just in case old conveyances come into play. D. Rule Against Perpetuities 1. Generally i. no interest is good unless it must vest, if at all, not later than 21 years after one or more lives in being at the creation of the interest. ii. Thus if an interest is capable of vesting more than 21 years after life and being, it is void. iii. The rule aplies to both real and personal property, and to the legal and equitable interest in them. iv. It does not apply to any interest in the grantor (reversions, possibilities of inverter, and powers of termination) nor does it apply to vested interest (vested remainders or fee simple estate's) 2. beginning of perpetuities period i. for inter vivos conveyances a. when the conveyance is made (deed is delivered). ii. For wills a. when the testator dies iii. irrevocable trusts a. when created iv. revocable trusts a. when the trust becomes the revocable (settlers death unless it is modified to become irrevocable before that 3. Clarifications i. It doesnt require that to be valid a future interst must vest within a life in being plus 21 years. it requires the interest vest or fail within the perpetuities period. Thus, a contingent remainder can be valid even if it never vests, so long as whether it best to not will be known with analyzing being +21 years. ii. It also doesn't require better future interest become possesses a street with being +21 years. It is about investingnot possessingthat triggers the rule. If the interest must vest or fail within the perpetuities., The interest is valid even if it isn't certain that the session will occur within.

4.

5.

6. 7.

Interests in the same grant that do not violate the rule are valid. iv. To make an interest valid, it must have no possibility of remote vesting. Thus, the interest must vest or fail within the period. An interest that may vest within the period may also vest remotely, and that makes it violate the rule. Exceptions i. the gift to a charity that may be shifted to another charity outside the perpetuities. Is valid even though it violates the rule against perpetuities. ii. thus, in a grant to the lung Association as long as the property is used for charitable purposes; then to the save the whales foundation, the Wales interest is valid under the charity to charity exception even though it is capable of vesting remotely. The wait-and-see doctrine i. the doctrine determines the validity of contingent interests otherwise voided by the rule gives perpetuities, by waiting until the contingency actually occurs to see if the interest is valid. Some jurisdictions have adopted the wait-and-see doctrine as a means of reforming the road perpetuities. Limited to 90 years. ii. Its good cuse it accepts uncertaintiy What might happen test i. Common law: Applies immediately Types of Future interests it applies to i. it does apply to, among others, contingent remainders, executory interests, and powers of appointment interests that are not vested. ii. Options to purchase land that are not connected to leases for years and iii. powers of appointment iv. Class gifts

iii.

8. class gifts i. the rule requires that the precise property interest of every class member must be determined within the perpetuities period or they all fail. This is known as the all or nothing rule. ii. Thus, the class must close within the perpetuities period. (No new members can enter after that); and the conditions precedent for all class members must be determined (vesting or failing) within the perpetuities period.

9. Mechanics of the Rule i. Step 1: determine whether the future interest in question is even subject to the rule, which applies only to interests that are not vested at the time of the conveyance that creates themcontingent remainders, executory interests, and class gifts.

ii.

Step 2: determine if the interest might not vest within the perpetuity period of lives in being plus 21 years. The rule strikes down contingent interests that might vest too remotely. *Important: it is a rule of logical proof. You must prove that a contingent interest is certain to vest or terminate no later than 21 years after the death of some person alive at the creation of the interest. If not, its void.

iii.

iv. Validating life: a person who will enable you to prove that the contingent interest will vest of fail within the life, or at the death of that person, or with 21 years after that person death. a. can be anyone b. has to be in being at or before the time at which the interest in question was created c. Examples: preceding life tenant, taker or takers, anyone who can affect the identity of the takers, anyone else who can affect events relevant to the condition precedent d. Sometimes not a person who is mention in the instrument. The key is that to be a validating life, a person must be someone who can affect vesting or termination of the interest. e. more than one interest: If a transfer creates more than one interest subject to the rule, you must test the validity of each interest separately. One might be valid and the other not. 10. Options VI. class gifts A. a group of persons B. not defined in number when the gift is made C. with a common characteristic D. the members of which will be ascertained sometime in the future E. the share of each member being determined by the number of people in the group when the groups membership is ascertained F. examples: children, heirs, descendents, grandchildren, cousins, and the like. G. Rules of construction relating to class gifts 1. the same rules applied to testamentary and lifetime gifts. These are testamentary i. immediate gift to a classgift fixed in size (E. G., Black acre, to Fred's children.) a. If Fred as children when testator dies: they take, but after born children do not

b. if Fred is childless at testators death: class stays open until no new members can be addedI. E., Fred's death. ii. Immediate gift to a classgift per capita ($10,000 to each of Freds children.) a. If Fred has children when testator dies: they take, but after born children do not. b. If Fred is childless when testator dies: the gift fails. iii. Postpone gift to a classgive fixed in size (e.g. to Fred for his life, then to Fred's children, but if any of Freds children die before age 10, his share to the survivors.) a. class closes upon first distribution to the class of the rule of convenience VII. restraints on alienation: three types A. disabling restraint 1. makes any attempt to transfer invalid, so that the interest granted as inalienable 2. disabling restraints are always invaluable legal interests. (There sometimes though equitable interests, is an equitable interest in the spendthrift trust) B. promissory restraint excellent 1. makes alienation a breach of covenant, remedied by damages for an injunction. 2. Promissory restraints are valid on life estates, void on fee simple estate's C. forfeiture restraints 1. means that any attempted alienation results in forfeiting interest 2. forfeiture restraints are valid on life estates and future interests, and invalid unfeasible estates