Hello. Welcome to the ownership of real property in present estates. Today we're going to start our study of property with the estate system. An estate in real property is the particular bundle of rights that an owner holds. While U.S. law usually allows limitless customization, estates are an exception. Real property typically only comes in certain configurations of rights. We are going to learn the names of each configuration, called an estate. And we're going to focus on those that are tested on the bar and really learn their key features.

By way of warning, this is the driest material in property. But we're going to start here because it's foundational material and we're going to see that a lot of bar questions are actually built on estates. It's also material that is very easy to test so you are sure to see a lot of it on the bar.

Present Estates - General Concept

We're starting with the simplest form of estate, which is a present estate. Present estates refer to property interests that are not dependent on anything else occurring to come into being.

For example, if you own a watch you have a present interest in that watch. On the other hand, if you expect to inherit your mom's watch, you do not have a present interest in her watch. And this is true even if you know that your mom has left her watch to you in her will. You merely expect it. And that's not a present interest. Present interests really refer to ownership that is happening right now. And this is the kind of property that you are likely to interact with in your day-to-day life.

Four Key Attributes of Present Estates

Before we get into specific interests, I want to introduce four key attributes that you need to pay attention to for each of the interests that we are going to cover under present estates. And we're going to cover these interests as well when we get to future estates. So you'll be working with them for a while.

Devisable

The first attribute is whether an interest is devisable, that is, can it pass by will. So if we go back to our watch example from a moment ago, if your mom has a watch and she puts it in her will, that will says that you are going to receive the watch upon her death, she is attempting to devise the watch to you. And upon her death you'll be her heir, and you are named in the will, so you will receive the watch. Personal property, like a watch, is devisable. Most of the interests that we are going to cover here are in fact devisable. They can pass by will.

Descendible

The second attribute to consider is whether an interest is descendible. An interest is descendible if it can pass by the statutes of intestacy prescribed by a particular state. To die intestate is to die without a will. This is actually what happens when most people pass away because very few people pass away with wills. And even when somebody has a will, that will might not capture all of their property, which means that even with careful planning some amount of property often passes through the laws of intestacy.

Interests that are descendible can pass through these laws to the heirs of the decedent. Interests that are not descendible will disappear or go back to the grantor upon the death of the owner.

Heirs

We've said the word heirs a couple of times and we're going to take a quick little diversion to talk about heirs.

Heirs is a term that we use in common parlance that means something slightly different in law. When you see the language “and his heirs” or “and her heirs,” do not be tricked into thinking that those heirs have any interest in property. Living people have no heirs. Living people only have prospective heirs.

Prospective heirs have no property interests, even if they are defined in a will of a living person. And this is because we do not know who somebody's heirs are going to be until the moment they die. And it's only at that moment of death that heirs become fixed. This is because, although we might expect children to outlive parents or grandchildren to outlive grandparents, we do not know for sure that this is going to occur.

And because of this, we cannot know who somebody's heirs are going to be until they actually die. What this means is that heirs is not a synonym for children or family. And in most states, next of kin and heir are synonymous. And so if you see “next of kin,” this is also one of these uncertain terms where you do not know who that is going to be until the moment of death.

For our purposes, and if it makes it easier to think about, heirs typically refers to spouses, blood relatives, and adopted children. Stepchildren are usually not heirs. In property, the term for biological children is issue, although you might sometimes see the word descendants in its place.

Exclusion of Certain Family Members

We're going to see lots of questions that focus on issue and on heirs that are going to specifically exclude stepchildren and other chosen family members.

This sometimes is shocking to modern law students, but the thing to remember is that these rules are centuries old and you are learning century-old common law. And these rules are, for the most part, the rules that are in place today unless and until a statute has come in to change them.

And so while you may think that there's no possible way stepchildren might be treated differently than blood children, or that issue, which is going to be just biological children and not adopted children will be treated differently from adopted children, in fact, there are slightly different property rules that are going to apply to these different family situations. And we are going to learn those distinctions here.

Escheatment

Finally, if a property owner dies with neither a will nor any heirs, the property escheats to a state. That word is escheat. What that means is that the property is going to become property of the state. This only happens when somebody dies without heirs and without a will. It is quite uncommon.

Alienable

We're going to come back to our attributes to pay attention to, and we're at number three. What we're going to talk about now is alienability. You want to pay attention to whether an interest is alienable. Alienable is a fancy way of saying sellable, or something that you can give away. It's something that you can cause to no longer be yours. And property is alienable when you can transfer it inter vivos.

Inter Vivos Transfer

Inter vivos is a fancy way of saying between living beings. For example, if I sell you my house, I have made an inter vivos transfer to you. If an interest is alienable, living people can sell it. Most of the property that you interact with on a daily basis is alienable. Indeed, there's a strong presumption in property against construing grants and restrictions in ways that make property less alienable.

Defeasiblity

This brings us to our fourth attribute to pay attention to, and that is whether an interest is defeasible. Defeasible means capable of being annulled or avoided. An example is going to help us here.

Example

If A grants Blackacre to B, as long as no alcohol is consumed on the premises, B's interest is defeasible. If anyone consumes alcohol on the premises, B is going to lose their interest. In this grant it's going to go back to A. So a grant can still be a present possessory grant and we're going to think of that grant as vested. So the person enjoying that grant is going to have all of the benefits and burdens of having property. Nevertheless, the grant might be defeasible if some condition is placed upon the grant that causes it to go away should that condition occur. We're going to talk about defeasible interests in more detail in later lessons.

Recap

To recap, there are four attributes that I want you to pay attention to as we talk about property interests. The first is whether an interest is devisable. That is whether it can pass by will. The second is whether an interest is descendible. That is whether the interest can pass by statutes of intestacy.

The third is whether the interest is alienable. That is whether it is transferable among living persons or transferable inter vivos. Finally, I want you to pay attention to whether an interest is defeasible, that is, capable of being annulled or avoided. We need to know each of those four attributes for every interest in property that we cover over the next several lessons.

First Present Estate - Fee Simple Absolute

We have come now to our first interest or our first estate. That is the fee simple absolute. This is the biggest, most complete interest. If you are familiar with the bundle of rights, or bundle of sticks metaphor for property, the fee simple absolute is the biggest bundle. It contains all of the sticks, or all of the rights. This interest is devisable, descendible, and alienable. It is also indefinite, meaning that it is not defeasible. So a fee simple absolute has no termination. It could last forever.

Creation of a Fee Simple Absolute

Now we're going to talk about how to create a fee simple absolute. The law in all 50 states presumes that a deed intends to transfer the largest interest that the grantor owns. That means that generic language, like a grant that just says “to A,” is going to transfer a fee simple absolute, assuming that the grantor owns a fee simple absolute. And in order to transfer something less than a few simple absolute, the grant is going to have to make it very clear that the grantor intends to grant less.

So, historically, a deed had to say “to A and his heirs” to pass a fee simple absolute. But that has been changed in all states. That language “and his heirs” is no longer needed. So the simplest language, as I mentioned, is just “to A.” If O grants Blackacre to A, O has given a fee simple absolute to A. And as soon as that grant is complete, A owns all of the sticks or all of the rights that come with Blackacre. So to recap, the fee simple absolute is the biggest, most complete property interest.

It's so simple that it's kind of boring. But questions on the bar exam often begin with the fee simple absolute because it's a clean place to begin building in complexity. Just remember that once a question adds complexity to a property interest it's probably not a fee simple absolute anymore.