BUT, some states do NOT allow transferability of all 3 (CA inter vivos … does allow for all 3) ways around having to research state law re: inter vivos transferability… O could transfer to A, then transfer to B FSD/FSSCS PR/PT in will accomplishes same outcome as AND, O would inter vivos transfer… have more control b/c retained by O until death PR/PT O could transfer to B, then B could transfer to A, FSA FSD/FSSCS w/ B retaining accomplishes same outcome w/o O having to PR/PT transfer the O has less control (NO guarantee PR/PT itself… though, that B will transfer to A, B must be trustworthy) As opposed to jurisdictional split at there is NO modern law, inter vivos transferability at common law 2 reasons why… Avoid forfeiture (b/c the law abhors a forfeiture) Avoid restricting use/development/marketability of property (create a speculative market) 2 exceptions to rule re: transferability (which some states still common law follow, though NOT CA)… transferring to holder of (thereby Merger – FPI fee simple defeasible creating FSA) transferring w/ (i.e. O to Transfer incidental to reversion FPI reversion – A for life w/ retained in O O could transfer AND PR/PT PR/PT reversion to B, but NOT one w/o the other) as (remedy for violation of FPIs remedial devices restriction) Generally, 3 purposes that are served by to to to restriction compel, prevent, control Grantor has purpose(s)… drafts restriction to comply w/ said … purpose(s)… which includes remedial device for if/when restriction is violated … Basic remedy is forfeiture… Automatically w/ PR Optionally w/ PT Either/or w/ (though, unlike subject to EI PR/PT, RAP)
… BUT, some states do NOT allow transferability of all 3 inter vivos (CA does allow for all 3) ways around having to research state law re: inter vivos transferability… O could transfer FSD/FSSCS to A, then transfer PR/PT to B in will accomplishes same outcome as inter vivos transfer… AND, O would have more control b/c PR/PT retained by O until death O could transfer FSA to B, then B could transfer FSD/FSSCS to A, w/ B retaining PR/PT accomplishes same outcome w/o O having to transfer the PR/PT itself… though, O has less control (NO guarantee that B will transfer to A, B must be trustworthy) As opposed to jurisdictional split at modern law, there is NO inter vivos transferability at common law 2 reasons why… Avoid forfeiture (b/c the law abhors a forfeiture) Avoid restricting use/development/marketability of property (create a speculative market) 2 exceptions to common law rule re: transferability (which some states still follow, though NOT CA)… Merger – transferring FPI to holder of fee simple defeasible (thereby creating FSA) Transfer incidental to reversion – transferring FPI w/ reversion (i.e. O to A for life w/ PR/PT retained in O O could transfer PR/PT AND reversion to B, but NOT one w/o the other) FPIs as remedial devices (remedy for violation of restriction) Generally, 3 purposes that are served by restriction to compel, to prevent, to control Grantor has purpose(s)… … drafts restriction to comply w/ said purpose(s)… … which includes remedial device for if/when restriction is violated Basic remedy is forfeiture… Automatically w/ PR Optionally w/ PT Either/or w/ EI (though, unlike PR/PT, subject to RAP)
Property-2_Coskran-Spring-2009.docx