Part 1 ESTATES CLASSIFIED AS TO DURATION Section Estates classified Estates tail abolished; future estates limited thereon

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1 Article 6 CLASSIFICATION, CREATION, DEFINITION OF, AND RULES GOVERNING ESTATES IN PROPERTY Part 1 ESTATES CLASSIFIED AS TO DURATION Section Estates classified Estates tail abolished; future estates limited thereon When estate for life of third person is real property; when personal property Part 2 ESTATES CLASSIFIED AS TO NUMBER OF PERSONS Section Estates in severalty, joint tenancy, tenancy by the entirety and in common When estate is in common, in joint tenancy or by the entirety Part 3 ESTATES CLASSIFIED AS TO TIME OF ENJOYMENT AND CREATION Section Estates in possession and future estates Kinds of future estates Concerning the creation of certain future estates When future estates are created Part 4 ESTATES DEFINED Section Definition of an estate in possession Definition of a future estate Definition of a remainder Definition of a reversion Definition of a possibility of reverter Definition of a right of reacquisition Definition of a future estate indefeasibly vested Definition of a future estate vested subject to open Definition of a future estate vested subject to complete defeasance Definition of a future estate subject to a condition precedent Part 5 RULES GOVERNING FUTURE ESTATES Section Characteristics of future estates Power of appointment not to prevent vesting Future estates in the alternative Implication of cross remainders between tenants in common Future estate valid though contingency improbable Meaning of heirs, distributees and issue in certain remainders Posthumous children Heirs or distributees of life tenant take as purchasers Heirs or distributees of creator take as purchasers When future estates are defeated Non-destructibility of remainders subject to a condition precedent Future rents and profits subject to rules governing future estates Part 6 DISPOSITION OF COMMUNITY PROPERTY RIGHTS AT DEATH Section Application Rebuttable presumptions Disposition upon death Perfection of title 94 Estates_15-May.indd 94

2 6-2.2 Article Purchaser for value or lender Effect and construction of part Short title Part 1 Estates Classified As To Duration Estates classified (a) Estates in property as to duration are classified as follows: (1) Fee simple absolute. (2) Fee on condition. (3) Fee on limitation. (4) Estates for life. (5) Estates for years. (6) Estates from period to period. (7) Estates at will. (8) Estates by sufferance Estates tail abolished; future estates limited thereon Estates tail have been abolished, and every estate which would be a fee tail, according to the law of this state as it existed before the twelfth day of July, seventeen hundred eighty-two, shall be a fee simple; and if no valid future estate is limited thereon, a fee simple absolute. Where a future estate in fee is limited on any estate which would be a fee tail, according to the law of this state as it existed previous to such date, such future estate is valid and vests in possession on the death of the first taker without issue living at the time of his death When estate for life of third person is real property; when personal property A disposition of real property for the life of a third person, whether limited to heirs or otherwise, is real property only during the life of the grantee or devisee; after his death it is personal property. Part 2 Estates classified as to number of persons Estates in severalty, joint tenancy, tenancy by the entirety and in common Estates as to the number of persons owning an interest therein are classified as follows: (1) In severalty. (2) Joint tenancy. (3) Tenancy in common. (4) Only as to real property and, on and after January first, nineteen hundred ninety-six, as to the shares of stock of a cooperative apartment corporation allocated to an apartment or unit together with the appurtenant proprietary lease, tenancy by the entirety When estate is in common, in joint tenancy or by the entirety (a) A disposition of property to two or more persons creates in them a tenancy in common, unless expressly declared to be a joint tenancy. Estates_15-May.indd 95

3 96 Estates, Powers and Trusts LAW (b) A disposition of real property to a husband and wife creates in them a tenancy by the entirety, unless expressly declared to be a joint tenancy or a tenancy in common. (c) A disposition on or after January first, nineteen hundred ninety-six of the shares of stock of a cooperative apartment corporation allocated to an apartment or unit together with the appurtenant proprietary lease to a husband and wife creates in them a tenancy by the entirety, unless expressly declared to be a joint tenancy or a tenancy in the common. (d) A disposition of real property, or a disposition on or after January first, nineteen hundred ninety-six of the shares of stock of a cooperative apartment corporation allocated to an apartment or unit together with the appurtenant proprietary lease, to persons who are not legally married to one another but who are described in the disposition as husband and wife creates in them a joint tenancy, unless expressly declared to be a tenancy in common. (e) A disposition of property to two or more persons as executors, trustees or guardians creates in them a joint tenancy. (f) Property passing in intestacy to two or more persons is taken by them as tenants in common. Part 3 Estates Classified AS TO time OF ENJOYMENT AND CREATION Estates in possession and future estates Estates in property, as to the time of their enjoyment, are classified as estates in possession and future estates Kinds of future estates (a) Future estates are divided into: (1) Estates left in the creator, consisting of: (A) Reversions. (B) Possibilities of reverter. (C) Rights of reacquisition. (2) Estates in favor of a person other than the creator, namely remainders, that are: (A) Indefeasibly vested. (B) Vested subject to open. (C) Vested subject to complete defeasance. (D) Subject to a condition precedent Concerning the creation of certain future estates (a) Subject to the provisions of article 9: (1) An estate may be created to commence at a future time. (2) An estate for life may be created in a term of years and a future estate limited thereon. (3) A future estate may be limited after a term of years, provided that, if such future estate is subject to a condition precedent, the condition must occur within the period prescribed by article 9. (4) A fee or a lesser estate may be limited on a fee, subject to a condition precedent which must occur within the period prescribed by article When future estates are created A future estate is created when the disposition creating it becomes legally effective. Estates_15-May.indd 96

4 Article 6 97 part 4 estates defined Definition of an estate in possession An estate in possession is an estate which entitles the owner to the immediate possession of property Definition of a future estate A future estate is an estate limited to commence in possession at a future time, either without the intervention of a precedent estate or on the determination, by lapse of time or otherwise, of a precedent estate created at the same time Definition of a remainder A remainder is a future estate, as defined in 6-4.2, created in favor of a person other than the creator Definition of a reversion A reversion is the future estate, other than a possibility of reverter and a right of reacquisition, left in the creator or in his successors in interest upon the simultaneous creation of one or more lesser estates than the creator originally owned Definition of a possibility of reverter A possibility of reverter is the future estate left in the creator or in his successors in interest upon the simultaneous creation of an estate that will terminate automatically within a period of time defined by the occurrence of a specified event Definition of a right of reacquisition A right of reacquisition is the future estate left in the creator or in his successors in interest upon the simultaneous creation of an estate on a condition subsequent Definition of a future estate indefeasibly vested A future estate indefeasibly vested is an estate created in favor of one or more ascertained persons in being which is certain when created to become an estate in possession whenever and however the preceding estates end and which can in no way be defeated or abridged Definition of a future estate vested subject to open A future estate vested subject to open is an estate created in favor of a class of persons, one or more of whom are ascertained and in being, which is certain when created to become an estate in possession whenever and however the preceding estates end, and is subject to diminution by reason of another person becoming entitled to share therein Definition of a future estate vested subject to complete defeasance A future estate vested subject to complete defeasance is an estate created in favor of one or more ascertained persons in being, which would become an estate in possession upon the expiration of the preceding estates, but may end or may be terminated as provided by the creator at, before or after the expiration of such preceding estates Definition of a future estate subject to a condition precedent A future estate subject to a condition precedent is an estate created in favor of one or more unborn or unascertained persons or in favor of one or more presently ascertainable persons upon the occurrence of an uncertain event. Estates_15-May.indd 97

5 98 Estates, Powers and Trusts LAW part 5 rules governing future estates Characteristics of future estates Future estates are descendible, devisable and alienable, in the same manner as estates in possession Power of appointment not to prevent vesting The existence of an unexecuted power of appointment does not prevent the vesting of a future estate, limited in default of the execution of the power Future estates in the alternative Two or more future estates may be created to take effect in the alternative, so that if the first in order fails to vest, the next in succession is substituted for it and takes effect accordingly Implication of cross remainders between tenants in common When a limitation, if contained in a will, would create a tenancy in common, with implied cross remainders, a like limitation, if contained in a deed, has the same effect Future estate valid though contingency improbable A future estate, otherwise valid, shall not be void on the ground of the improbability of the contingency on which it is limited to take effect Meaning of heirs, distributees and issue in certain remainders When a remainder is limited to take effect on the death of any person without heirs, heirs of the body, distributees or issue, the word heirs, heirs of the body, distributees or issue mean such persons living at the death of the person named as ancestor Posthumous children (a) Where a future estate is limited to children, distributees, heirs or issue, posthumous children are entitled to take in the same manner as if living at the death of their ancestors. (b) A future estate conditioned upon the death of a person without children, distributees, heirs or issue is defeated by the birth of a child conceived before but born alive after the death of such person Heirs or distributees of life tenant take as purchasers When a remainder is limited to the heirs, heirs of the body or distributees of a person to whom a life estate in the same property is given, the persons who, on the termination of the life estate, are the heirs, heirs of the body or distributees of the life tenant take as purchasers Heirs or distributees of creator take as purchasers Where a remainder is limited to the heirs or distributees of the creator of an estate in property, such heirs or distributees take as purchasers. Estates_15-May.indd 98 5/2/13 7:32:22 PM

6 6-6.3 Article When future estates are defeated A future estate cannot be defeated or barred by any disposition or other act of the owner of the precedent estate, nor by the destruction of such precedent estate by disseizen, forfeiture, surrender, merger or otherwise; but a future estate may be defeated in any manner which the creator has provided Non-destructibility of remainders subject to a condition precedent A remainder is not defeated by the determination of a precedent estate before the occurrence of the condition precedent on which the remainder was limited to take effect. If such condition precedent subsequently occurs, the remainder takes effect in the same manner and to the same extent as if the precedent estate had continued Future rents and profits subject to rules governing future estates A disposition of the rents, profits or other income from property accruing at any time subsequent to the execution of the instrument creating such disposition is subject to the rules governing future estates in property. part 6 disposition OF community property rights at death Application This part applies to the disposition at death by a married person of all or the proportionate part of any personal property wherever situated which was acquired as or became, and remained, community property under the laws of another jurisdiction, and any personal property wherever situated and real property situated in this state which was acquired with the rents, issues or income of, the proceeds from, or in exchange for, property acquired as or which became, and remained, community property under the laws of another jurisdiction, or property traceable to that community property Rebuttable presumptions In determining whether this part applies to specific property acquired during a marriage by a spouse of that marriage the following rebuttable presumptions apply: (a) Property acquired while domiciled in a jurisdiction under whose laws property could then be acquired as community property is presumed to have been acquired as or have become, and remained, property to which this part applies; and (b) Property acquired while domiciled in a jurisdiction under whose laws property could not then be acquired as community property, title to which was taken in a form which created rights of survivorship, is presumed not to be property to which this part applies Disposition upon death Upon the death of a married person, one-half of the property to which this part applies is the property of the surviving spouse and is not subject to testamentary disposition by the decedent nor to the laws of descent and distribution. One-half of that property is the property of the decedent and is subject to testamentary disposition by the decedent or the law of descent and distribution. With respect to property to which this part applies, the one-half of the property which is the property of the decedent is not subject to the surviving spouse s right to elect against the will. Estates_15-May.indd 99 5/2/13 7:32:22 PM

7 100 Estates, Powers and Trusts LAW Perfection of title (a) If the title to any property to which this part applies was held by the decedent at the time of death, title of the surviving spouse may be perfected by an order of the surrogate s court having jurisdiction over the decedent s estate or by execution of an instrument by the personal representative or the testamentary beneficiaries or distributees of the decedent with the approval of the court, upon due notice to all persons who would be required to be served with process in a proceeding under section twenty-two hundred ten of the surrogate s court procedure act. Neither the personal representative nor the court has a duty to discover or attempt to discover whether property held by the decedent is property to which this part applies, unless a written demand is made by the surviving spouse or the spouse s successor in interest. (b) If the title to any property to which this part applies is held by the surviving spouse at the time of the decedent s death, the personal representative or a testamentary beneficiary or distributee of the decedent may institute an action to perfect title to the property. The personal representative has no fiduciary duty to discover or attempt to discover whether any property held by the surviving spouse is property to which this part applies, unless a written demand is made by a testamentary beneficiary, distributee or creditor of the decedent Purchaser for value or lender (a) If a surviving spouse has apparent title to property to which this part applies, a purchaser for value or a lender taking a security interest in the property takes his interest in the property free of any rights of the personal representative or a testamentary beneficiary or distributee of the decedent. (b) If a personal representative or a testamentary beneficiary or distributee of the decedent has apparent title to property to which this part applies, a purchaser for value or a lender taking a security interest in the property takes his interest in the property free of any rights of the surviving spouse. (c) A purchaser for value or a lender need not inquire whether a vendor or borrower acted properly. (d) The proceeds of a sale or creation of a security interest shall be treated in the same manner as the property transferred to the purchaser for value or a lender Effect and construction of part This part does not effect rights of creditors nor prevent married persons from severing or altering their interests in property nor authorize testamentary dispositions of property otherwise limited or prohibited by law, and shall be so applied and construed as to effectuate its general purpose to make uniform the law with respect to the subject of this part among those states which enact similar legislation Short title This part may be cited as The New York uniform disposition of community property rights at death act. Estates_15-May.indd 100 5/2/13 7:32:22 PM