Estates In Property – Fee Simple

Fee simple is the type of ownership that embraces every interest in a property. In other words, when a person owns property in fee simple, there are no limitations on his or her right to possess, use, sell or pass the property on to his or her descendants through a will or a trust; the owner of a fee simple estate owns the whole bundle of rights.

Creation

Historically, in order to transfer fee simple title, a grantor’s deed had to contain magic words that indicated that the conveyance was being made to the grantee and his or her heirs. Under modern law, no magic words are required.

Fee Simple Determinable

A fee simple determinable is a fee simple that ends upon the occurrence of a pre-determined event. Such fees are fee simple because they have the potential to continue indefinitely. A fee simple determinable ends automatically, and the fee simple ownership reverts to the grantor. Typical language that creates a fee simple determinable includes phrases in the deed such as “to the grantee so long as” or “to the grantee until,” or a statement that the property reverts to the grantor on the happening of a certain event.

Fee Simple Subject To A Condition Subsequent

A fee simple subject to a condition subsequent is a fee simple that does not automatically end when a predetermined condition occurs but could terminate if the grantor chooses to use a power that has been reserved in the deed. This kind of fee is created when the deed uses words of condition, but the grantor must take steps to terminate the fee and trigger a reversion.

Fee Simple Subject To An Executory Limitation

A fee simple subject to an executory limitation creates a future interest in a third person. It is a fee simple that automatically terminates on the happening of a predetermined event, but the fee does not revert to the grantor. When the event occurs, the grantee is divested of ownership in favor of the third person.

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