Cartoon Picture of Farmer and Haystck
Old McDuncan had a farm with a nice farm house that he and his wife and daughter had lived in for many years. When it came time for McDuncan to retire from farming, he decided to turn the farm over to his daughter, Katie, who wanted to operate the farm as her career.
So, here is what Old McDuncan did:
On January 1, 2025, he conveyed the farm "to my wife Kelly for her life, and then to my daughter Katie in Fee Simple Absolute.”
McDuncan’s purposes were two: to make sure his wife would be able to enjoy her homestead for the duration of her life, and to provide his daughter with eventual ownership of the farm so she could continue the family farming heritage.
Notice that the January 1 deed creates two ownership interests right now in the present:
1. Kelly is the present owner of the life estate which entitles her to immediate possession and use of the property for the rest of her life on Earth;
2. Katie is the present owner of a future interest. As of January 1, 2025, Katie became the owner of a Remainder in Fee Simple Absolute—she presently owns a future right to possess and enjoy the farm in Fee Simple Absolute.
It might seem difficult to grasp this concept of presently owning a future right of possession, but you do it all the time. Suppose you buy a ticket today to see Taylor Swift in concert for this coming June in New York City. You are the present owner of a license to see Taylor Swift come June.
This is what we discussed in Gruen v. Gruen.
