A testator's will devised Blackacre 'to my daughter, for life, then to her children who survive her, and if she has no children surviving her, then to the American Red Cross.' At the time of the testator's death, the daughter had one child, who was 10 years old. What interest does the American Red Cross hold in Blackacre at the time of the testator's death?
- AA contingent remainder.
- BA shifting executory interest.
- CA vested remainder subject to open.
- DA reversion.
Show answer & explanationAnswer & explanation
Correct answer: B. A shifting executory interest.
The interest of the American Red Cross is a shifting executory interest because it follows a fee simple subject to executory limitation (the daughter's children's interest) and will divest a prior vested interest (the daughter's children, if they exist and survive her, or potentially the daughter's life estate if no children exist immediately). More precisely, the condition ('if she has no children surviving her') divests the potential remainder in the children, making it an executory interest that shifts the estate from one grantee (the children) to another (Red Cross) upon the non-fulfillment of a condition.
Why the other options are wrong
- A. A contingent remainder cannot follow another remainder that is contingent on the same event (the children surviving). The Red Cross's interest is structured to divest a prior interest, making it executory.
- C. Vested remainder subject to open applies to the daughter's children, not the Red Cross.
- D. A reversion is retained by the grantor/testator, not created in a third party.
Shifting Executory Interest
An executory interest that divests a prior estate in a transferee (someone other than the grantor).
- Divests an interest in another grantee, not the grantor.
- Takes effect upon the happening of a condition subsequent.
- Can follow a defeasible fee or a remainder.
Memory trick: Executory = EXtra grantee, EXactly divests