A colleague recently asked me for my take on a title issue in a closing. In retrospect, it would have been a good law school exam question.

Mom in the 1940s signed a deed of property to Daughter. This deed had a twist: Mom both reserved a life estate to herself and granted a life estate to Daughter.

So, stopping here, question: what did Mom intend? Did she intend for herself and Daughter to share title and possession so long as they both lived, or did she intend to have title and possession during her life and then for it to go to Daughter upon her death? The deed was inartfully drafted, so we will never know. The facts that developed in this case rendered the question irrelevant for purposes of the pending closing. Both Mom and Daughter died several years ago, with Daughter the survivor of the two.

The deed proceeded to say that upon Daughter’s death the property would go to her children. If she had no children, the property was to go to named Grandchild 1 and Grandchild 2, apparently children of another child of Mom, both of whom were alive when Mom died. Grandchild 1 thereafter died, followed by Daughter with no children. Grandchild 2 now wants to convey the property. Can he do so as the sole grantor, or must he deal with an outstanding interest in the heirs of Grandchild 1?

The answer depends, I believe, on whether the interest of Grandchild 1 was “vested” prior to his death. If it was, then it descended to his heirs (or, if he a had a will that properly addressed the interest, to the individuals that he designated). If it was not (i.e., it was “contingent”), then the analysis continues with identifying the contingency and determining whether and when it occurred.

Determining whether a future interest, including a remainder (which is the interest conveyed to Grandchild 1 and Grandchild 2) is vested is complex. Simplistically, a remainder is vested if, when it is created (here, when Mom granted the deed), the remainderman (i.e., the grantee of the remainder) was then in existence, identifiable and entitled to possession simply upon the expiration of the prior life estate of Daughter (although we must deal with the issue of Daughter’s possible children). Mom specifically named the remainder, they were alive when she delivered the deed, and they were entitled to the property subject only to expiration of the preceding life interests of Mom and Daughter (again, subject to the question of Daughter’s possible children).

The remainders therefore vested upon the granting of the deed from Mom, but what about possible children of Daughter? There turned out to be none, but the birth of children was apparently a possibility when Mom delivered the deed. The vested remainders in Grandchild 1 and Grandchild 2 were therefore subject to divestment upon the occurrence of the condition subsequent if birth of children of Daughter. That condition never occurred, removing the possibility that the remainders could be divested.

Being vested, the interest of Grandchild 1 was not contingent upon his surviving Daughter. See Banister v. Banister, 232 Ga. 187, 205 S.E.2d 856. The deed in Banister granted to the grantor’s wife a life estate and stated that upon her death the title was to go to Buster Banister. Buster died before the life tenant. The issue before the court was whether the deed created a life estate with a contingent remainder (in which event Banister’s heirs would not inherit the remainder interest) or a life estate with a vested remainder (in which event they would notwithstanding Buster’s predeceasing the life tenant). The court held that the deed created a life estate in the wife with a vested remainder in Buster so that his hers were entitled to the remainder upon the death of the life tenant.

One might argue that the interest of Grandchild 1 was a contingent remainder, arguably contingent upon Daughter’s dying without children. Even if this is the correct analysis, the condition was removed upon the death of Daughter with no children.

Based on this, my colleague received deeds from both Grandchild 2 and the sole heir of Grandchild 1 and recorded affidavits of descent.

Thoughts?