When Lillian died, she left a handwritten (holographic) will that stated “If I die all possions (sic) go to my husband Paul…. and when he dies everything goes to Rhobbin….. Written by Lillian….. (wife).”
That, my friends, created a determinable fee simple for husband Paul with an executory interest to Rhobbin, according to an opinion issued by the Houston Court of Appeals (1st). Let’s unpack that because it seems to be a lot of random words strung together.
Fee Simple Absolute: The Most Expansive Type of Ownership
Starting at the most expansive type of ownership: a “fee simple absolute” is an estate over which the owner can use and dispose of the property without any limitation, forever. When the owner dies, any property remaining passes by the owner’s will or to his heirs.
Lillian’s will left all of her possessions to her husband Paul. If her will had stopped there, then Paul would have received ownership of the property in fee simple absolute.
But Lillian’s will added a limitation: Paul’s death. This is called an “executory limitation,” which is an event that, if it occurs, automatically divests one of devised property.
Pulling it all together, a fee simple estate subject to an executory limitation is called a “determinable fee simple estate.” This is a fee simple interest in every respect, with one important exception: it passes to another if the contingency happens.
Now let’s drag in one more party: Rhobbin. The recipient of the property when the contingency happens has an “executory interest.” Rhobbin had an executory interest in the property because it was going to pass to her when Paul died.
The importance of this becomes apparent upon the next event, which was that Paul died less than 2 weeks after Lillian. Paul did not leave a will.
If Paul had received a fee simple absolute interest in Lillian’s property when she died, then the property would have passed to Paul’s heirs when he died as part of his probate estate.
But, because Paul received only limited ownership of the property, upon his death the property passed to Rhobbin, in accordance with Lillian’s will.
Fee Simple Absolute vs. Life Estate
Now let’s look at another case that resulted in a completely different analysis. The wife left a will that stated “It is my Will and desire that when I am dead my property, my home and all the furnishings………shall become the property of my Husband…It is also my will and desire that all above mentioned property, at my Husband’s death, shall go to the ….Orphans Home…”
The Waco Court of Appeals issued an opinion that the language in the will created a life estate in husband, with the remainderman the Orphans Home. That is quite different from a determinable fee simple with an executory interest.
A life estate is created by words showing intent to give the right to possess, use, and enjoy the property during life. The life estate ends when the holder dies. At the holder’s death, the “remainderman” receives ownership of the property. No particular language is required to make a life estate.
Using The Right Terminology In Your Will
Why the different interpretation of such similar language in the two wills? It’s simple – Courts of Appeals do not always agree.
That is not especially helpful or reassuring. The type of property interest carries huge implications on the obligations of the holder for upkeep, use, taxes, insurance, and the right to divest ownership during the holder’s lifetime.
The lesson? Use the appropriate terminology in your will, so an appellate court won’t have to decipher your meaning.
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Attorney Virginia Hammerle has practiced litigation and estate planning for 40 years. She is founder and managing attorney for Hammerle Finley Law Firm.