The Fee Simple Absolute and Calculus of Estates

There are 11 estates in land recognized in Michigan, which are:

1) The Fee Simple Absolute
2) The Life Estate
3) The Reversion
4) The Fee Simple Determinable
5) The Possibility of Reverter
6) The Fee Simple Upon Condition Subsequent
7) The Right of Re-entry
8) The Fee Simple Subject to Executory Limitation
9) The Executory Interest
10) The Vested Remainder, and
11) The Contingent Remainder

I will be covering all the above estates in due course, but this article will focus on the first of these; the Fee Simple Absolute.

First off, what is an estate? The word estate stems from the word status. When someone claims to hold an estate in land, we must determine the status of that claim. Example: Let's say Bill Smith claims an interest in Blackacre. We perform the title search and find that Bill Smith only holds a life estate interest. The result is that Bill Smith's estate is that of a life estate in Blackacre. Trust me, this will become clear to you after I compose and you read all the estate articles. This is tough stuff, but I am confident that I can help you grasp the function of these estates.

IMPORTANT: All of our property laws grew out a rich history. Some of the property rules, particularly regarding estates in land, developed over centuries and were the product of accident and confusion. Some of the aspects I will be discussing may not seem logical to the reader. This is totally normal thinking, because accident and confusion can produce some absurd results. Just keep in mind that the rules in property law, whether logical or not, are the current rules. So if something seems unclear or illogical, just accept the rule 'as stated' and move on. Knowing that the rule was formed by accident or mistake will actually help you accept it.

These writings will incorporate the elements of future interest law. I will let the reader know when I am discussing any of the future interests. In my experience, it is impossible to accurately discuss the estates in land without discussing the components of future interest law. They go hand in hand.

Another question. Why should the reader care about understanding estates? Let me use a car engine to explain: Visualize the engine and all its components. Let's say that Dave Phillips decides he wants to become an auto mechanic. He applies for a job and is hired on the spot. He opens up the hood of a 2003 Mercury Sable and all he recognizes is the 'dip stick'. He has absolutely no knowledge of the additional components of the engine. So you see, Dave the dip stick cannot properly analyze the problem with the engine, because he doesn't understand how the engine functions as a whole. Analyzing estates in land is exactly the same as my example. The reader may understand what a fee simple is, but when the chain of title begins to disclose other estates, the reader may be left in the same shoes as Dave the dip stick.

The Fee Simple Absolute. The most valued form of land ownership is the fee simple absolute. Let me attempt to define the fee simple absolute. The fee is synonymous with holding or ownership. Simple refers to an estate that is inheritable. Absolute discloses that there are no apparent impediments to the title, such as competing estates or conditions on ownership. Let me illustrate this with a basic example: Let's say Mr. X, a single man, conveys his property to Dave Phillips. The deed contains no conditions and there are no apparent competing estates. Dave Phillips would own a fee simple absolute.

Why is the fee simple absolute preferred? The fee simple absolute is indeed simple. The property owned by Dave Phillips is inheritable. It could theoretically remain in his family tree forever. Also, if Dave Phillips decides to sell his property, he can do so freely. There are no additional estates to be concerned with. Free transferability and inheritance are the fundamental reasons why a fee simple absolute is so appealing to its owner.

Critical to your education on estates is an understanding of the so called Calculus of Estates. Don't be intimidated by the name. The calculus of estates is a simple formula. When this formula is satisfied, a complete and accurate state of title will be found. State of title is an accurate and complete disclosure of the true owner(s) of the property.

That's great Dave, but what is the Calculus of Estates? Think of the calculus of estates as a line segment with a clear beginning and a clear end. This entire line segment represents a fee simple absolute, as discussed earlier. This fee simple absolute line segment is often broken into separate pieces. When the line segment is broken, the fee simple absolute is destroyed, resulting in the creation of new estates. Each separate piece of that line segment will represent a particular estate. To satisfy the calculus of estates, all the separate pieces, when added together, must add up to a fee simple absolute. Remember, the fee simple absolute represents the entire line segment. I use the calculus on every chain of title I examine. By applying the calculus I am sure that I have an accurate and complete state of title.

This article may seem a bit confusing to the reader. I will ask you to give it some time. It is incredibly hard to precisely convey knowledge of these estates in a writing. As mentioned, when you have read all the estate compilations, I believe these earlier writings will begin to make more sense. Also, as you gain experience in reading a chain of title, or a series of deed conveyances, the estates will become less confusing and less intimidating.

Please click on next week for my article on the Life Estate and the Reversion.

dave