REE 3433 EXAM 2 UCF Questions And Correct Detailed Answers With Rationales Verified |Already Graded A+

Freehold Estates - correct answer Derived from the feudal system. The most prestigious of the estates. The term "freehold" derives from the fact that the estates were held by free men, not serfs. Leasehold Estates: - correct answer Non-freehold estates. Less prestigious. Originated as moneylender's devices. Now commonly referred to as simply "leases." Fee Simple Absolute - correct answer-The greatest estate possible. -Complete ownership. -An estate limited absolutely to its owners and their heirs that assigns forever without limitation of condition. -Words of conveyance: O, the owner of land, conveys property "to A and his heirs." Fee Simple Defeasible - correct answer1)Fee Simple Determinable 2)Fee Simple Subject to an executory Limitation 3)Fee Simple Subject to a Conditional Subsequent Fee Simple Determinable - correct answer A Defeasible Fee that ends automatically when land is used in a manner forbidden in the grant of ownership. Created by the transfer of a fee simple to endure until the occurrence of an event. Fee Simple Subject to an Executory Limitation - correct answer A Defeasible Fee that ends automatically when land is used in a manner forbidden in the grant of ownership , but vests in someone other than the grantor. Like Fee Simple Determinable in that it is Created by the transfer of a fee simple to endure until the occurrence of an event. Fee Simple Subject to a Condition Subsequent - correct answer A Defeasible Fee that entitles the grantor to end the interest by exercising the right of entry after the grantee breaches a condition under which the property had been granted. Like Fee Simple Determinable in that it is Created by the transfer of a fee simple to endure until the occurrence of an event . Distinguishable from Fee Simple Determinable in that reversion to grantor is not automatic: grantor must exercise right of entry. Fee Tail - correct answer An estate in fee that descends to the grantor's direct lineal heirs and through them to the direct lineal heirs of the net generation. Words of conveyance: "To A and the heirs of his body." Originated in 13th century : property owners wanted to guarantee that property would stay in the family, passing from generation to generation. Disadvantage in that posed a restriction on alienation, which meant the owner was essentially just a life tenant (a tenant only for life), who could not, therefore, use the land in the most productive manner. Creditors could also be frustrated in collecting on lawful claims. Almost all states have either abolished fee tails or provided easy means to defeat it. It can only be created in 4 states: Delaware; Maine; Massachusetts and Rhode Island. Life Estate - correct answer An estate in which duration is measured by the life of a person. Words of conveyance: "To A for life" It must end at someone's death and is, therefore, not inheritable. Concurrent Ownership - correct answer All property is either owned in "severalty" or in "concurrence." "Severalty" - correct answer actually means sole ownership (as in severed ownership). "Concurrent" - correct answer ownership is ownership by two or more persons. "Concurrent estate" - correct answer" is ownership or possession of property by two or more persons at the same time. Joint Tenancy - correct answer Ownership of real or personal property by two of more persons in which each owns an undivided interest in the whole and each has a right of survivorship. Created by a will or deed. Requires 4 unities: Possession: Ownership is undivided. Each owner has an undivided interest entitling them to an equal right to take possession of the entire real estate. Interest: There must be equal ownership. Must be equal percentage. Title: Ownership was acquired from the same source. Must come from same conveyance instrument. Time: Each joint tenant's ownership was acquired at the same time. Undivided Interest - correct answer Each owner has a right to possession of the entire property. No owner can exclude the other or claim any specific portion for himself. Right of Survivorship - correct answer Upon the death of a joint tenant, that tenant's interest is extinguished. For example: In a two-person joint tenancy, when one person dies, the other immediately become the sole owner. When two or more persons are joint tenants, the remaining joint tenants are automatically left as owners. "The last joint tenant standing." Think PITT: - correct answer1.Possession 2.Interest 3.Title 4.Time Termination of Joint Tenancy - correct answer A Joint Tenancy is terminated when one of the four unities is destroyed. Once terminated, a joint tenancy reverts to a tenancy in common. For example: If Brad and Angelina own a farm as joint tenants and Angelina sells her interest to Jennifer, Brad and Jennifer now own the farm as tenants in common. Tenancy by the Entirety - correct answer A tenancy created between a husband and wife under which they hold title to the whole property with the right of survivorship. "Joint Tenancy plus" Requires four unities (PITT), plus: Must be husband and wife; and Unity of person. Like Joint Tenancy, there is a right to survivorship. Tenancy in Common - correct answer A concurrent tenancy in which there is a unity of possession but unities of time, title, and interest are not required. Distinguishing factors: There is no right to survivorship. There can be unequal ownership (interest). Community Property - correct answer Property acquired during a marriage through the efforts of either the husband or wife or both, with each having an undivided one-half interest in the property. Marriage is treated as an equal partnership. All property acquired during the marriage by the efforts of either spouse is community property. Property owned by either spouse before the marriage or received by one spouse during the marriage by gift or devise is considered separate property. Partnerships - correct answer An association of two or more persons to carry on as co-owners of a business for profit. Governed, generally, by the Uniform Partnership Act (UPA). Agreement establishing need not be in writing, though a well-run/constructed partnership should have a written partnership agreement (Articles of Partnership). Partnership downsides - correct answer1) Unlimited liability 2)Illiquidity 3)Management Partnerships (Limited) - correct answer A type of partnership comprised of one or more general partners who manage the business and who are personally liable for partnership debts and one or more limited partners who contribute capital and share in profits but take no part in running the business and incur no liability with respect to partnership obligations beyond their contribution. Corporations - correct answer A type of business organization that is owned by shareholders but managed by a board of directors who elect executive officers. A separate legal entity that can sue or be sued in its own name, provided it has filed articles of incorporation with the state (provided it has registered with the state). Corporations Advantages - correct answer Limited Liability: A shareholder's liability is limited to the extent of his investment; he cannot, in most circumstances, be held personally liable. Corporations Disadvantages - correct answer Double Taxation Corporation is taxed on its income. Shareholder is taxed on income from dividends received from his shares (ordinary income). Corporations (S-Corps) - correct answer A closely held corporation with no more than 100 shareholders who elect to be taxed like partners. No more than 100 shareholders. Stock must be owned by US citizens and/or estates, certain trusts or certain exempt organizations. Must be a domestic (US) corporation. May only have one class of stock issued and outstanding.