Laws on Property Ownership
In our capitalist economic system, ownership of property is often a source of prestige and power. Inevitably disputes arise as to ownership of property. To help resolve such disputes, the law recognizes five categories of property ownership. Within these categories are various types of property ownership.
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Present Possessory Real Property
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There are five types of property ownership recognized under this category of property law. These are called "fee simple absolutes" (FSA), "defeasible fees" (DF), "fee tail" (FT), "life estate" (LE) and tenancies. An FSA is property that can be owned indefinitely. DFs are property that can be terminated by the occurrence of an event that was prohibited by the prior owner of the property when he transferred the property to the current owner. An FT is property that can be owned only by lineal successors. An LE is one that lasts for the life of an individual. Once that person's life has ended, then the LE is terminated. Tenancies are interests in property that tenants obtain from their leases.
Future Interests in Real Property
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There are three types of property ownership recognized under this category of property law. These are called "reversions", "remainders" and "executor interests" (EI). A "reversion" is an interest in land that the grantor owns which will become possessory upon the occurrence or nonoccurrence of an event. A "remainder" is an interest in land that a third party owns which will become possessory upon the natural termination of the prior estate. An EI is an interest in land that a third party owns that will become possessory upon the occurrence or nonoccurrence of an event regardless of whether the prior estate has terminated naturally.
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Trust
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A trust creates two ownership interests. It creates a legal interest in the trustee(s) who has the right to manage, invest and improve the trust property for the benefit of the beneficiary(s). It also creates an equitable interest in the beneficiary(s) who has the right to use and enjoy the property subject to the terms of the trust.
Marital Property
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There are two types of marital property. These are called "community property" and common law marital property. Under community property all property obtained during the marriage --- except by gift, will, or inheritance --- was assumed to be marital property, which was owned by the spouses in equal shares unless "fairness" requires a different distribution. Under common law, all property owned by the spouses is considered marital property that is subject to a "fair and equitable" distribution by the courts upon divorce.
Separate Property
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All property obtained by a spouse before marriage, after permanent separation, by inheritance, by gift or by will was to be his or her separate property. At divorce that property cannot be reached by the other spouse.
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