An attorney, a sole practitioner, conveyed her historic building that housed her law practice “to my niece, but if she fails to pass the bar exam within a year of her law school graduation, to my nephew.” Which description accurately describes the property interests created?

• A. The niece has a fee simple subject to condition subsequent, the nephew has a right of re-entry, and the attorney has no interest.
• B. The niece has a fee simple subject to an executory interest, the nephew has an executory interest, and the attorney has no interest.
• C. The niece has a fee simple determinable, and the attorney and the nephew each have a possibility of reverter.
• D. The niece has a fee simple subject to condition subsequent, the attorney has a right of re-entry, and the nephew has a

Answer: (B)

The situation hinges on future interests created when a grantor uses a transfer to one person with a condition that automatically shifts the property to someone else if the condition happens. Here, the attorney conveys to the niece, but if the niece fails to pass the bar within a year, the property goes to the nephew. That means the niece holds a fee simple subject to an executory limitation: her ownership can be cut short by a future transfer to a third party. The nephew holds an executory interest that will vest automatically when the condition occurs. The attorney does not retain any interest because there’s no retained right of entry or reversion for the grantor.

So, the niece has a fee simple subject to an executory limitation, the nephew has an executory interest, and the attorney has no remaining interest. The language does not create a fee simple determinable (which would involve an automatic reversion back to the grantor) or a grantor’s right of entry; instead, it creates a shifting executory arrangement to a third party.