grantor has, unless there is language in the deed indicating an intent by the grantor to limit the estate. However, the Court then explained that, when interpreting a deed, it is necessary to distinguish between present and future interests. The distinction between present and future interests is important because, when it comes to future interests in property, “an instrument is not given effect as an assignment of an expectancy or future interest unless it clearly manifests the intention of the prospective heir to sell, assign or convey his expectancy or future interest.” 5 Present interests, on the other hand, do not require any special language in order to be transferred. The Court then considered whether the remainder interest owned by Loyd III was a present or future interest. The Court reasoned that “a present interest in property means an owner can currently exercise his ownership rights to possess and enjoy the property, while a future interest recognizes that ‘[t]he owner’s right to possession or enjoyment is postponed until sometime in the future[.]’” The Court then clarified that a ‘vested’ interest, though transferable, is still a future interest and is one “where the future event is certain to occur, such as the death of a testator.” Ultimately, the Court determined that because the life estate had not yet expired when Loyd III signed the warranty deed, his remainder interest was still a future ownership interest. Further, because the future interest depended on the death of the life estate owner, an event that was certain to occur eventually, the Court reasoned that Loyd III’s remainder interest was a vested future interest. It was not until the death of the life estate owner (in 2006, eight years after the warranty deed was executed), that Loyd’s remainder interest ripened into a present ownership. After determining that Loyd III’s remainder interest was a vested future interest at the time he executed the warranty deed, the Court then considered what is required to transfer a vested future interest. According to the Court, “[w]hen an instrument purports to transfer a vested remainder interest under these circumstances, it must contain clear and express language demonstrating the grantor’s intent to do so.” Thus, because the 1998 warranty deed was silent as to whether it conveyed the remainder interest, the Court determined that the deed only operated to transfer his present ownership at the time – a 1/8 interest, or 1/16 for each daughter. The Court emphasized that while it is possible for a remainderman to transfer his future interest, the deed must clearly indicate the grantor’s intent to do so. Additionally, the
Court noted that this interpretation is “supported by circumstances surrounding the instrument’s execution, which make clear Loyd III did not [intend] to convey to his daughters his remainder interest via the 1998 gift deed.” Ultimately, the Court determined that while Loyd III “possessed a right to transfer his future ownership interest if he so desired,” he did not actually do so. This case emphasizes the notion that parties should be clear and unambiguous when drafting mineral deeds. Often, Texas courts will default to language contained within the deed itself. Here, however, the Court made clear that sometimes what you don’t say is as important as what you do say. 5 Id. at *12, quoting Clark v. Gauntt, 161 S.W.2d 270, 273 (Tex. 1942). 6 Id. at *19. 7 Id.
8 Id. at *25. 9 Id. at *26. 10 Id. at *25. Contact:
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