What is a defeasible fee simple estate?

• A. A life estate
• B. A leasehold interest
• C. An estate held in trust
• D. A fee simple subject to a condition subsequent or other future interests that can cut short the estate

Answer: (D)

A defeasible fee simple estate is a form of ownership that is built as a fee simple but can be cut short if a specified event occurs or a condition is breached. It remains a potentially unlimited ownership, but its duration depends on what happens with the condition. The key idea is that the estate is defeasible—the holder can lose the property if the triggering condition happens or if a future interest is triggered. This category includes fee simple determinable, where the estate ends automatically when the condition occurs (with a future interest like a possibility of reverter retained by the grantor), and fee simple subject to a condition subsequent, where the grantor has the right to reclaim the property if the condition is breached, as well as situations where a third party holds an executory interest that can cut the estate short. In contrast, a life estate ends with the holder’s death, a leasehold is a tenant’s possession without ownership, and a trust estate is ownership held subject to a trust’s terms. So, a defeasible fee simple is best described as a fee simple subject to a condition or future interests that can shorten the estate.