What Is Fee Tail?
What Is Fee Tail?
Fee tail or entail is a type of trust established by deed or settlement that restricts the sale or inheritance of an estate in real property and prevents the property from being sold, devised by will, or otherwise alienated by the tenant-in-possession.
Instead, it causes it to pass automatically by operation of law to an heir determined by the settlement deed.
Fee tail is derived from Medieval Latin feodum talliatum, which means “cut(-short) fee,” as opposed to “fee simple,” which has no such restriction and grants the possessor an absolute title (subject to the allodial title of the monarch) to the property, which he can bequeath or otherwise dispose of as he wishes.
Many other European countries and places have equivalent legal principles that exist or used to exist.
Fee tail in real Estate
Under the Estate system, there’s was a fee interest known as the “fee tail” that was a fee interest in the sense that it might endure eternally, but it was a lesser interest than a fee simple.
The fee tail was a type of interest that permitted a person to have an interest in land in perpetuity, but only for as long as his or her lineal successors owned it.
For example, Cal, a coal mine owner, wishes to give a coal mine to Jack Dawson. He is concerned, though, that Jack will sell it to Cal’s competitor.
Such he can grant Jack a “fee tail” interest in the mine so that if it is ever sold to someone who is not one of Jack’s lineal descendants, the mine will automatically revert to Cal (or his descendants).
The fee tail is created by utilizing the term “To Recipient and the heirs of his body.”
Remember that “To Recipient and his heirs” (without the term “of his body”) or “To Recipient” would result in a fee simple absolute.
Remember that with a fee simple absolute, the holder has completed and absolute discretion to give or sell the property to whoever he or she choose.
It should be emphasized that the charge tail is, for the most part, obsolete. Not only is it never employed currently, but most states will even refuse to implement a fee tail due to the widespread belief that restrictions on the marketability of property are undesirable.
As a result, in most countries today, the phrase “To Recipient and the heirs of his body” results in a fee simple absolute.
Fee Tail Purpose
The fee tail allowed a patriarch to pass on his bloodline, family name, honor, and armorials to a succession of powerful and affluent male offspring.
By retaining his estate in the hands of one heir only, in an ideally indefinite and pre-ordained chain of succession, his own wealth, power, and family honor would not be dissipated amongst several male lines.
Thus became the case in Napoleonic France by the operation of the Napoleonic Code, which gave each child the legal right to inherit an equal share of the patrimony, where a formerly great landowning family could be reduced in a few generations to a series.
As a result, it approaches the true corporation, which is a legal body or person that does not die and can hold money permanently.
Indeed, as a type of trust, while individual trustees may die, replacements are selected, and the trust itself continues in perpetuity, ideally indefinitely.
In England, fairly seamless successions were achieved from patriarch to patriarch, which was often aided by baptizing the eldest son and heir with his father’s Christian name for several generations, as in the FitzWarin line, who were all named Fulk.
Such indefinite inalienable land-holdings were quickly seen as limiting the optimum productive ability of land, which was frequently converted to deer-parks or pleasure grounds by the wealthy tenant-in-possession.
This damaging to the nation as a whole, and thus laws against perpetuities were enacted, which limited entails to a maximum number of lives.
Illegitimate children were likewise barred from inheriting as a result of an entail.
It complicated many propertied families, particularly from the late 17th to the early 19th centuries, leaving many individuals wealthy in land but heavily in debt.
This was often due to annuities chargeable on the estate payable to the patriarch’s widow and younger children, where the patriarch was swayed by sentiment not to establish a strict concentration of all his wealth in his heir leaving his other beloved relatives destitute.
In such circumstances, the settlor’s generosity frequently rendered the entailed estate an unprofitable venture, especially when the estate’s fluctuating agricultural income had to provide for fixed sum pensions.
Such impoverished tenants-in-possession were unable to sell any part of their land for cash or even offer the property as security for a loan, to pay such annuities, unless sanctioned by a private Act of Parliament allowing such sale, which was a costly and time-consuming mechanism that was frequently used.
The beneficial owner (or tenant-in-possession) of the property had only a life interest in it, albeit an absolute right to the revenue it generated, with the remainder transferring intact to the next successor or heir in law; any putative bequest of the land by the tenant-in-possession was ineffective.
Fee tail investment banking
Here, a Fee Tail is a provision in an engagement letter that governs the termination of an investment banker’s involvement in a selling transaction.
Final Purchase Agreement a Definitive Purchase Agreement (DPA) is a legal contract that details the terms and circumstances of a merger, acquisition, divestment, joint venture, or other kind of strategic alliance between two companies.
It is a legally binding agreement.
The investment banker’s services Banking on Investment Position Description This Investment Banking Job Description describes the primary abilities, education, and work experience required to become an IB analyst or associate managing the transaction, and the fee tail clause provides direction on how the banker will be compensated.
Fee tail period
The tail period is the time period in which an investment banker working on a company’s transaction is entitled to remuneration after the deal closes, even if his services are terminated.
The tail period is specified in the banker’s engagement letter under the termination of services clause.
Fee tail vs fee simple
A fee tail creates a class of beneficiaries with limited rights while holding onto the real property; in fee simple, the holder can control or sell the property without consent.
A fee tail is an interest (or right) created upon the establishment of a trust that provides for future events, or one that determines possession and enjoyment without specifying when the future possession will be enjoyed.
A fee simple is usually created by an instrument in writing, which may be oral or written and which ordinarily must be recorded to become effective against third parties.
It is therefore a term that pertains to the form of a grant as distinguished from the interest or ownership retained by the grantor.
Fee tail is sometimes used to describe an estate (whether an estate by descent or by succession) that creates an interest in real property for which there are no beneficiaries other than natural individuals, but where all of the individual’s descendants have an equal right to the income and property for some period of time.
A fee simple usually descends to the heir and even collaterals, whereas a fee tail only descends to lineal descendants and was originally intended to keep land in the family.
An estate for a term of life, on the other hand, is not an inheritance interest and cannot last forever.
Examples from history
The Marquess of Hertford
The major estates of the wealthy art collector Richard Seymour-Conway, 4th Marquess of Hertford, may represent an English example of a fee tail (d. 1870). His only child was his illegitimate son, Sir Richard Wallace, 1st Baronet.
He left as much of his estate as he could to him.
The principal land holdings and Ragley Hall were inherited by his distant cousin, Francis Seymour, 5th Marquess of Hertford, who was descended from a younger son of the 1st Marquess who died in 1794.
The majority of the 4th Marquess’s art collection, which he or his father had amassed, was given to Wallace and is now part of the Wallace Collection. However, other works were covered by the fee tail and transferred to the 5th Marquess.
Earl of Pembroke
Another example is George Herbert, 11th Earl of Pembroke, who died in 1827. He had a falling out with his eldest son, who became the 12th Earl, and gave his unencumbered inheritance to Sidney Herbert, 1st Baron Herbert of Lea, his son through a second marriage.
What is a Fee Tail?
In English common law, a fee tail or entail is a type of trust established by deed or settlement that restricts the sale or inheritance of a real estate and prevents the property from being sold, devised by will, or otherwise alienated by the tenant-in-possession, and instead causes it to pass automatically.
What is the purpose of the fee tail clause?
The fee tail clause serves two important functions: it outlines the investment bank’s obligation to pay expenses and provide liquidity for an employee or vendor that may still be working on the deal when it completes, and it specifies how much time the employee has to seek new employment or pursue other business opportunities, once they leave.
What is the difference between fee tail and fee simple?
A fee simple interest that can be terminated at the discretion of a future interest holder in the event or non-occurrence of an event or condition. Fee tail: A land interest that can be inherited and transferred exclusively to the original grantee’s lineal successors.
What follows a fee tail?
An estate in land that is subject to inheritance restrictions. When a fee tail is created, the original owner retains a reversion. As a result, if a fee tail tenant dies without heirs, the land reverts to the original grantor who established the fee tail estate.
What is a fee tail in law?
In feudal English law, an entail, sometimes known as a fee tail, is an interest in land that is bound up inalienably in the grantee and thereafter forever to his immediate successors.
The grantee’s land reverted to the grantor if he died without direct offspring, which was a key condition of entail.
Is a fee tail a freehold estate?
A fee tail is a freehold estate in property law that allows family lands to be passed down over generations by limiting succession to the grantor’s primary lineal descendants.
Is a fee tail estate inheritable?
The term “fee” denotes that the estate is inheritable, and “simple” denotes that it is unqualified in any way. A fee simple estate is produced when land is granted to a tenant and her or his heirs.
This creates an estate that will last as long as the tenant and any of her or his heirs live.
Is a fee tail transferable?
A fee tail is passed down from generation to generation to the heirs of the initial owner’s body. Because no one is an heir of the living, the offspring of the owner of a fee tail is only heirs apparent. As a result, such children have no transferable interest during their lives.
Is a fee simple estate perpetual?
The highest possible interest in real estate. The estate is unconditional, unrestricted, and permanent. Each state has its own legislative and common law framework for estates in fee simple.
Which type of estate is the most desirable?
As a result of these factors, the fee simple absolute estate is the most attractive estate in residential real estate. It is also the most widely used.
The estate reverts to the prior donor. Fee simple defeasible is classified into two types: determinable and condition subsequent.
What is the difference between life estate and fee simple?
The fee simple absolute is inheritable, but not the life estate.
A fee simple absolute is the most comprehensive interest in real property that an individual can own because it is totally limited to the owner and his heirs, assigns in perpetuity, and is not subject to any limitations or conditions.
What states allow fee tail?
Only Delaware, Maine, Massachusetts, and Rhode Island recognize fee tails. A fee tail would not be an appropriate conveyance of property unless you possess property in one of the four states.
How do you break an entail?
An entail could be severed through an agreement between a present tenant and the next male heir, who would then expect to do the same for his heirs.
Violet, the Dowager Countess of Grantham, wants to “smash” the entail and joins forces with her daughter-in-law to campaign for her son to explore legal tactics.
Are entails legal?
Entailment, or entailment, is a constraint that limits the inheritance of property to a specific sequence of successors. It is often generated by grant language in a deed, such as “to A and the heirs of his body,” which limits heirs to the landowner’s offspring.