Also known as: power of termination · termination power · termination powers · right of termination · termination rights
Written by attorneys · grounded in primary & secondary sources — see below
A future interest retained by a grantor who conveys an estate subject to a condition subsequent. The holder may terminate the grantee's estate upon breach of the condition. The interest does not merge with any reversionary interest also held by the grantor.
Portia Price conveyed land to her husband in fee tail. After his death the surviving spouse asserted dower. The court held the dower subordinate to an outstanding power of termination that restricted the deceased spouse's estate.
Patricia Patel conveyed land to her spouse in fee tail preserved for a single lifetime only. Upon the spouse's death the surviving spouse claimed curtesy. The claim yielded to an executory interest and power of termination that had restricted the deceased spouse's estate.
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Phuong Pham conveyed land in fee simple conditional. After the grantee's death the surviving spouse sought curtesy. The interest remained subordinate to an undestroyed power of termination that had restricted the deceased spouse's estate.
Pierce Patterson created a trust that gave the beneficiary a power of termination upon stated conditions. The beneficiary exercised the power after breach. The court recognized the termination as effective because the power had been expressly retained.
Peter Park commissioned a sculpture under an agreement that reserved a power of termination if the work failed specified conditions. Upon breach the commissioner exercised the power. The court treated the retained power as a distinct future interest unaffected by any reversion.
A power of termination follows conveyance of an estate subject to a condition subsequent and requires affirmative exercise by the holder to end the estate. A possibility of reverter follows a fee simple determinable and arises automatically upon the limiting event.
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No. Courts have consistently held that powers of termination and possibilities of reverter are exempt from the rule against perpetuities because of their historical recognition before the rule developed.
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The estate does not terminate automatically. The holder must exercise the power of termination. Only then does the estate end and possession return to the holder.
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No. The owner of a power of termination has no power to transfer the interest by conveyance during life. The power remains personal to the holder until death.
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They pass by will or intestacy in the same manner as other future interests, subject to any statutory recording requirements that may limit their duration.
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…trust, and that the trust therein passed a present interest to the beneficiary, subject to being defeated by the settlor’s power of termination or power to alter and amend the trust. The foregoing Illinois cases, while distinguishable from the instant case, do exhibit a tendency upon the part of this court to permit a settlor to…