Contingent Interest

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An interest that the holder may enjoy only upon the occurrence of a condition precedent.

For example, say Bill writes in his will that he leaves his "interest in The Centerville Café to Sarah, if she is still living in Centerville." This conveyance promises Sarah ownership over The Centerville Café only if she is living in Centerville at the time which Bill dies. If she is not, she stands to lose her interest. Therefore, Sarah holds a contingent interest in The Centerville Café.

A future interest is contingent when the person to whom it is conveyed is unknown or the event upon which it is limited is uncertain.

If the condition upon which a future interest depends is precedent, the interest is contingent; if the condition is subsequent, the interest is vested, subject to defeasance.

Related terms:

condition subsequent

contingency

contingent ownership

estate planning

estates and trusts

property & real estate law

possessory estate

real property

trusts, inheritances, & estates

[Last updated in June of 2020 by the Wex Definitions Team]