A right to possession of land that is a future right as opposed to a present right. It may be conditioned upon the occurrence of a certain condition or event. It can also be unconditional. Contrast with a possessory estate.
Future interests are created at the formation of a defeasible estate. The future interest will either take effect following the natural termination of the prior estate, or will cut shore the prior estate.
Following the Natural Termination of a Life Estate:
These are passive future interests that will take possession of the land only after another estate (present possessory estate) has run its course.
Reversion: When the land will return to the original grantor. (From O to A for life, then back to O. A will have use of the land for the lifetime of A, but on A's death, the land returns to O).
Remainder: When the land will pass to anyone other then the original grantor. (From O to A for life, then to B. A will have use of the land for the lifetime of A, but on A's death, the land will go to B). Remainders come in two varieties: Contingent or Vested.
Contingent Remainder: There is some uncertainty, either the identity of the person to take possession is uncertain, or the fact that that person actually will take possession is uncertain. (From O to A for life, then to A's heirs. We don't know who A's heirs will be until A dies. Or, from O to A for life, then to B if B survives A. Again, can't tell right now if whether or not B will take the property).
Vested Remainder: A remainder is vested if it is given to an ascertained person, and it is not subject to a condition precedent. Of course there are three kinds of Vested Remainders:
- Indefeasibly Vested: Here, the remainder can not be taken away (To A for life, then to B and B's heirs).
- Vested, Subject to Open: Also known as Vested, subject to partial divestment: Here at least one member of a class is known, but others could be added to that class. (To A's children and their heirs, A has one child, B. We already know that B will take a partial share, but if A has other children, B would share with those children).
- Vested, Subject to Divestment: Here, at least one person is known, but something could come in an divest (or take away) their taking of the property. (To A for life, then to B and her heirs, but if B does not survive A, then to C and his heirs). Note, here is where things get tricky.
Note: The only difference between a vested remainder subject to open and a contingent remainder is in the phrasing of the words. Compare:
- Vested remainder subject to divestment: To A for life, then to B and her heirs, but if B does not survive A, then to C and his heirs.
- Contingent remainder: To A for life, then to B and her heirs if B survives A; and if B does not survive A, to C and his heirs.
Cutting Short a Prior Life Estate:
These are active future interests that will take step in to possession of the land, cutting short another's life estate.
Executory interest: A future interest in property that will be triggered on the happening of a stated event, and will pass the property to a third party. For example, to A and his heirs, but if A dies without marrying, to B and his heirs. B has an executory interest.
An executory interest can be springing (meaning the previous interest was help by the grantor) or shifting (meaning the previous interest was held by someone other then the grantor).
Executory interests will pass the property to a third party, but there are future interest that will return the property to the grantor. There are two kinds:
Right of Entry
Right of Entry: Also known as power of termination. This gives the Grantor the right to reclaim the estate if the condition is violated. From O to A, on the condition that A does not smoke. If A smokes, O has the right to come in and reclaim the land. Note that O must actually take action to get the land back; while A's mere act of smoking gives O the right to do so, it does not automatically return the land. Note the conditional language (on the condition that), and that this follows a fee simple subject to a condition subsequent.
Possibility of Reverter
Possibility of Reverter: Here the land will automatically terminate if the triggering event happens. From O to A so long as A does not smoke. Here, if A smokes, the land will automatically revert back to O. Note the durational language (so long as) and that this follows a fee simple determinable.