future interest
In property law, future interest is the right to possess property in the future.
A future interest is in direct contrast with a present right to property, also referred to as a possessory estate . A future interest may be conditioned upon the occurrence of a certain condition or event, or it can also be unconditional.
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 short the prior estate.
Life Estate
A life estate is a future interest that will result in ownership of the property only after the present possessory estate has run its course.
When a life estate is assigned, there are certain interests that may force the life estate to end early, which will shorten the life estate.
Executory Interest
An executory interest is 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 .
Non-Executory Interest
Executory interests will pass the property to a third party, however, there are future interests that will return the property to the grantor upon the triggering of a certain condition. There are two kinds of these interests:
-
Right of Entry
(also known as "power of termination")
- If the condition is violated, the grantor has the voluntary right to reclaim the estate.
-
Possibility of Reverter
- If the condition is violated, the estate is automatically restored to the grantor.
Further Reading
For more on future interests, see this Washington and Lee Law Review article , this Seattle University Law Review article , and this Vanderbilt University Law School publication.
[Last reviewed in December of 2022 by the Wex Definitions Team ]
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