In property law, a 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.
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.
Cutting Short a Prior Life Estate
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.
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.
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 (aka "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