A future interest is the right to possess a piece of property in the future.
Remainder is a future interest created when a grantor conveys an inherently limited possessory estate and, in the same conveyance, conveys the future interest to a second grantee.
Remainders can be vested or contingent.
A vested remainder is certain to become possessory to an ascertained person according to the words creating the remainder by merely waiting until the prior life estate ends.
A contingent remainder is one
- with a condition precedent before the remainder-holder can take possession or
- one that is given to an unascertained person.
A condition precedent means that something has to happen before the remainder-holder can take possession.
It's like being subject to a condition subsequent, but backwards. Something has to happen before the natural termination of the preceding estate.
e.g. O to A for life, then to B if B has reached 25 years old.
Contingent interests occur naturally at the end of the previous interest as long as the condition is met.
If a remainder first just says to someone (to B, but if B does not survive A...), it is a vested interest subject to divestment. If a remainder put the condition in the same clause (to B if B survives A), it is a contingent interest.
- If anything has to be done first, such as kids being born or people surviving, it is contingent, not vested.
Vested remainders are descendable. Contingent remainders are not.
An executory interest is an interest in a grantee following a determinable estate or an estate subject to an executory limitation.
An executory interest automatically takes effect upon the happening of the condition. Its distinguishing characteristic from a contingent interest is that it divests other interests early.
Executory interests can be shifting or springing.
A shifting executory interest divests an estate in another grantee.
e.g. A to B, but if C graduates, to C. C has a shifting executory interest.
A springing executory interest divests an estate in a grantor.
e.g. A to C, if C graduates. C has a springing executory interest.
Reversion is a future interest in a grantor to an inherently limited possessory estate.