LAW 515-001 – Property I

Future Interest


A future interest is the right to possess a piece of property in the future.

Remainder

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.

Vested Interest

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.

Contingent Interest

A contingent remainder is one

  1. with a condition precedent before the remainder-holder can take possession or
  2. one that is given to an unascertained person.
Condition Precedent

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.

Executory Interest

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.

Executory interests can be shifting or springing.

Shifting

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.

Springing

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

Reversion is a future interest in a grantor to an inherently limited possessory estate.