Define: Future Interest

A future interest in property refers to a legal right or ownership interest that will be realized at a later date, typically after the current owner’s death or the expiration of a specific event or condition.

There are several types of future interests, including remainders, reversions, executory interests, contingent remainders, vested remainders subject to open, and vested remainders subject to divestment.

A remainder is a future interest that takes effect after the termination of a prior estate, such as a life estate. It allows a third party to inherit or possess the property once the prior interest ends.

A reversion is a future interest that occurs when the current owner grants a lesser estate to another party but retains the right to possess the property once the lesser estate ends.

An executory interest is a future interest that cuts short or divests the rights of a current owner and transfers them to a third party upon the occurrence of a specific event or condition.

A contingent remainder is a future interest that is dependent on the occurrence of a specific event or condition. If the event or condition does not happen, the interest may be lost.

A vested remainder subject to open is a future interest that is given to a group of individuals, but the specific shares are not determined until a later date. As more individuals become eligible, the shares “open up” or become defined.

A vested remainder subject to divestment is a future interest that is given to a specific individual, but it may be taken away or divested if a certain event or condition occurs.

Future interests can be created through various legal instruments, such as wills, trusts, deeds, or contracts. It is important to consult with an attorney to ensure the proper creation and documentation of future interests.

Yes, future interests can be sold or transferred to another party through legal means, such as a deed or assignment. However, it is crucial to comply with applicable laws and seek legal advice to ensure a valid and enforceable transfer.