Define: Future Property

Future property refers to property interests that will come into possession or enjoyment of an individual or entity at a later date, usually upon the occurrence of a specified event or condition. In legal terms, future property interests are often categorised into two main types: future interests in real property and future interests in personal property. Future interests in real property include various forms of ownership rights, such as remainders, reversions, and executory interests, which arise upon the expiration of a preceding estate or upon the occurrence of a specific event. Future interests in personal property may include contingent or vested interests in assets such as trusts, inheritances, or bequests that will be received by an individual or entity at a future time, typically upon the death of the property owner or the fulfilment of certain conditions specified in a legal document. Understanding future property interests is essential in estate planning, property transactions, and other legal matters involving the transfer or disposition of assets over time.

Property that a settlor expects to acquire but does not yet own. Any attempt to create a trust of future property will, in theory, fail. This is because a trust can never be constituted where the settlor has no title to transfer (i.e. to the trustee).

However, an existing equitable interest, so long as it is a vested interest, can be the subject matter of a trust even if its owner is entitled to no present benefit. For example, an individual with an interest in remainder in some land parcel may create a trust of that interest, even though he presently receives no benefit. It is, in fact, precisely this scenario that should have unfolded in Re Ralli’s Will Trust (1964). Here the settlor failed to convey her life interest into the trust as covenanted, most likely because no one had realised that such an interest was capable of being conveyed.

Although one can’t create a trust of future property, one can enter into a covenant to constitute a trust with this subject matter once it becomes available. A covenant of this sort may even be enforceable by the intended beneficiaries in certain circumstances (see, e.g., the constitution of trusts).

For related discussions see the constitution of trusts, Re Ellenborough (1903), Re Ralli’s Will Trust (1964).

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March 2024.