← The hardest concepts in United States law
In one breath
A future interest is a right to property that may or will become possessory later, after a present interest ends. Each is classified by who holds it and what brings it into possession, and the classification, which turns on the exact words of the grant, decides who takes, whether the right can be sold or inherited, and whether it is valid.
The picture
The relay baton
In a relay race the first runner holds the baton for a stretch, and then it must pass to someone. The rules of the handover are everything. The baton may pass to a teammate waiting in the next lane, who takes it when the first runner stops (a remainder). It may go back to the starting team if nobody was named to take it (a reversion). Or a third runner may leap onto the track in mid-stride and take the baton before the first runner has finished, cutting that turn short (an executory interest).
The route of the baton is fixed by the words of the starting instruction. Is the waiting teammate certain to run, or does she run only if something else is true when the first runner stops, such as her still being in her lane? The first is a vested interest and the second a contingent one. While it stays uncertain, the baton may fall back to the starting team.
Where the picture stops working
The picture shows sequence but not time. A race is run once, while land can be held for a lifetime, and the classification is made when the grant is made, with later events tested against it. Rules limiting how long a future interest may stay uncertain (see the Rule Against Perpetuities) have no counterpart in a relay.
How it really works
- 1Identify the present interest: a fee simple, a life estate (ending at someone’s death), a term of years, or a fee simple that may end early on a stated event.
- 2Look at what the grantor kept. If less than everything was given away and nobody else is named for the rest, the grantor holds a reversion (after a life estate or a term of years), or a possibility of reverter or right of entry (after a fee simple that may end early).
- 3If a third person is named, ask whether the interest waits for the present interest to end in the ordinary way (a remainder) or cuts it short (an executory interest, called shifting if it takes from another transferee and springing if it takes from the grantor).
- 4For a remainder, ask whether the taker is identified and nothing but the end of the prior interest stands in the way. Then it is vested. If the taker is unborn or unascertained, or a further condition must be met, it is contingent.
- 5Test the result: who takes if the condition fails, and is the contingent interest valid under the Rule Against Perpetuities as your jurisdiction applies it?
Why people get it wrong
- Calling every interest that follows “then” a remainder. An interest that cuts off a fee simple early is an executory interest, not a remainder.
- Calling a remainder contingent just because the taker might die. Only a condition, such as a requirement that the taker survive the prior holder, makes it contingent; a certain taker without one holds a vested remainder.
- Forgetting the grantor’s own interest. Where a contingent remainder may fail, the grantor generally keeps a reversion in case it does.
- Ignoring the signal words. Phrases such as “so long as”, “until” and “but if” shape which kind of interest the grant creates.
- Treating the labels as trivia. They decide who owns what, which interests can be sold or inherited, and whether the Rule Against Perpetuities applies.
A worked example
The facts are invented
Olga owns a farm in fee simple and signs a deed: “to my brother Piotr for life, then to my niece Tamsin.” Piotr has a life estate. Tamsin is named, alive, and certain to take when Piotr dies, with no condition: she holds a vested remainder, and Olga has given everything away.
Change the deed to “to Piotr for life, then to Tamsin if she is then a practicing doctor.” Tamsin must be a doctor when Piotr dies, a condition beyond the end of his estate, so her remainder is contingent, and Olga keeps a reversion that takes the farm back if the condition fails. Change it again to “to Piotr, but if the farm ceases to be farmed, to Tamsin.” Piotr now holds a fee simple that can end early. Tamsin’s interest does not wait for a natural end but takes from Piotr on a stated event, which makes it a shifting executory interest.
Try it
O conveys land “to A for life, then to B if B survives A.” Which description is best?
Landmark authorities
Read the sources themselves; this list is a starting point.
- Restatement of Property, Part I, (1936)
- Restatement (Second) of Property: Donative Transfers, (1983)
Where to go next
More hard concepts in United States law
- The Rule Against Perpetuities (Property law)
- Easements and covenants running with the land (Property law)
- Hearsay and its exceptions (Evidence)
This page is an educational overview. It is not legal advice and not a substitute for the sources: the statute, the rule, the case itself. United States law is made in fifty states and in the federal system, and the rules differ between them. Each page states the usual formulation of the rule and names landmark decisions; your own state, circuit or course may use different wording. Check the primary sources before relying on any rule.