Property · Future Interests
Clear answer to: When Can Future Interests in Property? with key cases, examples, and exam tips for law students.
Future interests in property can arise whenever grantors create interests that do not presently possess rights to possession, typically through conveyances like a remainder or a contingent interest after a prior estate, provided they comply with relevant legal rules.
Future interests in property come into existence when a property grantor conveys an interest that will not immediately vest or become possessory. The two major categories of future interests are remainders and executory interests, each having its own requirements for creation and vesting. Remainders are further categorized into vested and contingent remainders; vested remainders are certain to become possessory upon the natural termination of the preceding estate, while contingent remainders hinge on an uncertain event. In contrast, executory interests cut short a prior estate rather than follow it.
Legal concepts such as the Rule against Perpetuities also limit the validity of certain future interests. This doctrine dictates that certain future interests must vest within a life in being plus 21 years to avoid being struck down for being void. Furthermore, it is essential to recognize how interests can be created through specific language in deeds, wills, or trusts, detailing the intent of the grantor.
For example, if a property owner grants land to A for life, and then to B, this creates a vested remainder in B because B’s interest will surely vest upon A's death. Alternatively, if the grant says, “to A for life, then to B if he graduates from law school,” B has a contingent remainder since his interest is contingent upon the uncertain event of graduation.
Future interests also exhibit complexities involving lack of possession. A future interest holder does not have a current possessory right, creating implications for rights to income or use of the property during that future period. Legal practitioners and students need to assess the specific terms of the conveyance to determine the nature of these interests clearly.
Consider a scenario where a testator states in their will, 'I devise my property to my brother for life, and upon his death, to my niece if she is then 25 years old.' The brother has a life estate, while the niece has a contingent remainder dependent upon her reaching age 25 by the time the brother's life estate terminates.
Questions regarding future interests often appear on exams, testing students' understanding of the creation, classification, and consequences of remainders and executory interests, especially in the context of the Rule Against Perpetuities.