1.2 Future Interests

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1.2 Future Interests

Key Takeaways Explain This Topic AI

Future interests are present property rights to future possession or enjoyment

The Rule in Shelley's Case merges life estate + remainder to heirs into fee simple (rule of law)

Doctrine of Worthier Title presumes grantor retains reversion rather than creating remainder in own heirs

At common law, contingent remainders were destroyed if unvested when prior estate ended (abolished in most states)

• Remainders follow natural termination of prior estates; executory interests cut short prior estates
• Last updated: June 2026

A future interest is a present, legally protected right to future possession or enjoyment of property. Future interests can be held by the grantor (reversionary interests) or by third parties (remainders and executory interests).

• Reversionary Interests (Held by Grantor)
• 1. Reversion

A reversion is the future interest that remains in the grantor when the grantor transfers less than a complete fee simple. Reversions are:

• Transferable : Can be sold, devised, or passed by intestacy
• Not subject to RAP : The Rule Against Perpetuities does not apply

Example : O conveys "to A for life." O has transferred only a life estate, so O retains a reversion. When A dies, the property returns to O (or O's heirs).

2. Possibility of Reverter

Follows a fee simple determinable . The grantor's interest becomes possessory automatically when the condition is violated.

Example : O conveys "to School District so long as used for educational purposes." O retains a possibility of reverter.

3. Power of Termination (Right of Re-Entry)

Follows a fee simple subject to condition subsequent . The grantor must take affirmative action to reclaim the property when the condition is breached.

Example : O conveys "to Hospital, but if not used for medical purposes, O may re-enter." O retains a power of termination.

• Third-Party Future Interests
• Remainders

A remainder is a future interest in a third party that is capable of becoming possessory upon the natural termination of the prior estate. Remainders never cut short the preceding estate.

Vested Remainders

A remainder is vested if:

• Created in an ascertained person , AND
• Not subject to a condition precedent (other than natural termination of prior estate)

Types of Vested Remainders:

• Type Description Example
• Indefeasibly Vested Certain to become possessory "to A for life, then to B" (B is living)
• Vested Subject to Open Class that may add members "to A for life, then to B's children" (B has one child)

Vested Subject to Divestment May be cut off by condition "to A for life, then to B, but if B dies before A, to C"

Contingent Remainders

A remainder is contingent if:

• Created in an unascertained person , OR
• Subject to a condition precedent beyond natural termination

Example of unascertained taker : "to A for life, then to A's widow." A is alive, so A's widow cannot yet be identified.

Example of condition precedent : "to A for life, then to B if B reaches age 21." B is 15 at time of grant.

Executory Interests

An executory interest is a future interest in a third party that:

• Cuts short the prior estate before its natural termination (shifting), OR
• Follows a gap in possession after the grantor's estate (springing)
• Shifting Executory Interest

Cuts off another grantee's interest.

Example : "to A, but if A sells alcohol on the premises, then to B." B has a shifting executory interest that will divest A's fee simple.

Springing Executory Interest

Divests the grantor's interest or springs out of the grantor.

Example : "to A when A graduates from law school." A has a springing executory interest. O retains possession until A graduates.

Key Distinctions

• Feature Remainder Executory Interest
• Timing Natural termination Cuts short prior estate
• Prior Estate Life estate or term of years Fee simple or gap
• Effect Waits for prior estate to end Divests prior estate
• Historic Doctrines Affecting Future Interests
• Destructibility of Contingent Remainders

At common law , a contingent remainder in real property could be destroyed by any of three methods:

1. Failure to Vest at Natural Termination

If the contingent remainder fails to vest by the natural termination of the prior vested estate, it is destroyed.

Example : O conveys "to A for life, then to B if B reaches age 25." A dies when B is 20.

• B's contingent remainder has not vested (B hasn't reached 25)
• At common law: B's remainder is destroyed
• O's reversion becomes possessory
• 2. Merger Doctrine

If the life estate and the next vested interest (reversion) come together in the same person, they merge into a fee simple, destroying any intervening contingent remainder.

Requirements for merger :

• One party obtains all outstanding present AND vested future interests
• The interests are not separated by a vested estate

Merger can occur by :

• Surrender : Present estate holder surrenders to future interest holder
• Release : Future interest holder releases to present estate holder
• Conveyance : Both holders convey to a third party
• Example 1 : O conveys "to A for life, remainder to B if B earns a law degree."
• A has life estate; B has contingent remainder; O retains reversion
• One year later, O conveys reversion to A (B still hasn't earned degree)
• A now has life estate + reversion
• At common law: A's interests merge → A gets fee simple absolute
• B's contingent remainder is destroyed
• Example 2 : O conveys "to A for life, remainder to B's first-born daughter."
• A has life estate; B's unborn daughter has contingent remainder; O retains reversion
• O devises reversion to A; B still has no daughter
• At O's death: A receives reversion + already has life estate
• At common law: Merger → A gets fee simple absolute
• B's daughter's contingent remainder is destroyed
• 3. Surrender of Present Estate

If the holder of the present possessory estate surrenders their interest before the contingent remainder vests, the remainder is destroyed.

Example : T devises "to A for life, remainder to B's widower." T's residuary estate goes to A.

• At T's death: A has life estate + reversion (from residuary)
• B is alive and married, so B's widower is unascertained (contingent)
• Critical : A's interests were created at the same time by the same instrument
• No merger yet (same-time, same-instrument exception)
• One year later: A conveys life estate + reversion to C
• C now has both interests from different times
• At common law: C's interests merge → fee simple absolute
• B's widower's contingent remainder is destroyed
• Same-Instrument Exception

CRITICAL RULE : Merger does NOT occur when both interests are created:

• At the same time , AND
• By the same instrument

This prevents inadvertent destruction at the moment of creation.

Modern Rule: Abolition

Most jurisdictions have abolished the destructibility doctrine. Under modern law:

• Situation Common Law Modern Rule
• Contingent remainder not vested at termination Destroyed Converts to executory interest
• Grantor's reversion Becomes possessory Becomes possessory until condition satisfied
• Contingent interest Lost forever Preserved - holder can still take if condition later met
• Distinguishing Contingent Remainders from Executory Interests

Why it matters : In jurisdictions retaining the destructibility rule, contingent remainders ARE destructible but executory interests are NOT .

Test : If a future interest MAY in some case fall in automatically at natural termination of the previous estate, an irrebuttable presumption treats it as a contingent remainder (destructible).

Grant Classification Why

"to A for life, then to B if B reaches 21" Contingent Remainder B MIGHT turn 21 before A dies (natural termination possible)

"to A for so long as no liquor, then to B" Executory Interest B can ONLY take if A's estate is cut short (never natural termination)

Rule in Shelley's Case

When the same instrument creates:

• A life estate in A, AND
• A remainder in A's heirs

The remainder in A's heirs becomes a remainder in A . If A holds both the life estate and remainder in fee simple, they merge into a fee simple absolute.

• Example : O conveys "to A for life, then to the heirs of A."
• Under Shelley's Case: A gets a fee simple absolute (life estate + remainder merge)
• A's heirs take nothing by virtue of this grant

Key Points :

• This is a rule of law , not construction (intent of grantor is irrelevant)
• Applies only to remainders , not executory interests
• Most states have abolished this rule, but it appears on the bar exam
• Doctrine of Worthier Title

When a grantor creates:

• A life estate or other present interest, AND
• A remainder in the grantor's own heirs

There is a rebuttable presumption that the grantor intended to retain a reversion rather than create a remainder in heirs.

• Example : O conveys "to A for life, then to the heirs of O."
• Under Worthier Title: O retains a reversion (remainder in O's heirs fails)
• O can dispose of the reversion during lifetime

Key Points :

• This is a rule of construction (can be rebutted by grantor's intent)
• Applies only to inter vivos transfers (not wills)
• The grantor's heirs cannot block sale of property
• Alternative Contingent Remainders

When a grant creates two contingent remainders that are mutually exclusive (only one can vest), they are alternative contingent remainders .

• Example : O conveys "to A for life, then to B if B marries C, otherwise to D."
• A has life estate
• B has contingent remainder (condition: B marries C)
• D has alternative contingent remainder (condition: B does NOT marry C)
• O has reversion (in case both B and D die before A)
• Distinguish from Vested Remainder Subject to Divestment

Language B's Interest D's Interest

"to A for life, then to B if B marries C, otherwise to D " Contingent remainder Alternative contingent remainder

"to A for life, then to B; but if B marries C, to D " Vested remainder subject to divestment Shifting executory interest

• Key : "if...otherwise" = alternative contingent remainders; "then to B; but if" = vested subject to divestment
• Executory Interests vs. Contingent Remainders

Critical Distinction : Executory interests are NOT destructible (unlike common law contingent remainders).

• Feature Contingent Remainder Executory Interest
• Follows Life estate or term of years Fee simple or gap in possession
• Can be destroyed? Yes (common law) NO - never destructible
• What happens if condition not met at termination? Common law: destroyed Continues until condition met or fails
• Class Gifts and the Rule of Convenience
• Rule of Convenience

The Rule of Convenience determines when a class closes (no new members can join). A class gift closes when any member is entitled to demand distribution .

Classes subject to the rule : "children," "grandchildren," "brothers," "sisters," "nephews," "nieces," "cousins," "issue," "descendants," or "family" of a designated person.

• Scenario 1: Immediate Gift to a Class (No Condition Precedent)
• Grant : "To the children of A"

• Situation at Conveyance When Class Closes Who Takes
• A is dead Class already closed All of A's children (no afterborns possible)
• A is alive with children Closes immediately Children born at conveyance; afterborns excluded
• A is alive with no children Class stays open All children, whenever born, until class naturally closes
• Example : T devises "to the children of A."
• If A is dead at T's death → class closed; A's existing children share
• If A is alive with one child at T's death → class closes; only that child takes; afterborns excluded
• If A is alive with no children at T's death → class stays open; all future children can take
• Scenario 2: Postponed Gift to a Class (No Condition Precedent)
• Grant : "To A for life, then to the children of B"

The class closes at the end of the postponement (A's death), not at conveyance.

• Situation at A's Death When Class Closes Who Takes
• B is dead Already closed All of B's children
• B is alive with children Closes at A's death Children conceived by A's death; afterborns excluded
• B is alive with no children Class stays open All children, whenever born
• Example : T devises "to A for life, remainder to the children of B."
• B dies after T but before A → class closed at B's death; B's existing children share
• B is alive at A's death with children → class closes at A's death; afterborns excluded
• B is alive at A's death with no children → class stays open for all future children
• Scenario 3: Immediate Gift with Condition Precedent
• Grant : "To B's children who reach 21"

The class closes when the first member satisfies the condition .

• Situation at Conveyance When Class Closes Who Takes
• B is dead Already closed All of B's children who reach 21
• B is alive ; one child is 21+ Closes immediately All then-born children who reach 21; afterborns excluded

B is alive ; all children under 21 Stays open until first child reaches 21 Children born by that time who later reach 21; afterborns excluded

B is alive ; no children Stays open All children who reach 21; class closes when first reaches 21

Example : O conveys "to B's children who reach 21." B is alive with children ages 15 and 12.

• Class remains open until the 15-year-old turns 21
• At that point, class closes
• Children born before that date can take (if they later reach 21)
• Children born after that date are excluded
• Scenario 4: Gift with Combined Postponement AND Condition Precedent
• Grant : "To A for life, then to B's children who reach 21"

The class closes when BOTH conditions are satisfied:

• The postponement ends (A dies), AND
• A class member has satisfied the condition precedent (reached 21)

• Situation When Class Closes Who Takes
• B is dead at conveyance Already closed All of B's children who reach 21
• B dies before A Already closed All of B's children who reach 21
• At A's death: B alive, one child is 21+ Closes at A's death Children born by A's death who reach 21

At A's death: B alive, no child is 21 yet Stays open until first reaches 21 Children conceived by that time who reach 21

Example : O conveys "to A for life, then to B's children who reach 21." At A's death, B has children ages 19 and 17.

• No child has reached 21 yet (second postponement not satisfied)
• Class stays open
• When the 19-year-old turns 21, class closes
• All children conceived by that date can take if they reach 21
• Afterborns excluded

Summary Chart: When Does the Class Close?

• Gift Type When Class Closes
• Immediate, no condition At conveyance (if class has members)
• Postponed, no condition At end of postponement
• Immediate + condition When first member satisfies condition
• Postponed + condition When BOTH postponement ends AND first satisfies condition (whichever is LATER)
• No members qualify Class stays open until one qualifies or class terminates
• Transferability

• Interest Inter Vivos Transfer Devise Descent
• Reversion Yes Yes Yes
• Possibility of Reverter Modern: Yes Modern: Yes Yes
• Power of Termination Majority: No Majority: Yes Yes
• Vested Remainder Yes Yes Yes
• Contingent Remainder Modern: Yes Modern: Yes Modern: Yes
• Executory Interest Yes Yes Yes

Loading diagram... Future Interests Overview