Legal Definitions - executory limitation

An executory limitation is a condition or provision in a legal document, such as a will, deed, or trust, that specifies a future event which, when it occurs, will automatically transfer ownership or a specific interest in property from one person or entity to another. This transfer "cuts short" or terminates an existing interest in the property, rather than waiting for that interest to naturally expire.

Essentially, it's a built-in trigger that, upon the happening of a defined event, causes property rights to shift automatically to a new owner or beneficiary.

• Example 1: Family Farm Inheritance

  A will states, "I leave my family farm to my son, Michael, but if Michael ever attempts to sell the farm to anyone outside our immediate family, then ownership of the farm shall automatically transfer to my daughter, Emily."

  How it illustrates the term: Michael's ownership of the farm is an interest that is subject to an executory limitation. If he attempts to sell the farm to a non-family member (the specified event), his ownership is immediately and automatically terminated, and the farm's title shifts to Emily, cutting short Michael's interest.

• Example 2: Land for Public Use

  A city receives a large parcel of land from a developer through a deed that states the land is granted "to the City of Springfield for as long as it is used exclusively as a public park. However, if the City ever converts any portion of the land for commercial development, then the ownership shall automatically revert to the local Historical Preservation Society."

  How it illustrates the term: The city's ownership of the land is subject to the condition of its use as a public park. If the city violates this condition by initiating commercial development (the specified event), the executory limitation causes the property's title to automatically transfer from the city to the Historical Preservation Society, thereby cutting short the city's interest.

• Example 3: Educational Trust Fund

  A trust fund is established to provide annual tuition payments for a grandchild, Sophia, "until she completes her undergraduate degree. However, if Sophia fails to maintain a minimum GPA of 2.5 for two consecutive semesters, then all future tuition payments from this trust shall automatically be redirected to her younger brother, Daniel."

  How it illustrates the term: Sophia's right to receive tuition payments is an interest that is subject to an executory limitation. If she fails to maintain the specified GPA (the defined event), her right to the payments is automatically terminated, and the benefit shifts to Daniel, cutting short Sophia's entitlement.