Legal Definitions - future interest

A future interest in property law refers to a legal right to own or possess property at some point in the future, rather than immediately. Unlike someone who currently holds the property (a "present interest"), the holder of a future interest must wait for a specific event to occur or a certain period to pass before they can take possession. This event might be the death of a current owner, the fulfillment of a specific condition, or the passage of time. Future interests are established when property is initially transferred, creating a clear plan for who will own it next and under what circumstances.

Here are some examples illustrating future interests:

• Estate Planning Through a Will: Imagine an elderly couple, Mr. and Mrs. Chen, who write a will stating that their family home will go to their daughter, Lisa, after both of them have passed away. While Mr. and Mrs. Chen are alive, they hold the present interest and possess the home. Lisa, however, holds a future interest. She has a legally recognized right to the home, but her possession is delayed until the future event of both parents' deaths occurs. She cannot live in or sell the home now, but her claim to it is legally established for the future.

• Conditional Land Donation: A wealthy benefactor donates a large parcel of land to a local university for the sole purpose of building and maintaining a research library. The deed specifies that if the land ever ceases to be used for educational purposes, ownership will automatically revert to the benefactor's descendants. The university currently holds the present interest, using the land for its intended purpose. However, the benefactor's descendants hold a future interest. Their right to possess the land is conditional: it will only activate in the future if the university violates the condition (stops using it for education). This illustrates a future interest that can "cut short" the current owner's rights if a specific event happens.

• Trust for a Minor: A grandparent sets up a trust fund that includes a commercial rental property. The trust dictates that the rental income will support their son for his lifetime, but upon the son's death, the property itself will be transferred to their grandson, Alex, when Alex turns 25. The son has a present interest in receiving the income from the property. Alex, the grandson, holds a future interest in the property itself. He does not have any rights to the property now, but his right to possess it is legally established to take effect in the future, specifically after his father's death and once he reaches a certain age.