Also known as: future interest · future interests · future estates
Written by attorneys — see sources below.
A nonpossessory interest in land or personal property that may become possessory upon the termination of a prior estate or the occurrence of a specified event. The interest arises when a grantor or testator divides ownership temporally by conveying or devising a present possessory estate while retaining or creating a right to future possession in another person or entity.
Francesca Fiore conveyed Blackacre to her son for life with the remainder to her daughter. The deed created a present life estate in the son and a future interest in the daughter that will become possessory upon the son's death. The future interest is valid because it was created under the rules governing estates in land.
Forrest Falconer transferred property to a trustee for the benefit of his niece during her lifetime while retaining a reversion in himself. The reversion is a future interest that will become possessory if the niece dies without surviving descendants. The arrangement is enforceable because the grantor validly created both the present equitable interest and the future interest.
In January 1899, James J. Hanigan conveyed a house and lot in New York City to a trustee. The trust instrument directed the trustee to pay the grantor from the rents and profits the yearly sum of $1,500, with discretion to pay more, and to pay some debts and two existing mortgages on the property. The trustee received powers to mortgage the premises to satisfy liens or carry out the deed's provisions and to sell the property. Upon the grantor's death, the trustee was to convey the premises, if unsold, to the grantor's heirs at law or to pay them the unexpended balance of any sale proceeds. The trustee could also reconvey the premises to the grantor at any time to end the trust. At the time of trial in this action, the grantor remained alive, with two daughters as his sole descendants. In June 1902, one daughter, Mrs. Hughes, executed a deed conveying to her husband all her interest in the real estate. The plaintiffs, who are judgment creditors, later recovered a judgment for more than $4,000 against Mr. and Mrs. Hughes. They brought this action to subject what they alleged to be an interest in the real property to the lien of their judgment. The Special Term ruled in favor of the plaintiffs on the existence of a reachable interest, but the Appellate Division reached a contrary conclusion, leading to this appeal.
View caseFaith Fitzgerald devised her farm to her husband for life with remainder to their children if they survived him. The children hold a future interest that will vest only if they outlive the life tenant. The court may order sale of the land when economic conditions render continued farming wasteful and the proceeds can be invested to protect both the life tenant and the future interest holders.
John Harrison Weedon was born in High Point, North Carolina. After living throughout the South and two prior marriages that produced daughters Florence Weedon Baker and Delette Weedon Jones, he purchased Oakland Farm, a 152.95-acre tract in Alcorn County, in 1905. In 1915, at age 55, Weedon married 17-year-old Anna Plaxico; the couple worked the farm together, and Anna's daily labor hoeing, picking cotton, and milking fifteen cows protected the property during the difficult years after World War I. Weedon executed his will in 1925, granting Anna a life estate in all his property with remainder to her children if any existed and otherwise to his grandchildren in equal shares, while expressly excluding his daughters because they had not cared for him in his later years. Weedon died in 1932. Anna remarried J.E. Myers in 1933, but that union produced no children that would terminate the grandchildren's contingent remainder. Anna continued operating Oakland Farm until 1955, after which the land was rented for $1,000 per year plus $300 annually from sign rental and $50 monthly in social security. No contact occurred between Anna and Weedon's children or grandchildren from 1932 until 1964. At the time of suit Anna was 73 years old and her income was insufficient for her comfortable maintenance given her age and infirmities. In 1964 the Mississippi State Highway Department acquired a right-of-way across the farm for the U.S. Highway 45 bypass, paying $20,000 of which Anna received $7,500 to construct a new home. A 1970 contract for the sale of soil from the property yielded an additional $1,000 to Anna. At trial the property's commercial value was $168,500 and was projected to reach $336,000 within four years because of the highway construction and the growth of Corinth. Anna filed suit in the Chancery Court of Alcorn County seeking a sale of the property less the house site, with the proceeds invested so that interest would provide her adequate income. The chancellor ordered the sale. The contingent remaindermen Henry Baker, Sarah Baker Lyman, and Louise Virginia Baker Heck took an interlocutory appeal to the Supreme Court of Mississippi to review the decree.
View caseFumiko Fujimoto's will attempted to create successive future interests that would vest more than twenty-one years after lives in being. The future interests violate the rule against perpetuities and are therefore void. The invalidity prevents the intended takers from ever acquiring possessory rights under the will.
Plaintiffs, who are some of the beneficiaries under the will of Eugene H. Emmick, deceased, brought this action for damages against defendant L. S. Hamm, an attorney at law who had been engaged by the testator to prepare the will. They have appealed from a judgment of dismissal entered after an order sustaining a general demurrer to the second amended complaint without leave to amend. The allegations of the first and second causes of action are summarized as follows. Defendant agreed with the testator, for a consideration, to prepare a will and codicils thereto for him by which plaintiffs were to be designated as beneficiaries of a trust provided for by paragraph Eighth of the will and were to receive 15 per cent of the residue as specified in that paragraph. Defendant prepared testamentary instruments containing phraseology that was invalid by virtue of section 715.2 and former sections 715.1 and 716 of the Civil Code. Paragraph Eighth of these instruments transmitted the residual estate in trust and provided that the trust shall cease and terminate at 12 o’clock noon on a day five years after the date upon which the order distributing the trust property to the trustee is made by the Court having jurisdiction over the probation of this will. After the death of the testator the instruments were admitted to probate. Subsequently defendant advised plaintiffs in writing that the residual trust provision was invalid and that plaintiffs would be deprived of the entire amount unless they made a settlement with the blood relatives of the testator under which plaintiffs would receive a lesser amount. As a result, plaintiffs were compelled to enter into a settlement under which they received a share of the estate amounting to $75,000 less than the sum which they would have received pursuant to testamentary instruments drafted in accordance with the directions of the testator. The third cause of action alleges that after admission of the will and codicils to probate, Harold Houghton Emmick, Walton Russell Emmick, Delta Inez Spelman, and Retha Newell instituted a will contest. The executors, defendant, and the contestants reached a settlement agreement under which $10,000 would be paid to the contestants from the assets of the estate in return for releases. Defendant caused to be executed releases which did not preclude the contestants from a subsequent attack upon the validity of the testamentary instruments. As a consequence, the contestants joined in a legal attack upon the validity of the residual clause and plaintiffs would have received an additional sum of $15,000 from the estate if the releases had been prepared in accord with good legal practice. The trial court sustained a general demurrer to the second amended complaint without leave to amend and entered a judgment of dismissal from which the plaintiffs appealed.
View caseA future interest does not entitle its holder to immediate possession. Instead it becomes possessory only upon the natural termination of a prior estate or the happening of a condition. The distinction preserves the grantor's ability to control the timing of possession while still creating valid property rights.
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Yes. The same rules that govern creation of future interests in land also apply to limitations of future or contingent interests in personal property. A grantor may therefore divide ownership of either type of asset into present and future components.
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A court may order sale when continued use would cause economic waste and the proceeds can be invested to protect the income interests of both the life tenant and the holders of future interests. The sale converts the future interests into rights in the trust proceeds rather than in the land itself.
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A future interest holder possesses only an expectancy until the interest vests in possession. Mere expectancies do not confer standing as real parties in interest when the present possessor is the party directly harmed.
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