🏠 What Is Future Interest in Real Estate?

A future interest is a legal right to receive property ownership at a later time. Unlike present estates, a future interest does not provide immediate possession. Instead, it becomes possessory when a prior estate—such as a life estate or a defeasible fee—ends. Future interests are essential in estate planning, inheritance, and deed structuring.

How Future Interests Work in Real Estate

A future interest is created when a property owner grants rights that begin in the future rather than immediately. The law recognizes several common types of future interests:

  • Remainder — Follows a life estate and transfers ownership to a remainderman upon the life tenant’s death.
  • Reversion — Ownership returns to the original grantor when a lesser estate ends.
  • Executory Interest — Transfers ownership to a third party automatically upon the occurrence of a condition.

Future interests may be either vested (guaranteed to a known person) or contingent (dependent on a condition or unknown recipient).

Why Future Interests Matter in Real Estate

Future interests affect property rights, title transfers, and estate planning strategies. Key reasons they matter:

  • They determine who will receive property after certain conditions are met.
  • They help families transfer real estate outside probate courts.
  • They influence title reports and can affect insurability.
  • They create long-term ownership structures in estate and tax planning.

For buyers and title companies:

  • Properties with future interests may require multiple signatures to sell.
  • Lenders may require clearance of contingent interests.
  • Unclear future interests can delay closing or cloud title.

Examples of Future Interests

Example 1: Remainder
“To Sarah for life, then to Robert.” Robert holds a remainder interest that becomes possessory when Sarah dies.

Example 2: Contingent Remainder
“To Tom for life, then to Tom’s first child.” If Tom has no children yet, the interest is contingent.

Example 3: Executory Interest
“To John, but if the property is ever used commercially, then to Emily.” Emily holds an executory interest that activates if John violates the condition.

Example 4: Reversion
“To David for life.” No future owner is named, so the property reverts to the grantor when David’s life estate ends.

Why Future Interests Matter for FSBO Sellers

Properties involving future interests can be more complex to sell because they may involve multiple ownership rights. Understanding future interests helps FSBO sellers:

  • Identify whether a life estate, remainder, or executory interest affects the title.
  • Determine which parties must sign listing and sale agreements.
  • Avoid delays caused by contingent or unclear ownership rights.

Sellers using Flat Fee MLS through Brokerless can disclose these structures upfront, helping buyers feel confident in the transaction.

Frequently Asked Questions

Is a future interest the same as a remainder?
A remainder is one type of future interest, but not the only type. Reversions and executory interests are also future interests.

Does a future interest give ownership rights now?
No. It gives a right to own in the future, not present possession.

Can future interests be sold?
Yes, many future interests can be transferred or inherited, although buyers must wait for the interest to become possessory.

Do future interests avoid probate?
Most do, especially remainders and executory interests, because ownership transfers automatically.

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