What is an executory interest property?
A future interest in property that will be triggered on the happening of a stated event. An executory interest can be springing (meaning the previous interest was held by the grantor) or shifting (meaning the previous interest was held by someone other then the grantor).
What is an executory or contingent interest?
An executory interest is a type of future interest in property, held by a third-party transferee which extinguishes another’s interest, or commences after the natural termination of a preceding estate.
What is the difference between a remainder and an executory interest?
A key difference between a remainder and an executory interest is that a remainder interest doesn’t take away the interests of a prior interest holder, while an executory interest can cut off the prior interest.
What is the difference between springing and shifting executory interest?
Shifting executory interests go from one grantee to another upon the occurrence of some condition. Springing executory interests go from the grantor to a grantee upon the occurrence of some condition.
What does the word executory mean?
1 : designed or of such a nature as to be executed in time to come or to take effect on a future contingency. 2 : relating to administration.
Is an executory interest automatic?
Fee simple subject to an executory limitation The interest will not revert to the grantor. If the condition is met, the grantee loses the interest and the third party gains it automatically.
Is an executory interest vested?
An executory interest vests upon any condition subsequent except the natural termination of the original grantee’s rights. In other words, an executory interest is any future interest held by a third party that isn’t a remainder.
What is an executory contract in real estate?
A contract under which unperformed obligations remain on both sides, or where both parties have continuing obligations to perform. For example, most leases or contracts for the sale of goods where the goods have not been delivered by the seller and the buyer has not paid, are executory contracts.
What is a springing interest?
Springing interest is an interest in property where the person owns the property after something occurs or at a specified time. Springing interests often appear in wills and estates where a person inherits property only after something occurs.
What is shifting executory interest?
shifting executory interest (plural shifting executory interests) (law) A third party interest in an estate in land created by the conditions of a grant wherein the grantor gives the land to a second party, but with the occurrence of a condition divesting the second party of the land in favor of the third party.
What does executory mean in law?
Something (generally a contract) that has not yet been fully performed or completed and is therefore considered imperfect or unassured until its full execution. Anything executory is started and not yet finished or is in the process of being completed in order to take full effect at a future time.
Can an executory interest be contingent?
A contingent remainder is going to flow from the natural termination of the previous estate (as long as the condition is met). The estate already exists and then if the condition subsequent occurs, the estate will terminate early and go to the person holding the executory interest.
What is the legal definition of an executory interest?
Executory Interest Law and Legal Definition. Executory Interest is a future interest, held by a third person, that either cuts off another’s interest or begins after the natural termination of a preceding estate. It is an executory interest created in a person other than the transferor .
When do executory interests pass to a third party?
Executory interests will pass the property to a third party, however there are future interests that will return the property to the grantor upon the triggering of a certain condition. There are two kinds of these interests:
When does an executory interest nullify a remainder?
Remainders may be vested or contingent. Rarely, the Doctrine of Worthier Title and the Rule in Shelley’s Case may nullify an heir’s remainder interest. An executory interest is a future interest where a third party takes possession from the current holder if a specific event or condition occurs.
When does a transfer create an executory interest?
The transfer creates a springing executory interest in those who will be A’s heirs. (2) O transfers ‘to A for 200 years if he shall so long live, then to the heirs of A.’ This transfer also creates a springing executory interest in A’s prospective heirs.