Define: Executory Interest

Executory interest refers to a future interest in property that is not yet vested but is capable of becoming vested upon the happening of a certain event or condition. Unlike vested interests, which are immediate and certain, executory interests are contingent on the occurrence of a future event, such as the death of a beneficiary or the expiration of a lease term. These interests typically arise in the context of trusts, wills, and property transfers, where they serve to provide for alternative beneficiaries or conditions based on future circumstances. Executory interests can be either springing, where they take effect in the future upon the occurrence of a specified event, or shifting, where they divest an existing interest and transfer it to another party.

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This glossary post was last updated: 29th March 2024.