Executory Interest Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Executory Interest, written in plain English, along with examples of how it is used.
What is Executory Interest?
n. If certain events occur, the passing of an interest in property to another in the future.
History and Meaning of Executory Interest
Executory interest is a legal term that refers to the passing of an interest in a property to another individual in the future. This passing of the interest is contingent upon the happening of certain events. Essentially, an executory interest allows for a transfer of ownership to occur at some point in the future, but only if specific conditions are met.
This legal term is commonly used in real estate transactions, as contracts frequently involve the transfer of property ownership at a specific point in time. Executory interest is also utilized in trust agreements and wills, allowing for the transfer of assets to designated beneficiaries at a later date.
Examples of Executory Interest
John Smith buys a piece of land, but stipulates in the contract of sale that if he fails to pay the full purchase price within two years, the executory interest in the property will pass to Jane Doe.
A father bequeaths his property to his son, but only when the son reaches the age of 30. In the meantime, the executory interest remains with the father's brother.
A real estate developer builds a condominium building under the condition that buyers will take an executory interest in the property, allowing for ownership once the building is completed.
Legal Terms Similar to Executory Interest
Remainder interest - refers to the interest in a property that a person has following the termination of a limited property interest.
Contingent interest - denotes an interest in a property that is dependent upon a specific event occurring.
Vested interest - describes an immediate and unconditional interest in a property or asset that may not be revoked or taken away.