springing executory interest

Springing executory interest is a future interest in a third-party transferee that divests the grantor’s interests at a future time. It transfers the rights in property from a grantor to the third-party transferee when a specific event occurs. It is often used to ensure that the property is used for a specific purpose or that the third-party transferee only has the ownership when the conditions that the grantor intends to happen are met. There is a gap between the point when the original transferee loses their rights and the point when the third-party transferee obtains the rights. Consider the following example.

O to A for life, then to B if B handles A’s funeral well. (Suppose B outlives A.)

Here, O first gives A a life estate. A has the property rights while they are alive. The rights revert back to O and their heirs when A dies. While B works on A’s funeral, O retains the property rights (the previously mentioned gap). If B handles the funeral well, then B’s rights will spring out of O and divest O of their rights in the property.