Ownership of real property - Executory interests

Learning Outcomes

This article explains executory interests in real property for MBE purposes, including:

• Defining executory interests as future interests in transferees and distinguishing them from reversionary interests retained by the grantor.
• Distinguishing shifting from springing executory interests based on whose estate is divested and how possession changes hands.
• Recognizing conveyances that create a fee simple subject to an executory interest rather than a determinable fee or condition subsequent.
• Comparing executory interests with vested and contingent remainders, including how each follows different present estates on bar-exam style questions.
• Applying the Rule Against Perpetuities to executory interests, identifying validating lives, and determining when an interest is void for remoteness.
• Reclassifying estates on RAP failure, including converting a fee simple subject to an executory limitation into a fee simple absolute or reversionary structure.
• Spotting MBE trap language in defeasible-fee conveyances—especially words like "ever"—that signal likely RAP violations for executory interests.
• Analyzing executory interests linked to class gifts, charities, and the charity-to-charity exception, and predicting how those doctrines affect exam outcomes.
• Evaluating the transferability, descendibility, and devisability of executory interests under modern law to determine who ultimately owns the property.

MBE Syllabus

For the MBE, you are required to understand the rules governing future interests in real property, with a focus on the following syllabus points:

• Present estates and future interests: fee simple, defeasible fees, life estates, remainders, executory interests, reversions, possibilities of reverter, and rights of entry.
• Distinguishing remainders (vested and contingent) from executory interests.
• Future interests associated with defeasible fees, including fee simple subject to an executory interest.
• Rules affecting these interests, including the Rule Against Perpetuities, class gifts, and related doctrines.
• Alienability, descendibility, and devisability of present and future interests.
• Special rules affecting remainders (e.g., Rule in Shelley’s Case, Doctrine of Worthier Title) versus executory interests.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is a characteristic of an executory interest?
   1. It always follows a life estate.
   2. It must divest or cut short a prior interest.
   3. It is always held by the grantor.
   4. It is not subject to the Rule Against Perpetuities.
2. In which scenario does a springing executory interest arise?
   1. O conveys "to A for life, then to B."
   2. O conveys "to A, but if B returns from abroad, then to B."
   3. O conveys "to A, to take effect one year after O's death."
   4. O conveys "to A for life, then to B if B survives A."
3. Which of the following statements about the Rule Against Perpetuities and executory interests is correct?
   1. All executory interests are exempt from RAP.
   2. Only shifting executory interests are subject to RAP.
   3. Executory interests must vest, if at all, within the perpetuities period.
   4. RAP applies only to interests retained by the grantor.

Introduction

Executory interests are a core future‑interest topic on the MBE. They arise when a future interest is created in a transferee (someone other than the grantor) and that interest will cut short or divest a prior estate, or will become possessory only after a gap in possession. Unlike remainders, executory interests do not wait for the natural expiration of the preceding estate; instead, they take effect by divesting another interest or by springing into possession after a delay.

To put executory interests in context, recall the basic division of ownership interests:

• Present possessory estates (e.g., fee simple absolute, defeasible fees, life estates).
• Future interests (e.g., reversions, remainders, executory interests, possibilities of reverter, rights of entry).

Key Term: Defeasible Fee
A fee simple estate that may end upon the occurrence of a specified event, so that the holder can be cut off before the estate would otherwise last forever.

Key Term: Executory Interest
A future interest in a transferee that does not become possessory at the natural expiration of the prior estate but instead must divest (cut short) a prior interest or arise after a gap in possession.

Executory interests are always held by transferees—not by the grantor—and they are always considered contingent (never “vested” in the technical perpetuities sense) because they depend on a condition that might never occur. For RAP purposes, an executory interest “vests” when it either becomes possessory or fails forever; until then, it is contingent.

Why classification matters on the MBE

Correctly classifying future interests is not just a vocabulary exercise. It affects:

• Which rules apply:

  • RAP applies to executory interests and contingent remainders, but not to possibilities of reverter or rights of entry.
  • Old doctrines like the Rule in Shelley’s Case or the Doctrine of Worthier Title target remainders, not executory interests.

• Who holds what if something is void:

  • If an executory interest is void under RAP, the preceding estate often “expands” into a fee simple absolute or becomes a defeasible fee with a reversionary interest in the grantor.

• Marketability and transferability:

  • A valid executory interest is usually transferable, devisable, and descendible; a void one is treated as if it never existed.

On MBE questions, many wrong answers hinge on mislabeling a future interest (e.g., calling something a possibility of reverter rather than an executory interest). Once the label is wrong, the RAP analysis and the result are usually wrong as well.

Key Term: Present Possessory Estate
An estate that gives its holder the current, legal right to possess and use the property, such as a fee simple, a defeasible fee, or a life estate.

Remainders vs. Executory Interests

Future interests in transferees come in only two types: remainders and executory interests. Correct classification is heavily tested.

Key Term: Remainder
A future interest in a transferee that becomes possessory upon the natural expiration of the preceding estate, without divesting that estate and without any gap in possession.

A remainder must follow a life estate or another limited estate that will naturally end. A remainder can never follow a fee simple, because a fee simple has potentially infinite duration and does not naturally expire.

Executory interests fill the gaps that remainders cannot:

• If the future interest in a transferee follows a fee simple of any kind, it must be an executory interest.
• If the future interest can take only by cutting short (divesting) the prior estate before its natural conclusion, it must be an executory interest.
• If there is a built‑in time gap (e.g., “one year after A’s death”), the future interest is an executory interest because it does not take at the moment the prior estate naturally ends.

Exam tip:

• Always ask: When would this transferee take possession?
  • At the natural end of the prior estate, with no gap and no divesting → remainder.
  • By cutting short the prior estate or after a gap → executory interest.

Types of Executory Interests

There are two main types of executory interests tested on the MBE: shifting and springing. The distinction turns on whose interest is divested.

Key Term: Shifting Executory Interest
An executory interest that divests or cuts short the interest of another transferee (a prior grantee).

Key Term: Springing Executory Interest
An executory interest that divests the grantor (or the grantor’s estate) or arises after a gap during which the property would otherwise belong to the grantor or the grantor’s successors.

A quick exam tip from the outlines:

• If there are two people in the conveyance (grantor and one transferee) and the transferee’s future interest will cut off the grantor, think springing.
• If there are three people (grantor plus two transferees), and one transferee may cut off another transferee, think shifting.

Shifting Executory Interests

A shifting executory interest “shifts” ownership from one transferee to another.

Example pattern:
“O conveys ‘to A, but if liquor is ever served on the premises, then to B and her heirs.’”

• A receives a fee simple that can be cut short.
• B holds a shifting executory interest, because B will divest A if the condition occurs.

Key Term: Fee Simple Subject to Executory Interest
A defeasible fee simple that will end upon the occurrence of a specified event, with the future interest going automatically to a transferee (not back to the grantor).

Many shifting executory interests appear as the future interest following a fee simple subject to an executory interest (also called a fee simple subject to an executory limitation).

A shifting executory interest can also cut short a remainder:

• “To A for life, then to B, but if B ever smokes on the property, then to C.”
  • A: life estate.
  • B: vested remainder in fee simple subject to an executory limitation.
  • C: shifting executory interest (cuts short B’s remainder).

The key is that the future interest does not patiently wait for the prior transferee’s estate to end; it takes earlier, if the condition occurs.

Springing Executory Interests

A springing executory interest “springs” out of the grantor’s retained estate, often after a gap in time or the happening of a condition.

Example pattern:
“O conveys ‘to A when A is admitted to the bar.’”

• O keeps a present fee simple until A passes the bar.
• A has a springing executory interest that will cut off O when the condition is satisfied.

Another classic pattern creates a time gap:

“O conveys ‘to A for life, and one year after A’s death, to B.’”

• A has a life estate.
• At A’s death, O (or O’s estate) has possession during the one‑year gap.
• B has a springing executory interest that will divest O’s reversion one year after A dies.

Springing executory interests often appear in donative transfers that delay possession:

• “To A, to take effect one year after O’s death.”
  A must divest O’s estate after the one‑year delay; that is a springing executory interest.

Worked Example 1.1

O conveys “to A, but if B marries before A dies, then to B.”

Answer:
B has a shifting executory interest. If B marries before A’s death, B’s interest will divest A’s interest. A holds a fee simple subject to an executory interest. This executory interest must vest, if at all, during A’s lifetime (a life in being), so it satisfies the Rule Against Perpetuities.

Worked Example 1.2

O conveys “to A, to take effect one year after O’s death.”

Answer:
A has a springing executory interest. At O’s death, O’s estate would otherwise keep the property, but one year later A’s interest will divest the grantor’s estate. Because the interest must vest, if at all, within one year after O’s death, it complies with RAP. O holds a present fee simple subject to A’s springing executory interest.

Executory Interests and Defeasible Fees

Executory interests often appear as the future interest associated with defeasible fees.

Key Term: Fee Simple Determinable
A fee simple that automatically ends upon the occurrence of a stated event, using durational language such as “so long as,” “while,” or “during.”

Key Term: Fee Simple Subject to Condition Subsequent
A fee simple that does not automatically terminate on the occurrence of a condition, but gives the grantor a right to end the estate, using conditional language such as “but if,” “provided that,” or “on condition that,” coupled with a right of entry.

Key Term: Possibility of Reverter
The future interest retained by the grantor when a fee simple determinable is created; on the happening of the stated event, the property automatically reverts to the grantor.

Key Term: Right of Entry
Also called a power of termination; the future interest retained by the grantor when conveying a fee simple subject to condition subsequent, requiring the grantor to take action to reclaim possession after the condition occurs.

If a third party (not the grantor) holds the future interest following a defeasible fee, that future interest is an executory interest:

• “To A and her heirs, so long as the land is used as a school, then to B and her heirs.”
  • A: fee simple determinable subject to an executory interest.
  • B: shifting executory interest.

The MBE loves to test this distinction:

• If the grantor holds the future interest → possibility of reverter or right of entry.
• If a third party holds the future interest → executory interest.

You can summarize the three common defeasible fee patterns:

• “So long as / while / during” + future interest in grantor → fee simple determinable + possibility of reverter.
• “But if / provided that / on condition that” + right in grantor to re‑enter → fee simple subject to condition subsequent + right of entry.
• Any defeasible language + future interest in a third party → fee simple subject to an executory interest + executory interest in that third party.

Worked Example 1.3

An attorney conveyed the historic building that housed her law practice “to my niece, but if she fails to pass the bar exam within a year of her law school graduation, to my nephew.”

Answer:
The niece has a fee simple subject to an executory interest. The nephew has a shifting executory interest, because if the condition occurs, he will divest a transferee (the niece), not the grantor. The attorney (grantor) has conveyed away her entire interest and retains no future interest. The condition is tied to a specific time (within one year of graduation), so the executory interest clearly satisfies RAP.

Creation and Operation

Executory interests are created by language in a conveyance that makes clear the future interest will:

• Cut short a prior estate; or
• Arise after a gap in possession.

Typical phrases:

• “but if … then to …”
• “however, if … then to …”
• “to A when …”
• “to A, to take effect [time period] after …”
• “and if [event] occurs, then to [third party].”

Executory interests are always contingent on the occurrence of the stated event. If the condition never occurs, the executory interest never becomes possessory. The preceding estate either continues indefinitely (if it is a fee simple) or ends in favor of another future interest (such as a reversion).

On an MBE question, a good classification approach is:

• Identify the present possessory estate (life estate, fee simple absolute, or one of the defeasible fees).
• Ask whether the future interest follows the natural end of the preceding estate:
  • If yes, and the preceding estate is a life estate → remainder.
  • If not (it cuts off the prior estate or follows a gap) → executory interest.
• Ask whose interest is being cut off:
  • Grantor → springing executory interest.
  • Another transferee → shifting executory interest.

This “what does it follow, and whom does it cut off?” framework is often enough to get the classification right quickly under exam time pressure.

Worked Example 1.4

O conveys “to A for life, then to B, but if B ever sells alcohol on the land, then to C.”

Answer:
A has a life estate. B has a vested remainder in fee simple subject to an executory limitation. C has a shifting executory interest that will divest B if B sells alcohol on the land. Because the condition (“ever sells alcohol”) could occur long after all lives in being have died, C’s interest is vulnerable under RAP. If the grant had instead said, “if B sells alcohol on the land during B’s lifetime,” C’s interest would be much more likely to satisfy RAP because B’s life would be a validating life.

Comparison with Remainders (Expanded)

Executory interests and remainders overlap conceptually, so the examiners often test borderline cases.

Key differences:

• Timing:

  • Remainders: take only at the natural termination of the preceding estate.
  • Executory interests: take by divesting a prior interest or after a gap.

• Preceding estate:

  • Remainders: must follow a life estate or similarly limited estate.
  • Executory interests: can follow a life estate, a fee simple, or a gap after any estate.

• Following a fee simple:

  • A remainder can never follow a fee simple.
  • Any future interest in a transferee that follows a fee simple is an executory interest.

Executory interests also differ in some doctrinal ways (less heavily tested today):

• Executory interests are not subject to the old “destructibility of contingent remainders” doctrine; they are simply valid or invalid under RAP.
• The Rule in Shelley’s Case and the Doctrine of Worthier Title apply to certain remainders, not to executory interests.

Key Term: Destructibility of Contingent Remainders
A largely abolished common‑law rule under which contingent remainders had to vest by the end of the preceding life estate or be destroyed; this rule did not apply to executory interests.

Another subtle but testable point is that future interests are classified clause by clause:

• The first future interest that follows a life estate will be classified as a remainder (vested or contingent) if it can take at the natural end of the life estate.
• Any later interest that cuts short that remainder is an executory interest, because a remainder cannot follow a fee simple and cannot divest another remainder.

Example pattern:

• “To A for life, then to B, but if B predeceases A, then to C.”

Here:

• A: life estate.
• B: vested remainder in fee simple subject to an executory limitation (B is ascertained; no condition precedent to his taking apart from termination of A’s life estate).
• C: shifting executory interest that will divest B’s remainder if B dies before A.

The classification is driven by recognizing that B’s interest is vested and that C’s interest must cut it short, so C cannot hold a remainder.

Worked Example 1.5

O conveys “to A for life, then to B if B survives A; but if B does not survive A, to C.”

Answer:
A has a life estate.
B’s interest is written with a condition precedent (“if B survives A”), so B has a contingent remainder in fee simple.
C’s interest is an alternative contingent remainder (C will take, but only if B’s condition fails).
Because the first future interest after A’s life estate is contingent, later interests attached to the same life estate are also classified as contingent remainders, not executory interests. There is no executory interest in this conveyance. RAP will apply to both contingent remainders, but they are likely valid because everything must be resolved at A’s death, a life in being.

Worked Example 1.6

O conveys “to A for life, then to B; but if B dies without leaving issue surviving, then to C.”

Answer:
A has a life estate. B is an ascertained person, and nothing must happen before B can take at A’s death; thus B has a vested remainder in fee simple subject to an executory limitation. The phrase “but if B dies without leaving issue surviving” describes a condition subsequent that could cut short B’s remainder after it becomes possessory. C has a shifting executory interest that will divest B’s estate if the condition occurs. On RAP analysis, the clause “dies without issue surviving” is often treated as referring to B’s death (a life in being), so C’s interest is typically valid.

Rule Against Perpetuities (RAP) and Executory Interests

Executory interests are classic RAP territory. The common‑law Rule (tested on the MBE) provides:

Key Term: Rule Against Perpetuities
No interest is valid unless it must vest, if at all, no later than 21 years after the death of some life in being at the time of creation.

Executory interests are not vested interests; they must either vest (become possessory) or fail within the perpetuities period. If there is any possibility—even a remote one—that an executory interest might vest outside the period, it is void from the outset.

On the MBE, RAP applies to:

• Contingent remainders.
• Executory interests.
• Vested remainders subject to open (class gifts), until the class closes.

RAP does not apply to:

• Reversions.
• Possibilities of reverter.
• Rights of entry.
• Indefeasibly vested remainders in individuals.

Common RAP Pattern: Executory Interest after a Defeasible Fee

The examiners frequently use this classic trap:

• “To A, but if the land is ever used for commercial purposes, then to B.”

Here:

• A has a fee simple subject to an executory interest.
• B has a shifting executory interest.

The problem is the word “ever”. The condition could be satisfied hundreds of years from now, so there is a possibility B’s interest could vest outside the perpetuities period.

Because B’s executory interest violates RAP, it is stricken from the conveyance. The remaining interests are reclassified:

• The language now effectively reads: “To A” → A has a fee simple absolute.

This pattern recurs with many variations, so always ask:

• Does this executory interest have to vest (or fail) within a life in being plus 21 years?

Worked Example 1.7

O conveys “to School so long as it is used for educational purposes, and when it is no longer so used, to A.”

Answer:
School has a fee simple determinable subject to an executory interest. A has a shifting executory interest that will take if the school ever stops using the land for educational purposes. Because the property could stop being used for education hundreds of years from now, A’s interest might vest outside the perpetuities period. Under RAP, A’s executory interest is void from the start. Striking the invalid interest leaves School with a fee simple determinable, and O (the grantor) retains a possibility of reverter.

Notice how the identity of the future interest changes once the executory interest is removed.

Charities and the Charity‑to‑Charity Exception

There is one important exception.

Key Term: Charity-to-Charity Exception
A gift over from one charity to another charity by way of an executory interest is valid even if it could vest outside the perpetuities period.

Example:

“O conveys ‘to Church for so long as the premises are used for church purposes, and when they cease to be so used, then to the American Red Cross.’”

• Church has a fee simple determinable subject to an executory interest.
• The Red Cross has a shifting executory interest.
• The executory interest is valid under the charity‑to‑charity exception, despite the potentially remote vesting.

Contrast:

“O conveys ‘to Church so long as the premises are used for church purposes, and when they cease to be so used, then to A.’”

• A’s executory interest is not protected by the exception (A is not a charity).
• A’s shifting executory interest violates RAP and is void; Church instead holds a fee simple determinable with a possibility of reverter in O.

Worked Example 1.8

O conveys “to the Georgetown YMCA for so long as the premises are used for YMCA purposes; and when they shall cease to be so used, then and in that event to the American Cancer Society.”

Answer:
The YMCA has a fee simple determinable subject to an executory interest. The American Cancer Society (another charity) holds a shifting executory interest. Because both the present and future interest holders are charities, the charity‑to‑charity exception applies, and the executory interest is valid even though it might vest far beyond the perpetuities period.

Validating Lives and Executory Interests

RAP analysis can be structured around the “When, What, Who” method.

Key Term: Validating Life
A life in being at the time the interest is created whose lifetime (plus 21 years) determines whether the interest must vest or fail; if we can be certain within that person’s life plus 21 years, the interest is valid.

For executory interests, common validating lives include:

• The prior life tenant (e.g., “during A’s life”).
• The holder of the executory interest, when the condition is tied to that person’s lifetime (e.g., “if B marries during her life”).
• Any person whose life limits when the condition can occur (e.g., “within 20 years after X’s death”).

A structured approach:

• When: Identify when the interests are created.

  • Inter vivos transfer → at the date of the deed.
  • By will → at the testator’s death.

• What: Identify which interests are subject to RAP.

  • Executory interests almost always are; reversionary interests never are.

• Who: Look for a person alive at creation whose life will determine vesting or failure.

  • If you can name such a person, the interest is usually valid.
  • If you cannot, the interest is likely void.

Worked Example 1.9

O conveys “to A, but if the land is ever used as a business during A’s lifetime, then to B.”

Answer:
A has a fee simple subject to an executory interest. B has a shifting executory interest.
When: Inter vivos conveyance; interests created at the time of the deed.
What: B’s shifting executory interest is subject to RAP.
Who: A is a life in being. We will know by the time of A’s death whether the land was used as a business during A’s life. Thus A is a validating life, and B’s executory interest satisfies RAP.

Worked Example 1.10

O conveys “to A and her heirs, but if alcohol is ever sold on the premises, then to B and her heirs.”

Answer:
A has a fee simple subject to an executory interest. B has a shifting executory interest. The condition is not limited to any life in being and could be satisfied at any time in the indefinite future. There is no obvious validating life. Because it is possible that alcohol is first sold more than 21 years after all lives in being have died, B’s executory interest violates RAP and is void. Striking B’s interest leaves A with a fee simple absolute.

Exam Warning

Executory interests that follow a fee simple subject to an executory limitation are especially likely to violate RAP when the condition is not expressly tied to a life in being. Watch for phrases like:

• “if X ever occurs”
• “if the land is ever used as …”
• “if B or B’s heirs ever …”

Unless the grant clearly limits vesting to a life in being or to a fixed number of years (e.g., “within 20 years”), assume the interest might vest too remotely.

Additional RAP consequences for executory interests

When an executory interest is void:

• The invalid interest is treated as if it was never written.
• Other interests remain valid if they independently satisfy RAP.
• The preceding estate is reclassified:
  • If it was a fee simple subject to an executory interest, it usually becomes:
    • A fee simple absolute (if no valid grantor future interest remains); or
    • A determinable fee or fee simple subject to condition subsequent with a reversionary interest in the grantor.

Because possibilities of reverter and rights of entry are exempt from RAP, the exam often uses a pattern like:

• “To School so long as it is used for educational purposes, and when it is no longer so used, to A.”

A’s invalid executory interest is struck, leaving School with a fee simple determinable and O with a possibility of reverter (which may then be transferable by statute).

Revision Tip

On the MBE:

• If a future interest in a transferee cuts short a prior estate or follows a fee simple → label it an executory interest.
• If a future interest in a transferee waits patiently for the natural end of a life estate and takes immediately at that point → label it a remainder.
• Once you correctly classify the interest, then ask whether it is subject to RAP and, if so, whether it might vest too remotely.

Key Point Checklist

This article has covered the following key knowledge points:

• Executory interests are future interests in transferees that divest a prior estate or arise after a gap in possession.
• Shifting executory interests divest another transferee; springing executory interests divest the grantor or the grantor’s estate.
• Any future interest in a transferee that follows a fee simple is an executory interest, not a remainder.
• When a third party, rather than the grantor, holds the future interest following a defeasible fee, that future interest is an executory interest.
• A fee simple determinable with a future interest in the grantor creates a possibility of reverter; with a future interest in a third party, it creates an executory interest.
• A fee simple subject to condition subsequent with a future interest in the grantor creates a right of entry; with a future interest in a third party, it creates an executory interest.
• Executory interests are always subject to the Rule Against Perpetuities and are never considered vested.
• Executory interests that can vest “at any time in the future” often violate RAP, especially when they follow a defeasible fee.
• The charity‑to‑charity exception saves otherwise remote executory interests between charities.
• If an executory interest violates RAP, it is stricken from the conveyance, and the remaining estates are reclassified (often leaving a fee simple absolute or a defeasible fee with a reversionary interest in the grantor).
• Remainders differ from executory interests because they never cut short a prior estate and cannot follow a fee simple.
• Future interests are classified clause by clause; once a first future interest is identified as a vested remainder, any later future interest that cuts it short will be an executory interest.
• Most executory interests are freely transferable, devisable, and descendible in modern law, unless a specific restriction applies.

Key Terms and Concepts

• Defeasible Fee
• Executory Interest
• Shifting Executory Interest
• Springing Executory Interest
• Present Possessory Estate
• Remainder
• Fee Simple Subject to Executory Interest
• Fee Simple Determinable
• Fee Simple Subject to Condition Subsequent
• Possibility of Reverter
• Right of Entry
• Rule Against Perpetuities
• Validating Life
• Charity-to-Charity Exception
• Destructibility of Contingent Remainders