Future Interest

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Future Interest

A claim on property, real or personal, that will begin at some point in the future. A future interest allows the grantor to retain the right to use that property until the specified transfer date. Future interest agreements are often used by donors for tax purposes. For example, a person may grant a future interest in his or her home to a charity, with the stipulation that he will retain use of the home for the remainder of his life, also called a "life estate." Although the charity will not receive the property until the donor's death, the donor can claim a tax deduction the same year the future interest is granted. Also called future estate.

Cross-references

Bequest; Will.

future interest

n. a right to receive either real property or personal property some time in the future, either upon a particular date or upon the occurrence of an event. Typical examples are getting title upon the death of the person having present use, outliving another beneficiary, reaching maturity (age 18), or upon marriage.

See: reversion
References in periodicals archive ?
2503-3(a) defines a future interest in property to include "reversions, remainders, and other interests or estates, whether vested or contingent .
Following her death, the IRS audited the estate and determined the gifts were not of a present interest but, instead, of a future interest, which meant additional gift taxes were due.
This introduction to the study of estates and future interests aims to demystify this difficult area of property law with plain language, a step-by-step approach, and ongoing use of one central graphic that organizes terms and shows how to analyze any conveyance.
The taxpayer argued that he had given up all his legal rights and had placed no restrictions on the interests gifted, so that the transfers involved no postponement of rights, powers or privileges that could cause the gifts to constitute future interests.
The PA companies are wholly owned subsidiaries of RDHC and have been founded for the purpose of holding and operating the company's current and future interests in environmental services, mining, and real estate redevelopment.

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