Also known as: present interests
Written by attorneys · grounded in primary & secondary sources — see below
An interest in land or other property that entitles the holder to immediate possession or beneficial enjoyment. The interest is possessory at the moment of creation rather than postponed until a later event or the termination of a prior estate.
Philip Powell conveys Blackacre to Pedro Pacheco for life with remainder to Pamela Phillips. Pedro immediately begins collecting rents and occupies the land. Pedro holds a present interest because he enjoys current possession and use without waiting for any prior estate to end.
Pierre Poulin transfers stock to a trustee directing that income be paid quarterly to Patrick Phan. Patrick receives the first distribution the following month. Patrick holds a present interest because he possesses an immediate right to beneficial enjoyment of the trust income.
Select any source to read its text and confirm it supports the definition.
Penelope Price declares a trust over anticipated trading profits for the benefit of Progressive Healthcare. The assignee demands current accounting and payment once profits materialize. Progressive Healthcare holds a present interest once the profits come into existence because the assignment creates an immediate claim to enjoyment.
Phoenix Technologies funds a life insurance policy and names Paragon Construction as beneficiary under an irrevocable trust. The beneficiary obtains an immediate right to the policy proceeds subject only to the settlor's retained powers. Paragon Construction holds a present interest because the trust passes a current claim to the policy value.
Peak Performance's owner transfers a painting to his son while retaining a life estate. The father continues to possess and enjoy the painting. The father holds the present interest. The son receives only a future interest in the remainder because possession is postponed until the life estate ends.
Prospective homebuyers challenge zoning rules that allegedly block affordable housing construction by third-party developers. None of the buyers owns or leases any affected parcel. The buyers lack a present interest because they hold no current claim to possession or use of any Penfield property.
A present interest gives the holder an immediate right to possession or beneficial enjoyment. A future interest postpones that right until a later time or the termination of a prior estate. Both interests are created at the same moment, but only the present interest allows current use.
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Yes. The annual exclusion applies only to gifts of present interests that provide immediate use, possession, or enjoyment. A gift of a future interest does not qualify even if the transfer is complete.
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No. The remainder is a future interest because possession is postponed until the life estate ends. The life tenant alone holds the present interest during the measuring life.
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The beneficiary must receive an immediate, unrestricted right to income or principal. If the trust merely postpones enjoyment, the interest is future and ineligible for the annual exclusion.
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…(1973). We find the record devoid of the necessary allegations. As the Court of Appeals noted, none of these petitioners has a present interest in any Penfield property; none is himself subject to the ordinance's strictures; and none has ever been denied a variance or permit by respondent officials. 495 F. 2d, at 1191. Instead,…