What are the two forms of future interests in property?

The two forms of future interests in property are reversion and remainder. A reversion is a future interest retained by a grantor after conveying a lesser estate to another party; it comes back to the original owner once the lesser estate terminates. For example, if a property owner grants someone a life estate, the property reverts to the owner or their heirs upon the death of the life tenant.

On the other hand, a remainder is a future interest that arises when a grantor creates a life estate and specifies that after the life tenant's interest ends, the estate will pass to a third party. This third party holds a remainder interest in the property.

Selecting reversion and remainder illustrates the distinction between types of future interests, emphasizing their critical role in property law and how they govern the transfer and future possession of property rights.

Other choices do not correctly represent future interests. Leasehold and freehold refer to estates regarding possession and duration but do not indicate future interests specifically. Present and future possession describe the timing of possession rather than distinct categories of future interests. A life estate is a type of present interest rather than a future interest, and a joint estate is not commonly recognized as a specific future interest in property law.