In an executory interest, if the future interest divests the grantee's interest, it's called:

• A. Shifting executory interest
• B. Springing executory interest
• C. Contingent remainder
• D. Remainder in fee simple

Answer: (A)

The concept being tested is how future interests operate to cut short an existing estate. An executory interest is a future interest that can begin to possess only if a condition occurs, and it can do so by divesting someone else’s current interest. There are two kinds: shifting and springing. A shifting executory interest divests a grantee’s interest and passes the property to a new holder, which is exactly what happens when the future interest takes away the grantee’s rights and goes to another person. That’s why this scenario describes a shifting executory interest. A springing executory interest would divest the grantor’s own interest, not the grantee’s. A contingent remainder is a type of future interest that could become possessory after a preceding estate ends, but it does not cut short the current holder’s interest. A remainder in fee simple isn’t appropriate here because a remainder cannot cut short a preceding estate in this way.