A contingent interest is defined as an interest that the holder may enjoy only upon the occurrence of a condition precedent.
For example, say Bill writes in his will that he leaves his "interest in The Centerville Café to Sarah, if she is still living in Centerville." This conveyance promises Sarah ownership over The Centerville Café only if she is living in Centerville at the time which Bill dies. If she is not, she stands to lose her interest. Therefore, Sarah holds a contingent interest in The Centerville Café.
For comparison, another type of “interest” is a future interest. A future interest is contingent when the person to whom it is conveyed is unknown or the event upon which it is limited is uncertain. If the condition upon which a future interest depends is precedent (meaning comes before), the interest is contingent; if the condition is subsequent (meaning comes afterward), the interest is vested, subject to defeasance.
See e.g., Kamens v. Utica Mutual Insurance Company 776 N.Y.S.2d 671 (2004).
Related terms: condition subsequent; contingency; contingent ownership; estate planning; estates and trusts; real property
[Last updated in July of 2022 by the Wex Definitions Team]