Although you may expect to receive an inheritance when a family member or loved one passes away, you typically do not have a right to receive the inheritance. This is called expectancy. On the contrary, if you have a legal right to receive an inheritance, it becomes a vested right.
A recent article discusses the difference between expectancy and a vested right. In the context of a will, any person who is named as a beneficiary in a will has only an expectancy in any future inheritance. Such expectancies become vested rights only when the person who executed the will dies.
In the context of an estate plan, vested rights occur most often when a person gifts real property that is subject to a reserved life estate to another. In cases such as this, the person who is named on the deed has an immediately vested right to the property. Therefore, this person has a legally enforceable right that cannot be changed or revoked.
In situations where trust accounts are involved, whether a person’s right to the trust assets are vested or a mere expectancy depend on the specifics of the trust itself. The life beneficiary of a revocable living trust only has an expectancy, because this type of trust can be changed through amendment or revocation. For an irrevocable trust, however, rights are vested because the terms of the trust cannot be changed.
