The Timing of Property Rights
While A.R.S. 33-201 classifies real estate interests by how long they last, this statute classifies them by when possession begins. The distinction matters because it determines who can occupy and use the property right now versus who will have that right later.
Estates in lands, as respects the time of enjoyment, are divided into: 1. Estates in possession. An estate in possession is one in which the owner thereof has an immediate right to possession of the land. 2. Estates in expectancy. An estate in expectancy is one in which the right of the owner thereof to possession of the land is not immediate, but is postponed to a future time or period.
A.R.S. § 33-203If you own your home and live in it, you hold an estate in possession. If a parent creates a life estate for themselves and names you as the remainder beneficiary, you hold an estate in expectancy. Your ownership interest is real, but your right to move in does not begin until the life estate ends.
Why This Matters for Estate Planning
Future estates in expectancy come up often in family planning. Parents sometimes deed real estate to children while keeping a life estate. The children own a future interest, but the parent keeps the right to live there.
This arrangement can have significant tax and Medicaid effects. Families considering this approach should understand the full picture before signing anything.