Definition
Think of this like owning a piece of property that's definitely yours. Once a vested interest kicks in, nobody can take it away—even if you're not physically in control of the property yet. It's the difference between "that will probably be mine someday" and "that's mine, no question about it."
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A vested interest is a property right that someone definitely owns, despite possibly not currently controlling the property. If you have a vested remainder interest in property, you definitely own it once the life estate ends, regardless of what the life estate holder does. Vested interests can be divided (multiple people can have vesting interests in the same property), mortgaged, inherited, and sold. The holder of a vested interest has legal rights that courts will enforce. Vested interests differ from contingent interests, which might or might not occur. A vested interest in a person means that person definitely owns the interest; a vested interest subject to divestment means someone currently owns it but might lose it if a condition occurs. Vested interests also have tax consequences—they're often subject to gift tax when transferred, capital gains tax when sold, and probate when inherited. Understanding vested interests is crucial in estate planning and property division disputes.
Pro Tip
Know whether your property interest is vested or contingent. Contingent interests are harder to sell or use as collateral because they depend on something happening first.
Example
A grandmother leaves her estate to her son 'in equal shares to my four children.' Her two adult children have vested interests in the estate; they definitely own their shares even though they haven't received distribution yet.