In the world of business and law, having something “vested” means that a person has an immediate right to use, possess, or receive a benefit. This right cannot be taken away, altered, or transferred to another person without the consent of the vested entity.
An example of something being vested may be a stock option or ownership stake that is granted to an employee at a certain level in the company. The employee who is vested in the stock options has a guaranteed right to purchase the shares at the specified price, regardless of the movement of the stock’s value in the future. These rights remain until the options expire or the company is dissolved.
Another example is when a business owner writes a will or trust that vests certain assets to a beneficiary in the event of their death. The beneficiary will ultimately have the right to the assets listed in the will, regardless of changes in the owner’s circumstances prior to their death. In this case, they are “vested” in the assets which have been given to them.
When a person is “vested,” they can begin to reap the benefits of what has been specified in the agreement. Generally speaking, understanding that something is vested means there are certain rights associated with it and that those rights can’t be taken away without the permission of the vested entity.