What term describes future interest held by a third party?

The correct term that describes future interest held by a third party is "Remainder." A remainder is an interest in real property that is created by a deed or will, which becomes possessory when a prior estate (such as a life estate) terminates. In this context, the third party is not the current owner of the property but is instead granted the right to take ownership at a future date, upon the termination of the preceding estate.

For instance, if someone conveys a property to one person for their lifetime, and then specifies that after their death, the property should pass to another person, that second person has a remainder interest. This clearly delineates the roles of current possessors and future claimants in property ownership.

Other terms in the options refer to different types of interests in real estate. A life estate grants ownership for the duration of a person's life, a fee simple is the most complete form of ownership with no time limit, and a leasehold estate involves a tenant's temporary right to occupy a property. None of these describes a future interest held specifically by a third party in the manner that a remainder does.