Encumbrances allow a state to specify another state that must be present in any transaction that consumes it. For example, a time lock contract can define a state that contains the time at which the lock expires, and a simple contract that just compares that time against the transaction timestamp. The asset state can be included in a spend-to-self transaction that doesn’t change the ownership of the asset but does include a time lock state in the outputs. Now if the asset state is used, the time lock state must also be used, and that triggers the execution of the time lock contract.