Remainder (law)
Encyclopedia
A remainder in property law
is a future interest
given to a person (who is referred to as the transferree or remainderman
) that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument. For example, a person, D, gives ("devises") a piece of real property called Blackacre
“to A for life, and then to B and her heirs.” A receives a life estate
in Blackacre and B holds a remainder which is capable of becoming possessory when the prior estate naturally terminates (A’s death). However, B cannot claim the property until A's death. There are two types of remainders in property law, vested and contingent. A future interest following a fee simple absolute cannot be a remainder because of the preceding infinite duration.
and a remainder is that a reversion is held by the grantor of the original conveyance, whereas "remainder" is used to refer to an interest that would be a reversion, but is instead transferred to someone other than the grantor. Similarly to reversions, remainders are usually created in conjunction with a life estate, life estate pur autre vie, or fee tail estate (or a future interest that will eventually become one of these estates).
Usage Note: Although the term reversion is sometimes used to refer to the interest retained by a landlord when he grants possession to a tenant, not all real estate professionals can agree on the correctness of this usage of the term. Few people would refer to such a transferred interest as a remainder, so this type of "remainder" tends not to be a problem when discussing property rights.
B is not a remainder since a remainder cannot follow an estate held in fee simple absolute.
"A for life, then to B"
B is a vested remainder since the remainder is given to an ascertained person (B) and there are no precedent conditions (such as "if B is not married").
"A for life, then to B if B reaches 21, and if B does not reach 21 then to C and C's heirs"
B and C are both contingent remainders. While B and C are ascertained persons, the condition (reaching 21) implies alternative contingent remainders for both parties.
Property law
Property law is the area of law that governs the various forms of ownership in real property and in personal property, within the common law legal system. In the civil law system, there is a division between movable and immovable property...
is a future interest
Future interest
In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; that is, an estate with a condition or event...
given to a person (who is referred to as the transferree or remainderman
Remainderman
A remainderman is a person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. Usually this occurs due to the death or termination of the former owner's life estate, but this can also occur due to a specific notation in a trust passing ownership...
) that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument. For example, a person, D, gives ("devises") a piece of real property called Blackacre
Blackacre
Blackacre, Whiteacre, Greenacre, Brownacre, and variations are the placeholder names used for fictitious estates in land.The names are used by professors of law in common law jurisdictions, particularly in the area of real property and occasionally in contracts, to discuss the rights of various...
“to A for life, and then to B and her heirs.” A receives a life estate
Life estate
A life estate is a concept used in common law and statutory law to designate the ownership of land for the duration of a person's life. In legal terms it is an estate in real property that ends at death when there is a "reversion" to the original owner...
in Blackacre and B holds a remainder which is capable of becoming possessory when the prior estate naturally terminates (A’s death). However, B cannot claim the property until A's death. There are two types of remainders in property law, vested and contingent. A future interest following a fee simple absolute cannot be a remainder because of the preceding infinite duration.
Vested remainder
A remainder is vested if (1) the remainder is given to a presently existing and ascertained person, and (2) it is not subject to a condition precedent. A vested remainder may be indefeasibly vested, meaning that it is certain to become possessory in the future, and cannot be divested. An example, O conveys to "A for life, then to B and B's heirs." B has an "indefeasibly vested remainder" certain to become possessory upon termination of A's life estate. B or B's heirs will clearly be entitled to possession upon A’s death. A vested remainder may not be certain to become possessory. An example of this: O conveys "to A for life, then to A's children." A has one child, B, so B has a vested remainder because B is ascertainable. But, A may have no other children in his life, and B could die before A, so the vested remainder is not certain to become possessory.Contingent remainder
A remainder is contingent if one or more of the following is true: (1) it is given to an unascertained or unborn person, (2) it is made contingent upon the occurrence of some event other than the natural termination of the preceding estates. For example, if we assume that B is alive, and O conveys "to A for life, then to the heirs of B...", then the remainder is contingent because the heirs of B cannot be ascertained until B dies. No living person can have actual heirs, only heirs apparent.Identifying remainders
The key difference between a reversionReversion (law)
A reversion is a type of "remainder" interest created when incomplete ownership in property is alienated subject to a condition subsequent. Upon the fulfillment of the condition subsequent, the incomplete possessory rights cease to exist and exclusive ownership returns to the holder of the...
and a remainder is that a reversion is held by the grantor of the original conveyance, whereas "remainder" is used to refer to an interest that would be a reversion, but is instead transferred to someone other than the grantor. Similarly to reversions, remainders are usually created in conjunction with a life estate, life estate pur autre vie, or fee tail estate (or a future interest that will eventually become one of these estates).
Usage Note: Although the term reversion is sometimes used to refer to the interest retained by a landlord when he grants possession to a tenant, not all real estate professionals can agree on the correctness of this usage of the term. Few people would refer to such a transferred interest as a remainder, so this type of "remainder" tends not to be a problem when discussing property rights.
Examples
"A and her heirs, then to B"B is not a remainder since a remainder cannot follow an estate held in fee simple absolute.
"A for life, then to B"
B is a vested remainder since the remainder is given to an ascertained person (B) and there are no precedent conditions (such as "if B is not married").
"A for life, then to B if B reaches 21, and if B does not reach 21 then to C and C's heirs"
B and C are both contingent remainders. While B and C are ascertained persons, the condition (reaching 21) implies alternative contingent remainders for both parties.