A remainder refers to a future interest in property that is passed on to another individual after the current owner’s death or the termination of their ownership. For instance, if someone grants their house to their friend for their lifetime and then to the friend’s child, the child’s stake in the property is considered a remainder. There are various types of remainders, including vested remainders (where the recipient of the property is already known) and contingent remainders (where the recipient depends on a condition, such as getting married before the current owner’s demise). Additionally, a remainder can be indefeasibly vested, indicating that the designated individual is guaranteed to receive the property and retain it indefinitely.
A future interest in a third person is described as a situation where the person will acquire a present interest in the future, after the termination of the preceding estate. This future interest is not subject to any condition subsequent and the person is certain to retain the interest permanently. For example, if the gift is “To A for life, and then to B,” B’s future interest is a remainder that is indefeasibly vested. Similarly, if the gift is “To A for life, and then to B’s children,” B’s children have a remainder that is subject to open. However, if the gift is “To A for life, and then to B’s surviving children,” B’s children would have a remainder that is indefeasibly vested. These examples demonstrate that a remainder that is indefeasibly vested is a future interest that is certain to become a present interest and is not subject to any condition subsequent. In the first example, B’s interest in the property is certain to vest after A’s life estate ends, and there are no conditions that could prevent B from taking possession of the property. In the second example, if the gift is to B’s surviving children, then the interest is certain to vest in B’s children, and there are no conditions that could prevent them from taking possession of the property.
When a remainder is indefeasibly vested, it means that the right to receive the property or assets is guaranteed and cannot be taken away or revoked.
A contingent remainder is dependent on the occurrence of a specific event or condition, whereas an indefeasibly vested remainder is certain and not subject to any conditions.
Yes, a remainder indefeasibly vested can be transferred or sold like any other property interest, as long as there are no legal restrictions or limitations.
In such cases, the remainder will pass to the person’s heirs or beneficiaries according to their will or the laws of intestate succession.
No, a remainder indefeasibly vested cannot be revoked or terminated unless there is a specific legal provision or agreement allowing for such actions.
Generally, a remainder indefeasibly vested cannot be lost. However, if the property or assets subject to the remainder are destroyed or no longer exist, the right to receive them may be extinguished.
Yes, a remainder indefeasibly vested can be subject to taxes and other financial obligations, just like any other property interest.
In rare cases, a remainder indefeasibly vested may be subject to legal challenges if there are allegations of fraud, undue influence, or other irregularities in the creation or transfer of the property interest.
Generally, a remainder indefeasibly vested cannot be modified or altered unless all parties involved agree to the changes and follow the necessary legal procedures.
To ensure a remainder is indefeasibly vested in your estate planning, it is advisable to consult with an experienced attorney who can draft the necessary legal documents and provide guidance based on your specific circumstances.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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