The remainder interest is the property that is transferred to a beneficiary once the income interest has concluded. In other words, if an individual places their property in a trust and specifies that the income generated by the property is to be given to a specific person for their lifetime, then upon that person’s death, the property will be transferred to another individual, referred to as the remainder beneficiary.
A remainder interest refers to the property or assets that are transferred to a beneficiary once an intervening income interest has ended. For instance, if a grantor establishes a trust with a piece of real estate and designates A as the recipient of the income for their lifetime, upon A’s death, the property will be passed on to B. In this scenario, B holds a remainder interest in the property. Another example involves a trust created for a child’s education, where the income from the trust is utilised to cover educational expenses. Once the child completes their education, the remaining portion of the trust is then transferred to another beneficiary. These examples demonstrate the functioning of a remainder interest, which ensures that property or assets are utilised for a specific purpose or individual during a designated period, with the remainder being passed on to another beneficiary thereafter.
A remainder interest refers to the ownership interest in a property that takes effect after a specific event or condition occurs, such as the death of the current owner or the expiration of a lease.
A life estate grants an individual the right to use and enjoy a property for the duration of their life, while a remainder interest is the future ownership interest that becomes effective after the life estate ends.
Yes, a remainder interest can be sold or transferred to another party, just like any other property interest. However, the transfer may be subject to certain legal restrictions or conditions.
If the owner of a remainder interest dies without a will, the interest will pass according to the laws of intestate succession, which vary by jurisdiction. Typically, it would be inherited by the owner’s closest living relatives.
Yes, a remainder interest can be inherited by the designated beneficiary or beneficiaries named in the owner’s will or trust. If no beneficiaries are named, it will pass according to the laws of intestate succession.
Yes, a remainder interest can be used as collateral for a loan or mortgage. However, the lender may require the consent of any life tenants or other parties with an interest in the property.
In general, a remainder interest cannot be revoked or terminated unless there is a specific provision in the legal document creating the interest that allows for such revocation or termination.
If the property subject to a remainder interest is sold, the remainder interest will typically transfer to the new owner. The new owner will then hold the property subject to the rights of any life tenants or other parties with an interest in the property.
Yes, a remainder interest can be leased or rented out by the owner. However, the lease or rental agreement may need to consider the rights and interests of any life tenants or other parties with an interest in the property.
Yes, a remainder interest can be challenged in court under certain circumstances, such as if there is a dispute over the validity of the legal document creating the interest or if there are allegations of fraud or undue influence.
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: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/remainder-interest/
- Modern Language Association (MLA):Remainder Interest. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/remainder-interest/.
- Chicago Manual of Style (CMS):Remainder Interest. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/remainder-interest/ (accessed: May 09 2024).
- American Psychological Association (APA):Remainder Interest. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/remainder-interest/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts