A remainder is a form of future interest in property that is transferred to another individual after the current owner’s death or the termination of their ownership. For instance, if an individual grants their house to their friend for their lifetime, and subsequently to the friend’s daughter, the daughter’s stake in the house is considered a remainder. There are various types of remainders, including vested remainders (where the recipient of the property is already identified) and contingent remainders (where the recipient’s entitlement to the property is contingent upon a condition, such as getting married before the current owner’s demise).
A remainder is a future interest in a third person that takes effect after the natural termination of the preceding estate. For example, if a grant is made “to A for life, and then to B,” B’s future interest is considered a remainder. If there is only one preceding estate and the remainder becomes effective upon the expiration of that estate, it is also known as an executed estate. There are various types of remainders:
1. Vested remainder: This type of remainder is given to a specific person and is not subject to any conditions. For instance, “to A for life, and then to B.”
2. Contingent remainder: A contingent remainder is either given to an unspecified person or is subject to a condition that must be fulfiled. For example, “to A for life, and then, if B gets married before A’s death, to B.”
3. Defeasible remainder: A defeasible remainder is a vested remainder that can be terminated if a specific condition occurs. For instance, “to A for life, and then to B, but if B ever sells liquor on the land, then to C.”
4. Indefeasible remainder: This type of remainder is a vested remainder that is not subject to any conditions. For example, “to A for life, and then to B absolutely.”
5. Remainder subject to open: A remainder subject to open is a vested remainder that is given to a class of individuals whose numbers may change over time. Each member of the class is entitled to an equal share. For instance, “to A for life, and then equally to all of B’s children.”
6. Cross-remainder: A cross-remainder is a future interest that arises when specific estates are given to two or more individuals in different parcels of land or undivided shares of the same land, and the remainders of all the estates are made to vest in the surviving individual(s).
7. Charitable remainder: A charitable remainder is a remainder, typically from a life estate, that is given to a charitable organisation. For example, “to Jane for life, and then to the American Red Cross.”
Remainders can be created through a will or a deed, and they play a significant role in estate planning and property law.
“Remainder subject to partial divestment” refers to a legal concept where a person transfers ownership of a property but retains certain rights or interests in it, such as the right to receive income from the property or the right to use it for a specific period.
Partial divestment allows the transferor to retain some control or interest in the property while transferring ownership to another party. This can be achieved through various legal mechanisms, such as creating a trust or establishing specific conditions in the transfer agreement.
Partial divestment can provide flexibility and control to the transferor while still allowing them to transfer ownership of the property. It can be useful in situations where the transferor wants to ensure ongoing income or use of the property.
Yes, there may be certain legal limitations or restrictions on partial divestment depending on the jurisdiction and the specific circumstances. It is important to consult with a legal professional to ensure compliance with applicable laws and regulations.
In some cases, it may be possible to reverse or modify a partial divestment arrangement, but it would depend on the specific terms and conditions agreed upon during the initial transfer. Any modifications or reversals would typically require the consent of all parties involved.
After the partial divestment period ends, the property would typically be fully owned by the transferee, and the transferor’s rights or interests would cease to exist. The transferee would have complete control and ownership of the property.
Partial divestment can be used for various types of properties, including real estate, businesses, or other assets. However, the feasibility and specific requirements may vary depending on the nature of the property and applicable laws.
Yes, there may be tax implications associated with partial divestment, such as capital gains tax or income tax on any retained income from the property. It is advisable to consult with a tax professional to understand the specific tax consequences in your jurisdiction.
Like any legal arrangement, partial divestment can potentially be challenged or contested if there are grounds to do so, such as fraud, duress, or lack of capacity. It is important to ensure that the partial divestment is properly executed and documented to minimize the risk of challenges.
No, partial divestment and a life estate are different legal concepts. A life estate grants a person the right to use and enjoy a property for their lifetime, while partial divestment allows for the transfer of ownership while retaining certain rights or interests.
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-subject-to-partial-divestment/
- Modern Language Association (MLA):Remainder Subject To Partial Divestment. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/remainder-subject-to-partial-divestment/.
- Chicago Manual of Style (CMS):Remainder Subject To Partial Divestment. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/remainder-subject-to-partial-divestment/ (accessed: May 09 2024).
- American Psychological Association (APA):Remainder Subject To Partial Divestment. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/remainder-subject-to-partial-divestment/
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