A remainder refers to a future interest in property that will be received by someone else 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 then to the friend’s children, the children’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 known) and contingent remainders (where the recipient depends on a condition, such as marriage). A remainder subject to open is a specific type of vested remainder where the property will be inherited by a group of individuals, such as all of a person’s children, with the possibility of additional members being added to the group in the future.
Remainder Vested Subject to Open is a future interest in property that is granted to a class of individuals whose membership may vary over time. Each member of the class is entitled to an equal share of the property. The class must have at least one member, but additional members can be added in the future. For instance, an example of this type of remainder would be “to A for their lifetime, and then equally to all of B’s children.” This type of remainder is considered vested because it is given to a specific person and is not contingent upon any conditions. However, it is subject to open because the exact individuals who will receive the property are not yet determined and can change over time. Other types of remainders include contingent remainders, which are subject to a condition or given to an unspecified person, defeasible remainders, which can be terminated if a certain condition occurs, indefeasible remainders, which are not subject to any subsequent conditions and the remainderman is guaranteed to acquire a present interest in the future, and cross-remainders, which arise when different parcels of land are given to multiple individuals and the remainders are vested in the surviving individuals. These examples help illustrate how Remainder Vested Subject to Open functions. In the example “to A for life, and then equally to all of B’s children,” the remainder is vested because it is given to a specific group of individuals (B’s children). However, it is subject to open because the exact number of individuals who will receive the property is not yet determined and can change over time if more children are born to B.
“Remainder vested subject to open” refers to a type of future interest in property where a group of individuals are named as beneficiaries, but the share of each beneficiary is not determined until a later date when the property is distributed.
A regular vested remainder specifies the exact share each beneficiary will receive, while a remainder vested subject to open allows for the possibility of additional beneficiaries being added in the future.
Yes, the beneficiaries of a remainder vested subject to open can be changed if the terms of the trust or will allow for it. This typically requires the consent of the original grantor or testator.
If a beneficiary dies before the property is distributed, their share will typically pass to their heirs or the contingent beneficiaries named in the trust or will.
In most cases, beneficiaries of a remainder vested subject to open can sell or transfer their interest in the property, subject to any restrictions or conditions set forth in the trust or will.
The share of each beneficiary in a remainder vested subject to open is typically determined at a later date, often when the property is distributed or when a specific event occurs, such as the death of a beneficiary.
Generally, beneficiaries of a remainder vested subject to open cannot demand their share of the property before the specified date or event mentioned in the trust or will.
The terms of a remainder vested subject to open can be modified if all parties involved, including the original grantor or testator and the beneficiaries, agree to the changes and follow the necessary legal procedures.
Yes, there may be tax implications associated with a remainder vested subject to open, such as estate taxes or gift taxes. It is advisable to consult with a tax professional or attorney to understand the specific tax consequences.
A remainder vested subject to open can be challenged in court if there are valid grounds, such as fraud, undue influence, or lack of capacity, but the success of such a challenge would depend on the specific circumstances and evidence presented.
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.
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