A “remainderperson” is a legal term used in the context of property law and estate management. It refers to an individual who holds an interest in an estate, which becomes possessory after the termination of a preceding possessory interest. This interest can either be classified as vested or contingent.
Definition of Terms
Possessory Interest
A possessory interest refers to the right to occupy and use property.
Remainder
A remainder is an interest in an estate that takes effect in the future, upon the expiration of the current possessory interest.
Vested Remainder
A vested remainder is an interest that is guaranteed to become possessory in the future, provided the remainderman survives until the termination of the prior estate.
Contingent Remainder
A contingent remainder, on the other hand, becomes possessory only if certain conditions are met or certain events occur.
Historical Context
The concept of remainderpersons can be traced back to feudal England, where property and land rights were crucial elements of societal structure. The establishment of remaindermen ensured the orderly transfer and continuity of property ownership, thereby avoiding disputes and providing a clear line of succession.
Types of Remainders
Vested Remainders
Vested remainders are interests certain to become possessory in the future. For example:
- Vested indefeasibly: There are no conditions except the natural expiration of the prior interest.
- Vested subject to open: The class of beneficiaries can expand (e.g., an interest for children of B, which will include B’s children born in the future).
- Vested subject to complete divestment: The interest is vested but can be defeated if a certain condition occurs (e.g., an estate to B for life, then to C, but if C marries, to D).
Contingent Remainders
Contingent remainders depend on an event or condition being met. They are not guaranteed. For example:
- Condition precedent: Until a condition is met, the remainder cannot become possessory (e.g., an estate to B for life, then to C if C graduates college).
- Unascertained person: The interest belongs to a beneficiary not yet determined at the creation of the remainder (e.g., an estate to B for life, then to B’s heirs).
Special Considerations
Executor Interests
Executor interests relate to future interests that are not considered remainders. They can cut short the possessory estate if certain conditions occur.
Legal and Equitable Remainders
Remainders can be equitable or legal, determined by whether the interest is recognized by equity courts or common law courts.
Examples in Practice
Consider a scenario where a parent, A, owns an estate and grants a life estate to their child, B. Upon B’s death, the property is to transfer to C. In this case, C is the remainderperson, and their interest is contingent if C must meet certain conditions to inherit, or vested if C is certain to inherit upon B’s death.
Frequently Asked Questions
What rights does a remainderperson have during the current possessory estate?
A remainderperson does not have the right to possess or control the estate while the current possessory interest is in effect. Their rights become relevant only after the termination of the present interest.
Can a remainderperson sell their interest in the property?
Yes, a remainderperson can sell their interest, but it is subject to the existing possessory interest and the terms defined in the deed or will creating the remainder.
What happens if the contingent condition is not met?
If the contingent condition is not met, the interest does not become possessory, and another specified individual or entity may receive the estate, or it could revert to the original grantor or their heirs.
Related Terms
- Life Estate: An interest in property that lasts for the life of the holder.
- Fee Simple Absolute: The greatest interest in a parcel of land that one can possibly have.
- Reversion: The interest that remains with the grantor when a temporary estate is determined.
Summary
A remainderperson holds significant yet future interests in an estate, their rights and obligations becoming active after the current possessory interest concludes. Understanding the intricacies of vested and contingent remainders, along with their historical and legal context, is essential for navigating property law and estate planning effectively.
References:
- Dukeminier, J., & Krier, J. (2020). Property. Aspen Publishers.
- Blackstone, W. (1766). Commentaries on the Laws of England.
- Restatement (First) of Property (1936).
