There are two types of remainders in property law: vested and contingent. A vested remainder is held by a specific person without any conditions precedent; a contingent remainder is one for which the holder has not been identified, or for which a condition precedent must be satisfied.

What is a contingent remainder?

contingent remainder. n. an interest, particularly in real estate property, which will go to a person or entity only upon a certain set of circumstances existing at the time the title-holder dies. Examples of those potential circumstances include surviving one’s brother or still operating the family farm next door.

What is a vested remainder in real estate?

Vested remainders: remainders that are (1) created in a living, ascertainable person and (2) not subject to any condition precedent except the natural end of the prior estate.

What does vested remainder mean?

n. the absolute right to receive title after a presently-existing interest in real property terminates. A “vested remainder” is created by deed or by a decree of distribution of an estate given by will.

Can a contingent remainder follow a vested remainder?

In fact, we may state a rule that contingent remainders are always followed by a vested interest, a reversion being implied if no other vested interest is stated. There follow further examples of contingent remainders.

Can you convey a vested remainder?

A vested remainder is one where the grantee is an ascertainable person and the remainder is not subject to a condition precedent. In other words, the property will definitely be conveyed to the grantee, or the grantee’s estate, if the grantee dies before the conveyance.

Can you transfer a vested remainder?

Alienation: O’s interest is vested. This interest is never subject to the rule against perpetuities. O’s interest cannot be transferred inter vivos (“between living people”); can only be transferred by will or by intestate succession upon death of the grantor.

What follows a vested remainder subject to divestment?

A vested remainder is the absolute right to receive title when a presently existing interest in real property ends. … Vested remainders subject to (complete) divestment – “To A for life, then to B and his heirs, but if B marries Z, then to C and his heirs.” Based on a condition subsequent.

What are the three types of Defeasible fee simple estates?

Three types of defeasible estates are the fee simple determinable, the fee simple subject to an executory limitation or interest, and the fee simple subject to a condition subsequent.

What is vested remainder subject to open?

vested remainder subject to open (plural vested remainders subject to open) (law) A future interest held by a member of a class, for which the interest is certain to vest, but for which new members may enter the class before the interest vests, thereby reducing each member’s share of the total interest.

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What does remainder interest in property mean?

A remainder is a future interest in land. It is the right to own and possess the land after the fixed interest of current holder expires. … For example both “to A for life, then to B” and “to A for 10 years, then to B” give B a remainder. A person who has a remainder is called a remainderman.

What is a remainder title?

remainder. n. in real property law, the interest in real property that is left after another interest in the property ends, such as full title after a life estate (the right to use the property until one dies). A remainder must be created by a deed or will.

Can you have a contingent executory interest?

A contingent remainder is going to flow from the natural termination of the previous estate (as long as the condition is met). … The estate already exists and then if the condition subsequent occurs, the estate will terminate early and go to the person holding the executory interest.

What is the difference between an executory interest and a remainder?

A key difference between a remainder and an executory interest is that a remainder interest doesn’t take away the interests of a prior interest holder, while an executory interest can cut off the prior interest.

What follows a life estate?

A life estate grants the holder use of the estate for the duration of a life, often that of the tenant. At the end of the life, the estate will transfer to another by a reversion (if to the grantor) or remainder (if to another). … (A will have the land until death, then the estate will transfer to B).

What does defeasible fee estate mean?

What is fee simple defeasible? Fee simple defeasible is a legal term and type of property ownership, where the ownership is dependent on specific conditions. If the conditions of ownership are violated, the property may be returned to the grantor or to a specified third party.

What is the difference between a fee simple absolute estate and a defeasible fee simple estate?

The rules pertaining to the fee simple absolute are simple. The holder has absolute ownership; his or her ownership lasts forever unless the holder transfers it. … A defeasible fee is simply a fee simple interest in land that can be taken away from the holder by the occurrence or non-occurrence of a specified event.

What is a defeasible interest?

Where a person who has contracted for the purchase of goods has insured them, he has an insurable interest notwithstanding that he might, at his election, have rejected the goods or treated them as at the seller’s risk, by reason of the seller’s delay in making delivery or otherwise3. …

What is the meaning of rule against perpetuities?

A common law property rule that states that no interest in land is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.

What is a springing executory interest?

A future interest in property that will be triggered on the happening of a stated event. … An executory interest can be springing (meaning the previous interest was held by the grantor) or shifting (meaning the previous interest was held by someone other then the grantor).

Can a remainderman get a mortgage?

The remainderman gets the right to reside in the home, sell it, or mortgage it only after the death of the life tenant.

Is a remainder interest a gift?

Completed transfers of future interests, such as remainder interests in real estate or the vested right to the distribution of trust principal on the donor’s death, constitute gifts for tax purposes but do not qualify for the annual exclusion.

Can a remainderman mortgage a property?

As a life tenant, you may not easily sell or mortgage property with a life estate interest. The remaindermen must all agree if you decide to sell or borrow against the property. … It won’t allow the life tenant to sell the property, but it does give the life tenant more bargaining power with the remaindermen.

Can a Remainderman sell his interest?

Sale of the Property A remainderman may sell his interest in the property, but the buyer would take the property subject to the rights of life tenant. … If the life tenant and the remainderman both agree and sign transfer documents, the property can be sold before the life tenant dies.

What is the difference between springing and shifting executory interest?

Shifting executory interests go from one grantee to another upon the occurrence of some condition. Springing executory interests go from the grantor to a grantee upon the occurrence of some condition.