Definition
A remainder is an interest in an estate that becomes possessory when a preceding estate, typically a life estate or an estate for a term of years (leasehold), ends. It is distinct from a reversion, which returns to the grantor or their heirs. Remainders can be vested or contingent based on certain conditions.
Types of Remainder
- Vested Remainder: An interest given to a known person(s) with no conditions precedent. For example, “to John for life, then to Mary and her heirs.”
- Contingent Remainder: Depends on an uncertain event or unknown person. For example, “to John for life, then to Mary if she marries.”
Examples
- Example 1: In a will, “I leave Blackacre to my sister for her lifetime, and upon her death, the property goes to my nephew.” The nephew holds a remainder.
- Example 2: “To Jane for life, and then to Jane’s children.” Here, the remainder could be vested if Jane currently has children or contingent if she doesn’t yet.
Frequently Asked Questions
Q1: What distinguishes a remainder from a reversion? A: While both are future interests, a remainder goes to a third party upon the termination of the prior estate, whereas a reversion returns to the grantor or their heirs.
Q2: Can a remainder be sold or transferred? A: Yes, a vested remainder can usually be sold or transferred by the holder, just like other property interests.
Related Terms
- Life Estate: An estate that lasts for the lifetime of a specified person.
- Reversion: The return of property to the original grantor or their heirs when a temporary estate expires.
- Fee Simple: The greatest interest in a parcel of land that one can own, potentially infinite in duration.
- Leasehold: A user interest in land for a certain term or years (e.g., rental agreements).
Online Resources
- Investopedia on Remainder
- Legal Information Institute (LII) on Future Interest
Suggested Books
- Real Estate Law by Robert J. Aalberts and Charles J. Jacobus
- Understanding Property Law by John G. Sprankling
- The Law of Future Interests by C. Rufus Bunnell
Fundamentals of Remainder: Property Law Basics Quiz
### What is a remainder?
- [ ] Interest that returns to the original grantor upon the termination of the preceding estate.
- [x] Interest that becomes possessory upon the termination of a prior estate and is held by a third party.
- [ ] Both reversion and future interest held by the original grantor.
- [ ] A particular type of life estate.
> **Explanation:** A remainder is a future interest in an estate that vests in a third party when a preceding estate, usually a life estate or leasehold, ends.
### Which type of remainder depends on an uncertain event or unknown person?
- [ ] Vested Remainder
- [x] Contingent Remainder
- [ ] Fee Simple Remainder
- [ ] Reversionary Remainder
> **Explanation:** A contingent remainder depends on an event that may or may not happen, or it is given to an unknown person pending the existing estate ends.
### In which scenario would a vested remainder occur?
- [ ] "To Jane for life, then to Jane's children if they survive her."
- [ ] "To Bob for 10 years, then to the estate of Sue."
- [ ] "To John for life, and then to the eldest son of Jane."
- [x] "To Alice for life, then to Bob and his heirs."
> **Explanation:** A vested remainder is given to a specific person or persons without any condition precedent other than the termination of the preceding estate.
### What happens to an estate with a remainder if the life tenant dies?
- [ ] The property returns to the original owner automatically.
- [ ] The property escheats to the state.
- [x] The property passes to the remainderman.
- [ ] The property remains with the life tenant's estate indefinitely.
> **Explanation:** Upon the death of the life tenant, the estate becomes possessory in the remainderman as specified in the original grant.
### Which term describes the scenario where property returns to the grantor?
- [x] Reversion
- [ ] Contingent Remainder
- [ ] Vested Remainder
- [ ] Leasehold
> **Explanation:** A reversion is when property interests return to the grantor after the expiration of a temporary estate.
### Can a vested remainder be sold or transferred?
- [x] Yes, a vested remainder can be sold or transferred.
- [ ] No, it must stay until after the preceding estate.
- [ ] Yes, but only with the life tenant's permission.
- [ ] No, remainders are a non-transferrable interest.
> **Explanation:** Vested remainders can typically be sold or transferred similarly to other property interests.
### If a grant specifies an estate "for the term of 5 years," this is considered?
- [x] An estate for years
- [ ] A life estate
- [ ] A reversion
- [ ] A contingent remainder
> **Explanation:** An estate for years lasts for a fixed period as specified in the grant (e.g., lease terms).
### Who holds a remainder interest in property?
- [ ] The life tenant
- [ ] The grantor
- [ ] The remainderman
- [ ] The lessee
> **Explanation:** The remainderman has a future interest in the property and will take possession upon the end of the current estate.
### Which estate must terminate for a remainder to become possessory?
- [ ] Fee Simple Absolute
- [ ] Owner's principal residence
- [x] Life Estate or an Estate for Years
- [ ] The grantor's estate
> **Explanation:** Remainders become possessory after the end of a life estate or leasehold (estate for years).
### What is an example of a contingent remainder?
- [ ] "To Sam for life and then to Charles."
- [x] "To Lucy for life, then if Mary survives her, to Mary."
- [ ] "To Tom for 10 years, then to his heirs."
- [ ] "To Alice for life, then to Bob immediately."
> **Explanation:** A contingent remainder relies on an event (Mary surviving Lucy) which may or may not occur.
Thank you for delving into the essentials of remainder interests in property law. For further enrichment, refer to the suggested readings and take on more quizzes to deepen your understanding!
