remainder


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Remainder

A future interest held by one person in the real property of another that will take effect upon the expiration of the other property interests created at the same time as the future interest.

The law of real property permits a person who owns real estate to convey all or part of her rights in the property to another person or persons. Legal conveyances of property become more complicated when the person who owns the property, the grantor, gives a present interest (the right to the possession and use of the property) in the property to one person for either life or a set period of time, and also gives a future interest (also called a nonpossessory interest) in the property to another person. The future interest is called a remainder, and the holder of this interest is called the remainderman.

Remainders are subdivided into two principal categories: contingent remainders and vested remainders. A contingent remainder can be created in two different ways. First, it can be a remainder to a person not ascertained at the time the interest is created. For example, Tom owns Blackacre in fee simple, which means he owns it with no ownership limitations. While Bob and Jane are alive, Tom conveys Blackacre to Bob for life, with a remainder to the heirs of Jane. The heirs of Jane are not yet known, so they have a contingent remainder.

A remainder also will be classified as contingent, whether or not the remainderman is ascertained, where the possibility of becoming a present interest is subject not only to the expiration of the preceding property interest but also to some specific event occurring before the expiration of the preceding interest. This event is called a special condition precedent. For example, if Tom owns Blackacre in fee and conveys Blackacre to Bob for life and then to Jane if she marries Bill, then Jane has a contingent remainder in fee, conditioned on the death of Bob and the marriage to Bill.

A vested remainder is a future interest to an ascertained person, with the certainty or possibility of becoming a present interest subject only to the expiration of the preceding property interests. If Tom owns Blackacre in fee simple and conveys Blackacre to Bob for life and to Jane in fee simple, Jane has a vested remainder in fee that becomes a present interest upon the death of Bob. As a remainderman, she simply has to wait for Bob's death before assuming a present interest in Blackacre.

For a remainder to be effective, it must be contained in the same instrument of conveyance (document, such as a deed) that grants the present interest to another person.

Cross-references

Estate.

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. Example: Patricia Parent deeds Happy Acres Ranch to her sister, Sally for life, and upon Sally's death to Charla Childers, her daughter, or Charla's children if she does not survive. Charla has a remainder, and her children have a "contingent remainder," which they will receive if Charla dies before title passes. A remainder is distinguished from a "reversion," which gives title back to the grantor of the property (upon Sally's death, in the previous example) or to the grantor's descendants, and a reversion need not be spelled out in a deed or will, but can occur automatically by "operation of law." (See: title, deed, contingent remainder, vested remainder, reversion)

remainder

(Estate in property), noun estate, excess, expectancy, interest, property, residual estate, reversionary estate, surplus
Associated concepts: contingent remainder, vested remainder

remainder

(Remaining part), noun balance, excess, leftover, overplus, quod restat, reliquum, reeaining portion, remains, residuals, residue, residuum, rest, reversion, superfluity, surplus
See also: balance, complement, discard, dower, holdover, overage, residual, surplus

REMAINDER, estates. The remnant of an estate in lands or tenements expectant on a particular estate, created together with the same, at one time. Co. Litt. 143 a.
     2. Remainders are either vested or contingent. A vested remainder is one by which a present interest passes to the party. though to be enjoyed in future; and by which the estate is invariably fixed to remain to a determinate person, after the particular estate has been spent. Vide 2 Jo ins. R. 288; 1 Yeates, R. 340.
     3. A contingent remainder is one which is limited to take effect on an event or condition, which may never happen or be performed, or which may not happen or be performed till after the determination of the preceding particular estate; in which case such remainder never can take effect.
     4. According to Mr. Fearne, contingent remainders may properly be distinguished into four sorts. 1. Where the remainder depends entirely on a contingent determination of the preceding estate itself. 2. Where the contingency on which the remainder is to take effect, is independent of the determination of the preceding estate. 3. Where the condition upon which the remainder is limited, is certain in event, but the determination of the particular estate may happen before it. 4. Where the person, to whom the remainder is limited, is not yet ascertained, or not yet in being. Fearne, 5.
     5. The pupillary substitutions of the civil law somewhat resembled contingent remainders. 1 Brown's Civ. Law, 214, n.; Burr. 1623. Vide, generally, Viner's Ab. h.t.; Bac. Ab. h. t; Com. Dig. h.t.; 4 Kent, Com. 189; Yelv. 1, n.; Cruise, Dig. tit. 16; 1 Supp. to Ves. jr. 184; Bouv. Inst. Index, h.t.

References in periodicals archive ?
In addition to whole-number remainder calculations, the new calculator enables decimal remainder calculations, which are helpful in a wide range of situations.
The IRS issued a notice of deficiency, asserting that no deduction was allowed because the value of the charitable remainder interest did not equal at least 10% of the net FMV of the property contributed.
He proved that a non-locally compact topological group G has a remainder which is a p-space if and only if G is either a Lindelof p-space or a [sigma]-compact space.
Assuming that both gifts are deemed completed, we calculate the value of the life estate, and the remainder interest by using valuation tables and the current interest rate for the month in which the valuation date occurs.
At the time the property is given to the trust, the grantor can claim a current income tax deduction equal to the present value of the charity's remainder interest.
A charitable remainder trust (CRT) is a trust instrument that provides for specified payments to one or more individuals, with an irrevocable remainder interest in the trust property to be paid to or held for a charity.
2 : the number left after a subtraction <5 minus 3 leaves a remainder of 2.
Gifting a remainder interest requires the property ownership to be divided into two separate interests: a life estate and a remainder interest.
While charitable lead trusts (CLTs) first make a stream of payments to one or more charitable beneficiaries, then leave remaining trust assets to non-charitable beneficiaries, charitable remainder trusts (CRTs) do the opposite.
Those looking to shrink their real estate holdings, rather than trade into another property using tax-free methods of transfer such as a 1031 exchange, have identified charitable remainder trusts as a way to divest themselves of real estate without paying the capital gains tax while also simultaneously donating to a charity.
if a taxpayer elects to exclude gain from the sale or exchange of a remainder interest in the taxpayer's principal residence, the section 121 exclusion will not apply to a sale or exchange of any other interest in the residence that is sold or exchanged separately.
Of the total net income reported by charitable remainder annuity and unitrusts, net long-term capital gains was the largest component (83.