Also known as: remainder interest · remainder
Written by attorneys · grounded in primary & secondary sources — see below
A future interest in real or personal property that becomes possessory upon the natural termination of a prior estate created by the same instrument. The interest is created in a third party rather than retained by the grantor.
Renata Russo contracted to sell her remainder interest in a family trust to Redline Automotive for a fraction of its value while under financial pressure. The court found the terms unconscionable at formation. It refused to enforce the sale but upheld the remainder of the overall transaction that did not involve the remainder interest.
Rosa Ruiz held an outright remainder interest in a trust created by her grandfather. After she became disabled, the trustee petitioned to convert the interest into a special needs trust. The court approved the modification because unanticipated circumstances made it necessary to preserve assets and fulfill the settlor's intent.
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Roger Ramirez contracted to sell his remainder interest in commercial property to Regal Apparel under terms that heavily favored the buyer. The court found the contract term unconscionable when executed. It severed the term and enforced the balance of the contract without the offending provision.
Raphael Rivera delivered a letter gifting his remainder interest in a painting to his son while retaining a life estate. The son accepted the gift. The court upheld the transfer because a remainder interest in personal property can pass by inter vivos gift even without immediate possession.
Rosalind Reed's will created a trust for a park with a racial restriction that later became unenforceable. The court held that the remainder interest reverted to the grantor's heirs rather than passing to the city. The failure of the trust purpose triggered the retained future interest.
Robert Rivera directed in his will that his home be destroyed after his death, leaving a remainder interest in the land to his children. The court refused to enforce the destruction clause because it violated public policy. The remainder interest passed to the children without the wasteful condition.
Yes. A donor may validly transfer a remainder interest in personal property by delivering a writing that manifests present intent to make a gift while retaining a life estate. The donee need not receive immediate possession for the gift to be complete.
A court may authorize the conversion when circumstances not anticipated by the settlor make the modification necessary to further the trust purposes and to preserve assets for a disabled beneficiary.
The interest reverts to the grantor's heirs or successors rather than passing to a third party when the trust fails. Courts apply state law that treats the retained future interest as a possibility of reverter exempt from certain restrictions.
Yes. Spendthrift provisions are generally valid and enforceable against creditors even when they apply to remainder interests, preventing creditors from reaching the property before distribution.
…Law has deprived them of any gainful use of their “air rights” above the Terminal and that, irrespective of the value of the remainder of their parcel, the city has “taken” their right to this superjacent airspace, thus entitling them to “just compensation” measured by the fair market value of these air rights. Apart from…