Vested Remainder Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Vested Remainder, written in plain English, along with examples of how it is used.

What is Vested Remainder?

(n) When a deed or trust is entered, the right to own and get benefited from that property can be limited for a particular period of time or happening of the events. If the trustier wishes so he can assign the right on the property, after such events, to be went to any other person. They are termed as vested remainder. For example if a trust is formed naming his mother as beneficiary ,and included that on death of his mother the property will go back to his wife, then wife is termed as vested remainder

History and Meaning of Vested Remainder

A vested remainder is a term used in property law to describe a future interest that is guaranteed to become possessory at some point, subject to specific terms or conditions. In simple terms, it means that a beneficiary has a present interest in the ownership of a property that will become theirs at some point in the future. A vested remainder is different from a contingent remainder, which is not guaranteed to become possessory.

This legal concept has its roots in English common law and was used to distinguish between present and future interests in land. Over time, it has been incorporated into the legal systems of many other countries, including the United States.

Examples of Vested Remainder

  1. John sets up a trust that entitles his daughter, Mary, to ownership of his house after his death. However, John also stipulates that if Mary dies before him, ownership of the house will pass to his son, Tom. In this case, Tom has a vested remainder in the property, as his ownership is guaranteed to become possessory at some point.

  2. Sarah establishes a trust that entitles her husband, Mike, to receive income from an investment property. On Mike's death, ownership of the property will pass to their children, Jane and David. In this scenario, Jane and David have a vested remainder in the property, as they are guaranteed to become owners at some point.

  3. Emily creates a trust that provides for her sister, Lucy, to receive income from a rental property for the rest of her life. On Lucy's death, ownership of the property will pass to Emily's niece, Rachel. In this case, Rachel has a vested remainder in the property, as her ownership is guaranteed to become possessory at some point.

Legal Terms Similar to Vested Remainder

  1. Contingent Remainder: A future interest in a property that is not guaranteed to become possessory.
  2. Executory Interest: A future interest in a property that will only become possessory if a particular condition is met.
  3. Life Estate: An interest in a property that entitles an individual to use and benefit from the property during their lifetime.