Definition
In property law, a Remainderman is a person who is entitled to inherit property upon the termination of the preceding estate. Most commonly, this occurs after the death of a life tenant—an individual who holds a “life estate” in the property. The remainderman holds a future interest in the property and will gain full possession and enjoyment of it once the life estate ends.
Examples
1. Estate Planning
A father transfers his estate to his daughter (life tenant) for her lifetime. Upon her death, the property will pass to his grandson (remainderman). The grandson holds a future interest and will acquire an actual interest in the property only when the life estate terminates.
2. Trusts
A trust is created with terms stating that the trust income is to be paid to an individual (life beneficiary) during their lifetime. After their death, the capital of the trust goes to a charity (remainderman). The charity holds a future interest in the trust assets.
Frequently Asked Questions (FAQ)
1. What rights does a remainderman have?
A remainderman cannot use or possess the property until the life tenant’s interest ends. However, they have a vested interest and can ensure that the property is being maintained.
2. Can a remainderman sell their interest in the property?
Yes, a remainderman can sell their future interest. However, the buyer will only take possession after the life tenant’s estate ends.
3. Does a remainderman have any tax responsibilities?
A remainderman may have tax responsibilities, such as capital gains tax, when they sell their interest or upon receiving the property.
4. Can the terms of a remainderman’s interest be changed?
In general, the terms defined in a legal document such as a will or trust are binding and can’t be altered unless by agreement of all parties involved or as stipulated by law.
5. What happens if a remainderman dies before the life tenant?
If a remainderman predeceases the life tenant, their interest usually passes to their heirs according to the terms of the governing document (will, trust) or intestate succession laws if not otherwise specified.
Related Terms
Life Tenant
A life tenant is an individual who holds a life estate in a property. They have the right to use and benefit from the property for their lifetime.
Life Estate
A life estate is an interest in property that lasts for the duration of an individual’s life. Upon their death, the property passes to another individual (remainderman) or reverts to the original grantor.
Future Interest
A future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property.
Vested Interest
Vested interest is the legal right, benefit, or privilege granted to a person, which cannot be taken away once it is established.
Estate Planning
Estate planning involves organizing the transfer of one’s assets and responsibilities during life and after death through the preparation of legal documents.
Online Resources
- Legal Dictionary: Law.com Dictionary
- Investopedia Articles: Estate Planning Definition
- Nolo’s Legal Encyclopedia: Life Estate FAQs
References
- Black’s Law Dictionary, 10th Edition (2014)
- “Estate Planning Basics” by Denis Clifford (Nolo, 2016)
- Internal Revenue Service (IRS) guidelines on estate taxes
- Restatement (Third) of Property: Wills and Other Donative Transfers (2003)
Suggested Books for Further Studies
- “Understanding Trusts and Estates” by Roger W. Andersen (LexisNexis)
- “Wills, Trusts, and Estates” by Jesse Dukeminier (Aspen Casebook Series)
- “Estate Planning Basics” by Denis Clifford (Nolo)
- “Principles of Wills, Trusts and Estates” by William M. McGovern Jr. and Sheldon F. Kurtz
- “Federal Taxation of Estates, Trusts and Gifts” by Ira Bloom, Donald F. Cady, and John N. Albers
