Vested and Contingent Remainders

Question 1

A VESTED REMAINDER

Answer 1

…is one in which the remainderman’s right to immediate possession is without pre-conditions (except expiration of the the prior estate).

Question 2

“to A for life, remainder to B and his heirs”

Answer 2

A VESTED REMAINDER

Question 3

A CONTINGENT REMAINDER

Answer 3

A CONTINGENT REMAINDER is one in which the remainderman’s right to immediate possession is subject to a condition precedent [pree-SEE-dent].

Question 4

“to A for life, remainder to B and her heirs if B marries C.”

Answer 4

A CONTINGENT REMAINDER

Question 5

There are 3 basic ways that a remainder can be “contingent.”

A remainder is contingent if it is:

Answer 5

1. Subject to occurrence of some stated event - “… remainder to B and her heirs if B marries C”
2. Conveyed to unascertained persons – “… remainder to B’s first child to reach age 21, and his or her heirs”
3. Conveyed to unborn persons – “… remainder to B’s next born child and his or her heirs”

Question 6

“… remainder to B and her heirs if B marries C”

Answer 6

“contingent.”

Question 7

“… remainder to B’s first child to reach age 21, and his or her heirs”

Answer 7

“contingent.”

Question 8

“… remainder to B’s next born child and his or her heirs

Answer 8

“contingent.”

Question 9

DEFINITION of a VESTED REMAINDER (long-form):

Answer 9

A remainder is vested if the remainderman is:

(a) born and
(b) ascertained, and
(c) no (stated) event need occur before possession (except expiration of the prior, particular estate).

Question 10

DEFINITION of a CONTINGENT REMAINDER:

Answer 10

A remainder is contingent if any of the following applies:

1. a stated event must occur before possession
2. it is to unascertained persons
3. it is to unborn persons

Thus, whenever the:

unascertained become ascertained, or
the unborn are born, or
the stated event occurs
the contingent remainder becomes vested.

Question 11

In addition to the basic distinction between:

vested remainders, and
contingent remainders

there are also various subcategories of vested remainders:

Answer 11

indefeasibly vested,
vested subject to divestment, and
vested subject to open

Of the distinctions among vested remainders, perhaps the most important is the difference between:

indefeasibly vested remainders, and
vested remainders subject to divestment

Question 12

As you’ve probably gathered by now, one main issue surrounding “vested remainders subject to divestment” is how to distinguish them from contingent remainders.

Answer 12

The “official” difference is shown in the table.

Contingent: Condition Precedent
“It will be yours if so-and-so occurs”

Vested Subject to Divestment: Condition Subsequent
“It’s yours, but you’ll lose it if so-and-so occurs”

Question 13

Do the following conveyances create a vested or contingent remainders in C?

“to B for life, then to C and her heirs, but if C dies childless, then to D and her heirs”

Answer 13

The answer is vested. This conveyance creates a remainder to a person who is born and ascertained and there is no “stated event” condition precedent to possession by the remainderman (except expiration of the prior estate).

The condition on this remainder is a condition subsequent. The words of conveyance grant the remainder to C without pre-condition, but then set up an after-the-fact condition that can later cut off her rights, in favor of D.

Question 14

Do the following conveyances create a vested or contingent remainders in C?

“to B for life, then to C and his heirs if C goes straight to college after high school, otherwise to D and her heirs”

Answer 14

The words of conveyance set up a pre-condition that must be met before C can have a right to immediate possession, thus giving him a contingent remainder. In fact, this conveyance creates two contingent remainders, sometimes referred to as “alternative contingent remainders.”

The non-occurrence of the stated event for C’s condition precedent is worded to be also the occurrence of the stated event for D’s condition precedent.

Question 15

Do the following conveyances create a vested or contingent remainders in C?

“to B for life, then to C and his heirs, but if C predeceases B, then to D and her heirs”

Answer 15

The answer is vested. C’s remainder bears none of the earmarks of a contingent remainder (unborn; unascertained; pre-conditional stated event). So it’s vested, but subject to divestment.

The condition on this remainder is a condition subsequent. The words of conveyance grant the remainder to C without pre-condition, but then set up an after-the-fact condition that can later cut off his rights, in favor of D.

Question 16

Do the following conveyances create a vested or contingent remainders in C?

“to B for life, then to C and his heirs so long as the land is used for agricultural purposes”

Answer 16

Here again, C’s remainder bears none of the earmarks of a contingent remainder (unborn; unascertained; pre-conditional stated event). It’s vested, but subject to defeasance, though it will be defeased by expiration, not by divestment.

Actually, there’s no condition on this remainder at all, but rather a limitation – to be exact, a special limitation. So, what C has here is a remainder in fee simple on special limitation, more commonly known as a fee simple determinable.

Question 17

“to B for life, then to C and her heirs”

Answer 17

VESTED REMAINDER

Question 18

“to B for 10 years, then to C and his heirs”

Answer 18

VESTED REMAINDER

Question 19

“to B for life, then to C’s eldest child, Nancy, and her heirs”

Answer 19

VESTED REMAINDER

Question 20

“to B for life, then to C for life”

Answer 20

VESTED REMAINDER

Question 21

“to B for life, then to C’s heirs”

Answer 21

CONTINGENT REMAINDERS

Question 22

“to B for life and then, if C survives B, to C and his heirs”

Answer 22

CONTINGENT REMAINDERS

Question 23

“to my wife, Sarah, for life, then to my first grandchild”

Answer 23

CONTINGENT REMAINDERS

Question 24

“to B for life, then to C’s heirs”

Answer 24

The answer is contingent. As a living person, C has no heirs–only heirs apparent. (No one is the heir of a living person).

Of course, if C dies before the end of B’s life estate, C’s heirs will thereupon be definitively ascertained, and C’s actual heirs will than have a vested remainder from that point on.

Question 25

A remainder can be vested and yet be “subject to divestment,” which means that it can be “cut short” if a stated event occurs.

1 - 3

Answer 25

1. Here there’s no “condition precedent” – no pre-condition – to B’s right to possession, so B’s remainder is vested.
2. There is, however, a condition under which B’s vested remainder can be cut off. It’s a “condition subsequent.”
3. Because the condition subsequent can cut off B’s vested remainder, we say the remainder is VESTED SUBJECT TO DIVESTMENT.

Question 26

“to A for life, remainder to B and his heirs, but if B does not reach the age of 21, then to C and his heirs.”

Answer 26

VESTED SUBJECT TO DIVESTMENT

Question 27

For a remainder to be VESTED SUBJECT TO DIVESTMENT it must first… Second…

Answer 27

…of course, be vested. (i.e., given to a person who is born, is ascertained and can take without pre-conditions).

Secondly, the remainderman’s future right to possess, though vested, must be subject to being cut off if some stated event (a condition subsequent) occurs.

Question 28

“to B for life, then to C and his heirs, but if C dies before B, then to D and her heirs”

Answer 28

VESTED SUBJECT TO DIVESTMENT

Question 29

“to B for life, then to C and his heirs, but if C dies childless, then to D and her heirs”

Answer 29

VESTED SUBJECT TO DIVESTMENT

Question 30

O conveyed Greenacre “to B for life, then to C and his heirs, but if C dies before B, then to D and her heirs”

and Blueacre “to B for life, then to C and his heirs, but if C dies childless, then to D and her heirs”

C’s remainder in each case is in FEE SIMPLE ON EXECUTORY LIMITATION.

D’s interest in each case is called a(n): “_________ ________.”

Answer 30

The answer is *“executory interest.” D is not the grantor, so D’s interest can’t be a reversionary interest or right of re-entry. C has a fee simple, so D’s interest can’t be a remainder. *(A remainder can never directly follow a fee simple.)

Indeed, D has a classic *“shifting”-type executory interest, and C’s remainder is VESTED SUBJECT TO DIVESTMENT – in this case, a fee simple on executory limitation.

Question 31

Remainders are designated as VESTED SUBJECT TO OPEN when they are… (1 - 3)

Answer 31

1. to a class of recipients (e.g., “remainder to my children”), and
2. at least one member of the class is born and ascertained, and
3. other members may be added to the class later.

Question 32

“to B for life, remainder to B’s children and their heirs”

Answer 32

VESTED SUBJECT TO OPEN