An alternative contingent remainder occurs when the same property is subject to two contingent remainders with opposite conditions precedent such that one of them will always take effect.
A contingent remainder is a type of future interest granting the owner of the contingent remainder the right to possess certain property so long as a condition is fulfilled. For traditional contingent remainders, if this condition is not fulfilled, the property is never transferred, and ownership stays with its previous owner.
For example, if a father writes a grant that states “I give my house to my son, so long as he graduates from college by his 21st birthday” and the son chooses not to attend college until he is 25, then the condition is not met, and ownership of the house stays with the father.
For alternative contingent remainders, however, the house will always transfer from the parent’s possession because one of the two contingent remainders at play will always take effect. For example, if a father writes a grant that states “I give my house to my son, so long as he graduates from college by his 21st birthday, otherwise, to my brother,” then alternative contingent remainders exist. Regardless of whether the son graduates from college by his 21st birthday, the father will no longer own the property the day his son turns 21.
[Last updated in June of 2022 by the Wex Definitions Team]
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