A remainder is a future interest in real estate that is transferred to the transferee or remainderman under property law. The remainderman has the ability to possess the property at the natural end of a previous property formed by the same instrument. As a result, the preceding property must be one that can end naturally, such as when a period of years expires, or a life tenant passes away. A remainder must be included in the same instrument of conveyance (document, such as a deed) that gives the current interest to another person in order for it to be effective. A remainder is distinguished from a "reversion," which gives the title back to the grantor of the property (upon B's death, in the example) or to the grantor's descendants.
- A vested remainder is one that is owned by a specified individual and is subject only to the expiration of the preceding property interests;
- A contingent remainder is one for which the holder has not been identified or for which a condition prior must be met.
- For example, A grants her brother B the property deed for life, and upon B's death, the land deed to C, B's son, or C's offspring if he does not live. C holds a remainder, and his offspring will inherit a "contingent remainder" if C dies before the title passes.
[Last updated in April of 2022 by the Wex Definitions Team]