What Is a Remainderman?

A remainderman is a property law term that refers to the person who inherits or is entitled to inherit property upon the termination of the life estate of the former owner. A life es🃏tate is an arrangement in✅ which a person’s ownership of property lasts for the duration of their life and is then transferred back to the original owner or a third party.

The perಌson to whom ownership of the property is transferred is the remainderman. In a trust account, a remainderman receives the principal remaining in the trust. However, this tr﷽ansaction only happens after all required expenses have been paid.

Rights of Possession

Once a trust has been completely dissolved, the remainderman may exercise the righ💖t to hold and use the property in the trust. For physical property, if t𓆉he owner of the property bequeaths a piece of property to Person A for life and then to Person B upon Person A’s death, Person B is the rightful owner of a future interest and the remainder. The life tenant is the owner of the property until they die.

Person B’s interest becomes active only upon Person A’s death. The remainderman will inherit the property upon the death or termination of the former owner’s estate. The property may also be inherited when there is a specific notation of the same in the trust. In 澳洲幸运5开奖号码历史查询:real estate ꦜdeal༒ings, all parties need to be aware that both the life tenant and the remainderman have ownership interests, despite each having different rights of possession.

The remainderman has an ownership interest in the property while the🎶 life tenant is alive, ensu🍸ring that the life tenant does not damage the property, diminish its value, encumber it, or attempt to sell it.

How a Life Estate Works

As opposed to a trust, a life estate deed is a vehicle by which the property owner, or the grantor, transfers legal ownership to another person or the life tenant. In many cases, the grantor and the life tenant are the same person, but not always. Typically, the deed will state that the occupant of the property is allowed to use it for the duration of their life. Almost all deeds creatingﷺ a life estate will also name a remainderman—the person or persons who get the property when the life tenant dies.

Life estates are often used to provide for another person's well-being, without granting ownership of the relevant property. For example, a deceased homeowner may bequeath the family home in a life estate to their spouse, but name their children as remaindermen. This arrangement ensures the spouse will continue to have a home, and that it will ultimately be inherited by their children.

A life estate deed can be used to pass property upon the life tenant's death without being part of the life tenant’s estate. The property does not have to go through probate. Any interest that the life tenant had in the property ended upon death and did not become a part of the life tenant’s estate.

Pros and Cons of a Life Estate

Example

A parent who wishes to leave the family home to their spouse and children may know that the spouse and children are likely to quarrel over a divided asset. The benefactor chooses to leave it to their spouse in a life estate: the spouse can continue living in the home until they die, but the children will ultimately inh𓄧erit the house.

Although a life estate is simpler than other bequests, it still requires some discussion with a lawyer to set up. After the appropriate consultations, the life estate needs only to be registered with a county recorder: there is no need to go through probate court.

This arrangement ensures that the spouse remains comfortable, but that the house ultimately stays in the family. The life tenant does not pay any rent, but they are also unable to sell the home and are responsible for any maintenance costs. When the spouse dies, the home passes to the remaindermen–in this case, the couple's children.

The Bottom Line

A remainderman is considered a beneficiary who inherits property after the termination of a life estate. They inherit any remaining property after the life tenant's death. A remainder interest is a future interest a person has in an asset and a remainderman cannot be removed from a life estate without their permission.