Ownership of real property - Remainders, vested and continge...

Learning Outcomes

This article explains remainders in real property, including:

• How to recognize when a future interest is a remainder rather than an executory interest, reversion, or other grantor’s future interest, using common bar-exam conveyances and language cues such as “then to” versus “but if.”
• How to distinguish vested from contingent remainders, classify indefeasibly vested remainders, vested remainders subject to open, and vested remainders subject to total divestment, and spot the conditions precedent or subsequent that change that classification.
• How to analyze contingent remainders created in unascertained persons or made subject to express conditions, determine the existence of any reversion in the grantor, and evaluate whether the contingency is likely to be tested with a Rule Against Perpetuities twist.
• How class gifts operate, when a class opens and closes under the rule of convenience, how class remainders interact with the Rule Against Perpetuities, and how examiners exploit age contingencies and “all-or-nothing” RAP invalidity in multiple-choice options.
• How remainders affect conveyancing and marketable title, including when unborn or unascertained remaindermen prevent a life tenant and existing remaindermen from delivering good fee simple title, and how those facts typically appear in MBE-style questions.

MBE Syllabus

For the MBE, you are required to understand the classification and consequences of future interests in land, with a focus on the following syllabus points:

• Distinguishing present estates from future interests and identifying remainders.
• Differentiating vested remainders (including their subtypes) from contingent remainders.
• Recognizing class gifts, including when the class opens and closes and how the rule of convenience works.
• Applying the Rule Against Perpetuities (RAP) to contingent remainders and vested remainders subject to open.
• Distinguishing remainders from executory interests and from the grantor’s reversion.
• Understanding how outstanding remainders affect marketable title and the ability to convey good title.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is a contingent remainder?
   1. "To A for life, then to B."
   2. "To A for life, then to B if B survives A."
   3. "To A for life, then to B's children."
   4. "To A for life, then to B and her heirs, but if B dies before A, to C."
2. What is the effect of the Rule Against Perpetuities on a remainder to "A's children who reach 30" if A is alive and has one child aged 5?
   1. The remainder is valid.
   2. The remainder is void.
   3. The remainder is vested.
   4. The remainder is a reversion.
3. Which of the following best describes a vested remainder subject to open?
   1. A remainder to a single ascertained person.
   2. A remainder to a class where at least one member is ascertained, but the class may expand.
   3. A remainder subject to a condition precedent.
   4. A remainder that divests a prior estate before its natural expiration.

Introduction

Remainders are a type of future interest in real property that become possessory, if at all, upon the natural termination of a prior estate, usually a life estate. Understanding the distinction between vested and contingent remainders is essential for MBE questions on conveyancing, marketable title, and the Rule Against Perpetuities.

Key Term: Future Interest
A non‑possessory property interest that gives its holder a right to, or possibility of, possession in the future, rather than an immediate right to possess.

Key Term: Remainder
A future interest created in a transferee that becomes possessory, if at all, upon the natural expiration of a prior estate, and does not cut short the prior estate.

Key Term: Reversion
A future interest retained by the grantor when the grantor conveys less than the entire estate they own, and does not give the entire future interest to another person.

A remainder must:

• Be created in someone other than the grantor (a transferee).
• Follow a present estate of known, finite duration (typically a life estate or term of years).
• Become possessory, if ever, only when that prior estate naturally ends (not by forfeiture or being cut short).

If the future interest instead divests a prior estate before its natural end, or follows a defeasible fee and springs into possession upon breach of a condition, it is not a remainder; it is an executory interest.

Key Term: Executory Interest
A future interest in a transferee that divests or cuts short a prior interest, or that springs out of the grantor at a future time, instead of waiting for a prior estate to end naturally.

Types of Remainders

Remainders are classified as either vested or contingent, depending on the certainty of the person(s) who will take and the certainty of their right to possession.

Vested Remainders

A remainder is vested if it is given to an ascertained person and is not subject to any condition precedent other than the natural termination of the prior estate.

Key Term: Vested Remainder
A remainder given to an identified person or persons, not subject to a condition precedent, and certain to become possessory upon the end of the prior estate.

There are three main types of vested remainders:

• Indefeasibly vested remainder
• Vested remainder subject to open
• Vested remainder subject to total divestment

Each has distinct language patterns that the MBE likes to test.

Indefeasibly Vested Remainder

Key Term: Indefeasibly Vested Remainder
A remainder that is vested in an ascertained person, is not subject to any condition, and is not subject to being diminished or divested.

Example:
“O to A for life, then to B and her heirs.”

• A has a life estate.
• B has an indefeasibly vested remainder in fee simple.
  Nothing can prevent B (or B’s successors) from taking when A dies.

This is the simplest vested remainder. On the exam, look for:

• A named remainderman, and
• No “if,” “provided that,” or “but if” clauses attached to B’s interest.

Vested Remainder Subject to Open (a.k.a. subject to partial divestment)

Key Term: Vested Remainder Subject to Open
A vested remainder given to a class of persons where at least one member is ascertained and can take, but the class may increase with additional members.

This arises with class gifts—typically “children,” “grandchildren,” or similar groups.

Key Term: Class Gift
A gift to a group of persons described by a characteristic (e.g., “children”), where the group’s membership can change over time.

Example:
“O to A for life, then to A’s children.” A is alive and has one child, C.

• A has a life estate.
• C has a vested remainder subject to open (class = A’s children).
• Any later‑born children of A will share the remainder; C’s share can be partially divested, but someone in the class is guaranteed to take when A dies.

Because the class can gain members until it closes, this interest is “vested but subject to open.”

Key Term: Closing of the Class
The point at which no additional persons can join a class gift.

Key Term: Rule of Convenience
The principle that a class gift closes when any member of the class is entitled to immediate possession, unless the grantor clearly states otherwise.

Under the rule of convenience:

• If a class remainder follows a life estate, the class closes when the life tenant dies and at least one class member is entitled to possession.
• Children born after that time are excluded, unless the instrument clearly allows otherwise.

MBE trap: Even after the class closes for purposes of distribution, RAP analysis treats later births as possible unless the class is naturally closed (e.g., “T’s children” after T’s death).

Vested Remainder Subject to Total Divestment

Key Term: Condition Subsequent
A condition that can divest an already‑vested interest if it occurs.

Key Term: Vested Remainder Subject to Total Divestment
A vested remainder in an ascertained person that is subject to a condition subsequent that may completely divest the interest.

Example:
“O to A for life, then to B and her heirs, but if B fails to survive A, then to C and her heirs.”

• A has a life estate.
• B has a vested remainder in fee simple subject to total divestment (B is known now and would take if A died immediately, but could lose it if she predeceases A).
• C has a shifting executory interest that will divest B if B dies before A.

The form of the condition matters:

• “Then to B if B survives A” → B’s remainder is contingent (the survival is a condition precedent).
• “Then to B, but if B fails to survive A, to C” → B’s remainder is vested subject to total divestment (survival is a condition subsequent that can cut off B’s vested interest).

The MBE often tests this distinction.

Contingent Remainders

A remainder is contingent if it is either given to an unascertained person or is subject to a condition precedent (other than the natural termination of the prior estate).

Key Term: Condition Precedent
A condition that must be satisfied before a remainder holder is entitled to take possession.

Key Term: Contingent Remainder
A remainder given to an unascertained person or subject to a condition precedent that must be satisfied before it becomes possessory.

Contingent remainders often arise in two situations:

• The remainder is given to a person not yet born or not yet identified (e.g., “to A for life, then to A’s first child,” when A has no children).
• The remainder is subject to a condition precedent (e.g., “to A for life, then to B if B survives A”).

In both cases, there is uncertainty either about who will take or whether anyone will take.

If the remainder is contingent, the grantor ordinarily retains a reversion that will take if the contingency fails.

Class Gifts and the Rule of Convenience

When a remainder is given to a class (e.g., “to A for life, then to A’s children”), special rules apply.

The class closes when any member is entitled to possession, unless the grantor clearly states otherwise. This is known as the rule of convenience.

Key Term: Rule of Convenience
The principle that a class gift closes when any member of the class is entitled to immediate possession, preventing later‑born members from sharing unless the grantor specifies otherwise.

Basic pattern:

• Deed: “O to A for life, then to A’s children.” A has two children, C and D, when A dies; A cannot have more children. The class closes at A’s death; C and D take.
• Will: “To A for life, then to my grandchildren.” The class normally closes at testator’s death if at that moment a grandchild is entitled to possession, or at the natural termination of the prior estate when the first grandchild would be entitled.

On the MBE, be ready to:

• Distinguish whether the class is open (possible new members) or closed (no new members can join).
• Apply the rule of convenience for purposes of who actually shares, but remember that for RAP analysis the exam often treats additional births as possible unless logically impossible.

The Rule Against Perpetuities and Remainders

The Rule Against Perpetuities (RAP) applies to:

• Contingent remainders.
• Vested remainders subject to open (class gifts).
• Executory interests.

It does not apply to the grantor’s own future interests (e.g., reversion, possibility of reverter, right of entry).

Key Term: Rule Against Perpetuities
No interest is valid unless it must vest, if at all, no later than 21 years after the death of some life in being at the creation of the interest.

If there is any possibility that a remainder might vest outside the perpetuities period, it is void from the outset.

Key RAP points for remainders:

• Age contingencies greater than 21 in class gifts are dangerous (“children who reach 25,” “grandchildren who reach 30”).
• For a class gift, the “all‑or‑nothing” rule applies at common law: if the gift is invalid as to any possible class member, it is void for all.

Exam pattern: “To A for life, then to A’s children who reach 25.” A is alive with one child age 5. A can have more children; some child might turn 25 more than 21 years after A’s death. The entire remainder to “children who reach 25” is void under RAP.

Many jurisdictions have reformed RAP statutes, but the MBE generally expects you to apply the traditional common‑law rule unless the question explicitly states otherwise.

Distinguishing Remainders from Other Future Interests

Remainders must follow a life estate or term of years and cannot cut short the prior estate. If a future interest divests or cuts short a prior estate, it is an executory interest, not a remainder.

Key Term: Shifting Executory Interest
An executory interest that divests a transferee (another grantee).

Key Term: Springing Executory Interest
An executory interest that divests the grantor or arises after a gap in possession.

Examples:

• “O to A for life, then to B if B survives A.”
  B holds a contingent remainder (condition precedent of survival).

• “O to A for life, then to B, but if B fails to survive A, to C.”
  B has a vested remainder subject to total divestment; C has a shifting executory interest.

• “O to A, but if the property is ever used for commercial purposes, then to B.”
  A has a fee simple subject to an executory interest; B has a shifting executory interest. There is no remainder because the interest in B cuts short A’s estate on a condition.

• “O to A, beginning one year from today.”
  A has a springing executory interest; O keeps a fee simple subject to an executory interest until A’s interest springs into possession.

Key Term: Fee Simple Subject to an Executory Interest
A fee simple that, upon the happening of a specified condition, is automatically divested in favor of a third party holding an executory interest.

On the exam, ask:

1. Does the future interest wait for a prior estate to end naturally? → Remainder.
2. Or does it cut off an earlier interest or arise after a gap? → Executory interest.

Also remember: if the conveyance leaves some future interest in the grantor (for example, because the remainder is contingent and may never vest), that interest is a reversion.

Consequences for Conveyancing and Marketable Title

Outstanding remainders affect the ability to convey good, marketable title.

Key Term: Marketable Title
Title reasonably free from doubt and the risk of future litigation, such that a reasonable buyer would accept it.

If there are possible future owners who are not yet in existence or not yet identified (e.g., unborn members of a class), they are not before the court and cannot sign away their interests. Because of that:

• A life tenant and all known vested remaindermen cannot necessarily combine to convey fee simple title if there is a possibility of further class members.

Example (adapted from classic outlines):
“O conveys ‘to A for life, remainder to B’s children.’” At the time of the conveyance, B has one child, C.

• A has a life estate.
• C has a vested remainder subject to open (class = B’s children).
• B could have more children.

A and C together cannot convey marketable fee simple title because any afterborn child of B would not be bound and could later claim a share.

This is a favored MBE angle: ask whether a buyer can obtain clear title when unborn remaindermen are possible.

Worked Example 1.1

O conveys "to A for life, then to B if B survives A." At the time of the conveyance, both A and B are alive.

Question: What type of remainder does B hold?

Answer:
B holds a contingent remainder. B is ascertained, but B’s right to possession depends on a condition precedent: surviving A. If B dies before A, B (or B’s successors) never take, and O (or O’s successors) will take by reversion.

Worked Example 1.2

O conveys "to A for life, then to A's children who reach 25." At the time of the conveyance, A is alive and has one child, C, aged 5.

Question: Is the remainder to A's children who reach 25 valid under the Rule Against Perpetuities?

Answer:
No. The remainder is void under RAP. It is possible that A could have another child after the conveyance and that child might not reach 25 until more than 21 years after A's death. Because there is a possibility that the class gift might vest too remotely, the entire remainder to “A’s children who reach 25” is void from the outset.

Worked Example 1.3

O conveys "to A for life, then to B's children." At the time of the conveyance, B has one child, D.

Question: What type of remainder do B's children hold?

Answer:
B's children hold a vested remainder subject to open. D is ascertained and would take immediately if A died now, so the remainder is vested. However, the class (B's children) may expand if B has more children before A's death; later‑born children will share, partially divesting D’s share.

Worked Example 1.4

O conveys "to A for life, then to B, but if B ever marries, then to C." A, B, and C are all alive and unmarried when O conveys.

Question: How are B and C’s interests classified?

Answer:
B has a vested remainder in fee simple subject to total divestment (sometimes called a vested remainder subject to an executory limitation). B is ascertained and would take if A died immediately, but B’s fee simple can be completely divested if B marries. C has a shifting executory interest that will divest B’s estate if B marries.

Worked Example 1.5

O conveys “to A for life, then to A’s children.” At the time of the conveyance, A has two children, C and D. After the conveyance, A has a third child, E. Then A dies.

Question: Who takes the remainder, and what is the effect of the rule of convenience?

Answer:
At the time of conveyance, C and D each had a vested remainder subject to open, because A might have more children. When A later has E, E joins the open class; C, D, and E each hold an undivided one‑third vested remainder. When A dies, the rule of convenience closes the class (no more children can now be born to A), and C, D, and E each take a one‑third possessory fee simple.

Worked Example 1.6

O conveys “to A for life, then to B if B graduates from law school.” At the time of the conveyance, A is alive and B is in college.

Question: What future interests are created?

Answer:
A has a life estate. B has a contingent remainder in fee simple because B must satisfy a condition precedent—graduating from law school—before taking. O holds a reversion in fee simple that will become possessory if B has not graduated by the time A’s life estate ends.

Exam Warning

Be careful: If a remainder is subject to a condition precedent or is given to an unascertained person, it is contingent—even if it seems likely to vest. Always check for conditions and ascertainability, and pay close attention to whether survival or some other requirement is drafted as an “if” (condition precedent) or “but if” (condition subsequent).

Revision Tip

When classifying a remainder, ask:
(1) Is the person ascertained?
(2) Is there any condition that must be satisfied before they can take possession?
If the taker is unascertained or there is a condition precedent, the remainder is contingent. If the taker is ascertained and there is no condition precedent (only possible conditions subsequent), the remainder is vested.

Key Point Checklist

This article has covered the following key knowledge points:

• Remainders are future interests created in transferees that become possessory upon the natural termination of a prior estate and do not cut short that estate.
• A remainder must follow a life estate or term of years; if it follows a defeasible fee and cuts it short, it is an executory interest instead.
• Vested remainders are given to ascertained persons and are not subject to any condition precedent; they may be indefeasibly vested, subject to open, or subject to total divestment.
• Contingent remainders are given to unascertained persons or are subject to a condition precedent; the grantor typically retains a reversion to cover the possibility that the contingency fails.
• Class gifts create remainders for groups such as “children” or “grandchildren”; they raise issues about when the class opens and closes and about the “all‑or‑nothing” RAP rule.
• The rule of convenience closes a class gift when any class member is entitled to immediate possession, unless the grantor clearly indicates a different intent.
• The Rule Against Perpetuities applies to contingent remainders, vested remainders subject to open, and executory interests; if an interest might vest too remotely, it is void from the outset.
• Remainders must be distinguished from executory interests and reversions for both classification and RAP purposes.
• Outstanding contingent or class remainders in unborn or unascertained persons can prevent a life tenant and existing remaindermen from conveying marketable fee simple title.

Key Terms and Concepts

• Future Interest
• Remainder
• Reversion
• Vested Remainder
• Indefeasibly Vested Remainder
• Vested Remainder Subject to Open
• Vested Remainder Subject to Total Divestment
• Condition Precedent
• Condition Subsequent
• Contingent Remainder
• Class Gift
• Closing of the Class
• Rule of Convenience
• Rule Against Perpetuities
• Executory Interest
• Shifting Executory Interest
• Springing Executory Interest
• Fee Simple Subject to an Executory Interest
• Marketable Title