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Remainder Interest

DEFINITION

An interest that refers to someone that has the right to the interest in the future. The interest may be created in a trust.

EXPLANATION

A remainder interest refers to an individual with an interest in an estate in the future. Such interest may be held in a trust that can only be accessed after a certain time period has passed, or an age has been reached. A party that holds a remainder interest is typically a family member of a party that owns real property. Upon the death of the originally owning party, the remainder interest will be granted the rights to the property.

Case Law As It Relates to Remainder Interest

Case Review: Osborne v. Osborne (1954)

The case, Osborne v. Osborne (1954) 42 Cal.2d 358., involved the son of a deceased father bringing legal action to quiet title to real property.

Merinoeth Osborne and his father, Thomas, drew up a deed provision that stated that Merinoeth would receive the real property called Lot 97 upon Thomas’ death. However, when Thomas died, Merinoeth’s stepmother, Louise Osborne, claimed the property belonged to her. Both Merinoeth and Louise filed for a quiet title on Lot 97.

The lower court’s ruling initially denied both parties’ requests for title to be quieted. However, the appellate court contended that because the deed for Lot 97 stipulated that it would transfer to Merinoeth upon Thomas’ death, Merinoeth had a remainder interest in the property. The court ruled in favor of Merinoeth.

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