Definition - What does Remainder mean?

In property law, a remainder is the future interest in property that accrues to a party after another interest in the property ends. Because there is a high risk of dispute about who holds the remainder interest after the original interest ends, most courts require a remainder to be documented in a will or deed before they will honor the remainder.

Justipedia explains Remainder

There are two types of remainders: vested remainders and contingent remainders.

A remainder is a viable tool for someone who wants to grant an interest to one person for a certain period of time and then wants that interest to accrue to someone else when that time is up.

A situation in which a remainder might be used involves grandparents buying a condo in a college town where their grandchildren are going to attend college. The grandparents could grant an interest in the condo to the older grandchild to terminate upon that grandchild’s graduation, and then grant the younger grandchild a remainder in the condo.

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