Vested remainders are a type of remainder in property law with an ascertained taker and without a condition precedent. In short, it is the right to receive property, without condition.
A remainder is a future interest where the possessory rights become effective upon the natural expiration of the preceding rights of possession. A remainder is vested if the recipient's identity is known when the right is created and if the remainder is not subject to any condition precedent. Specifically, at the time of the grant, the recipient must be a real, living human being.
There are various forms of vested remainders.
Indefeasibly vested remainders are those where the recipient is certain to become and remain possessory of the property, such as a fee simple absolute. Indefeasibly vested remainders can also expire naturally, such as a life estate.
Vested remainders subject to complete divestment are a form of vested remainders where the vested estate is subject to a condition subsequent that may completely divest the recipient of their interest in the estate.
- For example, O to B for life, then to A, then back to O if A writes a poem. In this grant, O has the possibility of a reverter because the possessory rights can revert back to O if A writes a poem. A has a vested remainder because A's identity is known at the time of the grant and because there are no preceding conditions that must be met for A and their heirs to receive the rights after B dies. However, the vested remainders are subject to complete divestment because if A writes a poem, A will lose all the property rights in the estate.
Vested remainders subject to open are a form of vested remainders where the vested interests are created in a class, and at least one member of the class is presently existing and identifiable. The class does not have to be closed at the time of grant.
- For example, O to A for life, then to A’s children, and A currently has one child A1. Here, the class is A’s children, and A1 is presently alive and identifiable. The rights are vested because the identity of one member of the class is known and because there are no other preceding conditions that must be met other than that one of A’s children exists and is alive. Over time, A could have more children, such as A2 and A3. They could also join A1 as members of the class.
Unlike contingent remainders, because the rights are already ascertained, vested remainders are not subject to the rule against perpetuities.
[Last updated in July of 2024 by the Wex Definitions Team]