Remainder is a future interest created when a grantor conveys an inherently limited possessory estate and, in the same conveyance, conveys the future interest to a second grantee.
Remainders can be vested or contingent.
A vested remainder is certain to become possessory to an ascertained person according to the words creating the remainder by merely waiting until the prior life estate ends.
A contingent remainder is one
- with a condition precedent before the remainder-holder can take possession or
- one that is given to an unascertained person.
A condition precedent means that something has to happen before the remainder-holder can take possession.
It's like being subject to a condition subsequent, but backwards. Something has to happen before the natural termination of the preceding estate.
e.g. O to A for life, then to B if B has reached 25 years old.
Contingent interests occur naturally at the end of the previous interest as long as the condition is met.
If a remainder first just says to someone (to B, but if B does not survive A...), it is a vested interest subject to divestment. If a remainder put the condition in the same clause (to B if B survives A), it is a contingent interest.
- If anything has to be done first, such as kids being born or people surviving, it is contingent, not vested.
Vested remainders are descendable. Contingent remainders are not.