FUTURE INTERESTS IN THE TRANSFEREE A transferee can also receive a future interest. This occurs if the transfer is made to several sequential transferees or if the transferor places some condition to delay possession (e., “To A when he graduates”). There are two types of future interests that a transferee can have. Remainders A remainder is a future interest in one transferee which becomes possessory upon the natural expiration of a prior life estate held by another transferee.
Example: “To A for life, remainder to B,” A has a life estate and B has a vested remainder in fee simple, which becomes possessory when A dies. Remember that a remainder always follows a life estate. Vested vs. Contingent
There are two types of remainders. Vested A vested remainder is one that becomes possessory at the termination of the prior life estate and is subject to no other condition precedent.
Example: “To A for life, remainder to B.” B has a vested remainder in fee simple, which becomes possessory at A’s death. Once the transferee’s interest has vested, he is entitled to possession when the prior estate ends. There is no requirement that B must outlive
A. If B is dead, possession goes to his grantees, devisees, heirs, or even by escheat. A vested remainder can be lost only if it is subject to a condition subsequent (see executory interests). Contingent A contingent remainder is one that becomes possessory only at the termination of the prior life estate and the fulfillment of some other condition precedent.