A contingent remainderman's interest under an irrevocable trust: More than a mere expectancy

Charles E. Rounds, Jr.

A contingent equitable remainder-in-corpus incident to an ongoing irrevocable trust relationship is more than a mere expectancy. The holder of such a remainder will have the requisite standing to seek judicial enforcement of the trust’s terms and/or redress for breaches of trust. This is the case even when someone else is the current beneficiary. Here is why: When the trust became irrevocable, the holder received an enforceable present “vested” equitable property right in a contingent equitable property interest, this though the interest itself may never actually vest, i.e., become possessory, in the particular holder. A contingent interest is subject to a condition precedent, such as survivorship. In Estate of Davis, 469 P.3d 16 (Idaho 2020), the trial court had deemed such a remainder a mere expectancy, a costly misapprehension of a core principle of the Anglo-American legal tradition, costly particularly for the innocent owners of those property rights. On the other hand, in the case of a trust that is currently revocable, the rights, duties, and obligations of the parties to the relationship are quite different, a topic that is taken up generally in §8.11 of Loring and Rounds: A Trustee’s Handbook (2021), which section is reproduced in its entirety in the Appendix below.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

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Charles E. Rounds, Jr.

Suffolk University Law School on:

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