Also known as: subject to defeasance · defeasible · defeasance
Written by attorneys — see sources below.
A future interest that has vested in a designated person but remains liable to complete termination upon the happening of a stated condition. The interest carries all incidents of ownership until the condition occurs and the divestment takes effect.
Stella Shapiro conveyed her ranch to her son Simon for life, remainder to his daughter Sabrina if she never sells the property during her lifetime. Sabrina received the remainder immediately upon the conveyance. When Sabrina later sold the ranch to a third party, the condition occurred and her interest ended entirely, passing the property under the alternative disposition in the deed.
Solomon Silver created a trust directing income to his sister for life and the principal at her death to his son Sterling if Sterling survived her. Sterling's interest vested at creation. When Sterling predeceased the sister, the condition of survival failed and his remainder terminated completely, so the principal passed instead under the residuary clause of the trust instrument.
In January 1899, James J. Hanigan conveyed a house and lot in New York City to a trustee. The trust instrument directed the trustee to pay the grantor from the rents and profits the yearly sum of $1,500, with discretion to pay more, and to pay some debts and two existing mortgages on the property. The trustee received powers to mortgage the premises to satisfy liens or carry out the deed's provisions and to sell the property. Upon the grantor's death, the trustee was to convey the premises, if unsold, to the grantor's heirs at law or to pay them the unexpended balance of any sale proceeds. The trustee could also reconvey the premises to the grantor at any time to end the trust. At the time of trial in this action, the grantor remained alive, with two daughters as his sole descendants. In June 1902, one daughter, Mrs. Hughes, executed a deed conveying to her husband all her interest in the real estate. The plaintiffs, who are judgment creditors, later recovered a judgment for more than $4,000 against Mr. and Mrs. Hughes. They brought this action to subject what they alleged to be an interest in the real property to the lien of their judgment. The Special Term ruled in favor of the plaintiffs on the existence of a reachable interest, but the Appellate Division reached a contrary conclusion, leading to this appeal.
View caseA vested remainder subject to complete defeasance is presently owned by an ascertained person even though it may later be cut off entirely by a condition. A contingent remainder is not yet vested because either the taker is unascertained or the condition precedent to vesting has not occurred.
The interest ends automatically and passes to the next succeeding interest holder without any further action by the grantor or the holder of the future interest.
Yes. The holder possesses a presently vested interest that carries the ordinary powers of ownership, including the ability to sell or mortgage the interest, subject only to the risk that the condition may later terminate it.
…of the grantor. There is no doubt that a gift to A for life with remainder to A’s heirs, gives to such heirs a vested, though defeasible, estate ( Moore v. Littel , 41 N.Y. 66; Clowe v. Seavey , 208 N.Y. 496, 502). But here the question is not whether a remainder is contingent or vested. The question is whether there is any…