Also known as: transmissible interests · transferable interest
Written by attorneys · grounded in primary & secondary sources — see below
A future interest that passes to the holder's heirs or devisees if the holder dies before the interest becomes possessory. The interest is treated like other probate property and is subject to the probate process and estate taxes.
Thomas Thompson holds a future interest in partnership profits that will vest upon a specified event. Before the event occurs, Thomas dies and leaves the interest to his heir in his will. The heir presents the interest to the partnership, which admits the heir as a partner upon acquiring the transmissible interest with consent of all existing partners.
Tabitha Taylor holds a transmissible interest reflecting unreturned contributions in a dissolving LLC. Upon wind-up the LLC first pays creditors, then distributes surplus to Tabitha's estate because she died before the interest became possessory, satisfying the priority for owners of such interests.
Tamara Tan holds a transmissible partnership interest. A judgment creditor obtains a charging order against the interest. The partnership must pay distributions to the creditor rather than to Tan's estate after she dies before the interest vests in possession.
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The interest passes to the holder's estate and is treated like any other probate property. It is subject to the probate process and estate taxes rather than failing or reverting.
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A transmissible interest is a recognized future interest that survives the holder's death and passes by will or intestacy. An expectancy is not an interest at all and does not pass at death.
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Yes. A grantor may create a transmissible interest in contingent remaindermen so that the interest passes to their heirs if they die before the interest vests in possession.
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