What is a remainder interest in property?

A remainder interest refers to a future ownership interest in a property that becomes effective once a prior interest, typically a life estate, ends. In real estate, a life estate allows one party to use and occupy the property for their lifetime, after which the property is transferred to another party—known as the remainderman—who will own the property following the termination of the life estate. This arrangement ensures that the remainderman has a legal right to own the property in the future, providing a clear path of ownership once the conditions of the life estate cease. This setup is an essential concept in estate planning and real property law, illustrating how interests in a property can be divided and transferred over time.

The other choices highlight different concepts in property ownership but do not define a remainder interest correctly. For instance, ownership reverting to the original owner after a specified period describes a fee simple determinable or other similar interests, rather than a remainder. Ownership shared by multiple beneficiaries refers to joint tenancy or tenancy in common, which is distinct from a remainder interest. Temporary rights to use the property before it is sold generally pertain to lease agreements or licenses, rather than a future ownership interest inherent in a remainder.