In re Schneider’s Estate
Citation: 6 Misc. 2d 304 (N.Y. Sur. Ct. 1955)
Facts
A will created a trust with income payable to the testator’s son for life, with the remainder to the son’s “lawful issue” surviving at his death. The question arose whether the remainder was vested or contingent, which affected the disposition of the trust.
Issue
Is a testamentary remainder to “lawful issue surviving at the life tenant’s death” a vested or contingent remainder?
Holding
The remainder was contingent because the identity of the ultimate beneficiaries (which of the son’s children would survive him) was unknown, and there was a condition precedent (survivorship at the life tenant’s death).
Rule
Contingent remainder: A remainder is contingent when: (1) the taker is not yet identified (cannot be ascertained), OR (2) there is a condition precedent to taking. “Surviving” a life tenant is a condition precedent — if no issue survives, the remainder fails. Until the condition is resolved, the remainder is contingent, not vested.
Vested vs. contingent distinction: A vested remainder requires both: (a) an ascertained person who (b) has a present right to the future possession, subject to no conditions precedent. A contingent remainder lacks one or both of these.
Significance
- Classic illustration of the vested vs. contingent remainder distinction in the estate planning context
- The contingent remainder is subject to the Rule Against Perpetuities (must vest or fail within a life in being plus 21 years)
- A vested remainder subject to divestment (e.g., “to A, but if A dies before B, to C”) is treated differently from a contingent remainder — it is vested, though it may be defeated
- Used in teaching materials to distinguish the types of remainders and their RAP implications