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Remainderman

Also known as: Remainder Beneficiary, Ultimate Beneficiary

Definition

A remainderman is the person entitled to receive trust property after a life tenant's interest ends, typically when the life tenant dies.

This concept is essential in estate planning for blended families, enabling you to provide for a spouse while ensuring children ultimately inherit.

What Does Remainderman Mean?

In UK trust law, a remainderman holds a vested future interest in trust property that crystallizes when prior interests end. HMRC describes this in trusts for interests in succession—where property is held "for A for life, with remainder to B." The life tenant (A) receives income or use during their lifetime, while the remainderman (B) receives capital when A dies. The interest is vested but not yet in possession—a guaranteed future entitlement without current property access.

This structure is particularly common in blended families. David, 58, remarries and owns a £400,000 house. He wants his wife Sarah to have security if he dies first, but wants his children Emma and James to ultimately inherit. David's will creates a life interest trust: Sarah becomes the life tenant with the right to live in the house for her lifetime, while Emma and James are remaindermen who inherit when Sarah dies. Sarah has secure housing but cannot sell, while Emma and James inherit eventually.

Under the Trusts of Land and Appointment of Trustees Act 1996, trustees must balance interests of both life tenants and remaindermen. When the life tenant dies, remaindermen receive the property absolutely. Trustees preserve capital for remaindermen while ensuring the life tenant enjoys their rights.

Common Questions

"What happens if a remainderman dies before the life tenant?" If a remainderman dies before the life tenant, their share passes according to the trust document. Some trusts specify substitute remaindermen or that the share passes to the deceased remainderman's estate. Without specific provisions, the share may pass under intestacy rules or among surviving remaindermen.

"Can a remainderman force the sale of property while the life tenant is alive?" No, a remainderman cannot force sale during the life tenant's lifetime unless the trust document allows it or both parties agree. The life tenant has the right to occupy or receive income until death.

"Do remaindermen pay inheritance tax when they receive the property?" Remaindermen typically pay no Capital Gains Tax when inheriting trust property at the end of a life interest (Section 62 TCGA 1992 confirms death is not chargeable). However, property may be subject to Inheritance Tax depending on when the trust was created and the settlor. Trusts created before 22 March 2006 often benefit from favorable IHT treatment.

Common Misconceptions

Myth: As a remainderman, I can inspect the property and check on it whenever I want

Reality: Remaindermen have no automatic right to enter or inspect property occupied by a life tenant. The life tenant has exclusive right to occupy during their lifetime. Remaindermen can only inspect if the life tenant agrees or if there's evidence of waste, requiring court application.

Myth: Remaindermen can force the life tenant to maintain the property to a high standard

Reality: Life tenants must avoid "waste" (actions that significantly decrease property value) but are not required to improve property or maintain it to investment standards. They must keep it in reasonable repair and pay ongoing costs, but remaindermen cannot force expensive upgrades. Trustees balance the life tenant's enjoyment against preserving capital for remaindermen.

  • Life Tenant: The person who benefits from trust property during their lifetime, holding the interest that precedes the remainderman's entitlement.
  • Life Interest Trust: The trust structure that creates both life tenant and remainderman interests for sequential beneficiaries.
  • Trust: The legal arrangement where remaindermen hold future interests while trustees manage property for beneficiaries.
  • Blended Families: Family situations where remainderman structures balance a spouse's needs against children's inheritance rights.
  • Children from First Marriage: Often named as remaindermen to ensure they inherit after a step-parent's life interest ends.

Need Help with Your Will?

Creating life interest trust provisions with remaindermen ensures your spouse has security while protecting your children's inheritance—particularly valuable in blended family situations.

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Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.