Legal Definitions - alternative contingent remainder

An alternative contingent remainder describes a specific arrangement in property law where the future ownership of an asset is determined by one of two opposing conditions. The defining characteristic is that one of these conditions is guaranteed to be met, ensuring that the property will always transfer from the current owner to one of two designated future recipients. It's "contingent" because the transfer depends on a condition, and "alternative" because there are two mutually exclusive possibilities, guaranteeing that the property will not revert to the original owner's estate if a single condition fails.

Essentially, the property is promised to one person if a certain event happens, and to another person if that event *doesn't* happen. This structure ensures that the property will definitely change hands, with the ultimate recipient being the only variable.

• Example 1: A Family Trust and a Career Path

  A wealthy aunt establishes a trust for her niece, stating: "My vacation home shall go to my niece, Sarah, if she becomes a licensed medical doctor by age 30. If she does not become a licensed medical doctor by age 30, then the vacation home shall go to my nephew, Tom."

  This is an alternative contingent remainder because the vacation home will definitely transfer from the trust's control when Sarah turns 30. If Sarah meets the condition (becomes a doctor), she receives the home. If she doesn't, Tom receives it. The outcome is certain (transfer of property), but the recipient is contingent on Sarah's career path.

• Example 2: A Business Succession Plan

  A business owner, Mr. Henderson, drafts a deed for his commercial building: "This building shall be transferred to my business partner, Ms. Davies, if the company achieves a net profit of $5 million by December 31, 2025. If the company does not achieve a net profit of $5 million by December 31, 2025, then the building shall be transferred to my son, David."

  Here, the commercial building will certainly transfer from Mr. Henderson's ownership on January 1, 2026 (or upon the condition being met/failed by December 31, 2025). The condition is the company's profit target. If the target is met, Ms. Davies gets the building. If not, David gets it. One of these two outcomes is guaranteed, ensuring the property transfers.

• Example 3: A Grandparent's Legacy and Educational Achievement

  A grandmother writes in her will: "My antique coin collection shall pass to my granddaughter, Emily, if she completes a master's degree by her 25th birthday. Otherwise, the collection shall pass to my local historical society."

  This illustrates an alternative contingent remainder because the antique coin collection will definitely leave the grandmother's estate when Emily turns 25. The condition is Emily's completion of a master's degree. If she fulfills this condition, she receives the collection. If she does not, the historical society receives it. In either case, the collection transfers to a new owner.