Legal Definitions - Subject to open

The legal term Subject to open (also sometimes called subject to partial divestment) describes a situation where an interest in property, often established through a will or trust, is granted to a specific group of beneficiaries (known as a "class") that is not yet finalized. While at least one member of this class must already exist and meet any initial requirements, the defining characteristic is that the class can expand to include additional individuals who meet the specified criteria in the future. This means that the share or interest of the existing beneficiaries could potentially decrease as new members join the group.

Here are a few examples to illustrate this concept:

• Example 1: A Grandparent's Will for Future Grandchildren

  Imagine a will that states, "I leave my vacation home to my grandchildren." At the time the grandparent passes away, they have two grandchildren. However, their children are still young and might have more children in the future.

  How this illustrates "Subject to open": The "class" here is "grandchildren." Two members of this class already exist and are entitled to an interest in the vacation home. However, the class is "open" because if the grandparent's children have additional children after the grandparent's death, those new grandchildren will also become members of the class and share in the property. The original two grandchildren's individual shares would then be reduced to accommodate the new members.

• Example 2: A Trust for Children's College Education

  A parent establishes a trust fund specifically to cover the college education expenses for "all of my children." When the trust is created, the parent has one child who is currently in elementary school.

  How this illustrates "Subject to open": The "class" is "all of my children." One child currently exists and is a beneficiary of the trust. However, the class remains "open" because if the parent has more children later, those new children will also be included as beneficiaries of the trust. The funds originally intended for one child would then be distributed among a larger group, meaning each child's individual share of the trust's benefits could be less than if they were the sole beneficiary.

• Example 3: A Donation of Land to a Growing Charity Board

  A philanthropist deeds a parcel of land to "the current and future members of the Board of Directors of the Evergreen Nature Conservancy." At the time the deed is executed, the Conservancy has five board members.

  How this illustrates "Subject to open": The "class" is "the current and future members of the Board of Directors." Five members currently exist and immediately gain an interest in the land. However, the class is "open" because the Conservancy's bylaws allow for the appointment of additional board members over time. If new directors are appointed, they will also become part of the class and share in the ownership of the land, thereby diluting the individual interest of the original five board members.