How a Remainder Interest Works
When a property owner creates a life estate, they typically name two parties. The life tenant uses the property during their lifetime. The remainder holder waits. When the life tenant passes away, ownership transfers to the remainder holder automatically. No probate is needed.
Protections for Remainder Holders
Under Arizona law (A.R.S. 33-228), a properly created remainder interest cannot be destroyed by the life tenant's actions. The life tenant cannot sell the property, give it away, or mortgage it without the remainder holder's consent. This protection ensures the remainder holder will receive the property as intended.
Remainder Interest in Estate Planning
Remainder interests are most commonly seen in life estate arrangements, but they also appear in trusts. Under Arizona law, future interests are "descendable, devisable and alienable." That means a remainder interest can be inherited, included in a will, or even sold before it takes effect. It is a real property right from the moment it is created, not just a promise.