An ulterior estate is a type of property interest that is created through a gift. It is designed to take effect after the termination of a preceding estate. Essentially, it represents a future interest that will come into play once certain conditions are met, specifically when the current estate ends.
Ulterior estates are commonly referenced in property law, particularly in the context of estate planning and real estate transactions. They are relevant in situations involving wills, trusts, and gifts of property where future interests are established. Users can often manage these situations using legal forms, such as those provided by US Legal Forms, which offer templates for creating wills or trusts that include ulterior estates.
Here are a couple of examples of abatement:
Example 1: A parent transfers a house to their child but specifies that the child will only fully own the house after the parent passes away. In this case, the child has an ulterior estate that becomes effective upon the parent's death.
Example 2: A trust is set up where a beneficiary receives a property interest that will only activate once they reach a certain age. This is another instance of an ulterior estate. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Ulterior Estate Rules |
|---|---|
| California | Allows for ulterior estates in wills and trusts, with specific requirements for clarity. |
| New York | Recognizes ulterior estates but requires detailed language in legal documents. |
| Texas | Has specific statutes governing the creation and enforcement of ulterior estates. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Contingent Remainder | A future interest that depends on a condition being fulfilled. | Ulterior estates are specifically created through gifts, while contingent remainders can arise from various legal instruments. |
| Life Estate | A property interest that lasts for the life of a specific individual. | Life estates end upon the death of the individual, whereas ulterior estates take effect after the termination of a preceding estate. |
If you believe an ulterior estate may apply to your situation, consider the following steps:
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| Attribute | Details |
|---|---|
| Type of Interest | Future contingent interest |
| Activation | Upon the determination of a preceding estate |
| Common Use | Wills, trusts, and property gifts |
An ulterior estate is a future property interest created by a gift that takes effect after the termination of a preceding estate.