Property OwnershipIntermediateDelaware Exam

What is a 'remainder interest' in Delaware real estate?

AThe interest remaining on a mortgage after partial payoff
BThe future interest that vests in a third party upon termination of a life estateCorrect
CThe portion of a property not covered by title insurance
DThe equity remaining after a foreclosure sale

Why The future interest that vests in a third party upon termination of a life estate Is Correct

Answer B: The future interest that vests in a third party upon termination of a life estate

A remainder interest is a future interest in property held by a third party (the remainderman) that will become possessory when a prior estate (such as a life estate) terminates.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

Key Property Ownership Terms in This Question

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Life Estate

A freehold interest in real property that lasts only for the duration of a specified person's life.

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