The Interest of a Contingent Resident in an Irrevocable Trust: More Than Just a Wait | Charles E. Rounds, Jr.
An incident related to the rest of the eventual equitable corpus to a continuing irrevocable trust relationship is more than a mere expectation. The holder of such remainder will have the capacity required to seek judicial enforcement of the terms of the trust and / or redress in the event of breach of trust. This is the case even when someone else is the current beneficiary. Here’s why: When the trust became irrevocable, the holder was given a current “vested” equitable property right enforceable over a contingent equitable property right, although the interest itself could never actually be vested, that is. that is to say to become possessory, to the particular holder. A contingent interest is subject to a condition precedent, such as survival. In Estate of Davis, 469 P.3d 16 (Idaho 2020), the trial court ruled such a remnant as a mere expectation, a costly disregard of a fundamental principle of the Anglo-American legal tradition, costly in particular for the innocent owners of these property rights. On the other hand, in the case of a currently revocable trust, the rights, duties and obligations of the parties to the relationship are quite different, a subject which is generally taken up in §8.11 of Loring and Rounds: A Trustee’s Manuel (2021), of which the section is reproduced in full in the annex below.