The remainderman's interest is the present value of a property subject to a life tenancy upon reversion to the owner. It is easily calculated by deducting the life interest from the "unencumbered" market value. If the unencumbered market value of the above property is $100 000 the remainderman's interest is:


Where: RI = remainderman's interest
UMV = unencumbered market value
LI = life interest

RI = 100000 - 55500 = 44500

Therefore, the remainderman's interest is much higher than an equivalent lessor's interest because of the possibility that the life tenant may die before the end of his/her expected life.

See life interest