REMAINDERMAN'S
INTEREST
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:
RI = UMV - LI
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