If Owner A leaves a house to his children, subject to a life estate for his sister, how is the children's interest classified?

When Owner A leaves a house to his children, subject to a life estate for his sister, the children’s interest is classified as a remainder interest. A remainder interest is created when the owner of a life estate (in this case, the sister) is granted the right to use and occupy the property for her lifetime, after which the property will automatically transfer to the children.

This classification is important because it indicates that the children do not have the right to possess or use the property until the sister’s life estate ends. Their interest is contingent upon that event occurring. Remainder interests are legally recognized as a type of future interest, which specifies that the beneficiaries (the children) will receive full ownership of the property once the preceding life estate terminates.

While the concept of a future interest is closely related, in this scenario, it more specifically refers to the type of interest the children have in relation to the life estate that currently exists. The children do not hold a life estate themselves, as they cannot occupy or control the property until the life tenant passes away. Therefore, their role is best described as having a remainder interest.