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Finance: What is Reversionary Interest? 42 Views
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Description:
What is Reversionary Interest? Reversionary interest refers to the interest in a property or a trust that returns back to the owner or trust upon a concluding event. In the case of real estate, it may be a leased property, where the landlord hold the reversionary interest, which would return back upon the maturity date. With a trust, assets bequeathed to a beneficiary may revert back to the trust upon the beneficiary’s death.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
Transcript
- 00:00
Finance allah shmoop what is ri version ery interest Well
- 00:08
it's a conditional gift or sail that is you might
- 00:11
be granted possession of some antique rocking chair are family
- 00:14
heirlooms or theater program signed by khloe kardashian from her
- 00:19
broadway debut But if you don't hold up your end
Full Transcript
- 00:22
of whatever deal was made for that object while it
- 00:25
can be snatched away from you just as easily as
- 00:28
it was given your interest in it can revert to
- 00:32
the giver Like your uncle morton sees how excited you
- 00:35
are about getting your license and says he'll give you
- 00:38
his old honda accord Nothing flashy but hey it'll get
- 00:41
around and the alternative is a monthly bus pass or
- 00:44
uber So it sounds amazing but the car is only
- 00:47
yours as long as you don't get a ticket If
- 00:50
you do get a ticket your uncle gets the car
- 00:51
back and says neener squared and you start hoping for
- 00:55
warm days with no rain What happened here Well the
- 00:57
interest in that car reverts back to the uncle the
- 01:01
person who gave you the car in the first place
- 01:03
The key word here is revert Sounds like reverse and
- 01:06
yet basically implies the movement of an item from one
- 01:09
party to another can be reversed if a given condition
- 01:12
or conditions are met Another example For ten grand you
- 01:15
can use the walkway between my house and the beach
- 01:17
for ten years After that time period the right to
- 01:20
use my walkway reverts back to me and your left
- 01:24
using that other walkway the one covered in rusty nails
- 01:27
and rabid wolves This forces you to negotiate again and
- 01:31
all the circumstances are different For instance now i want
- 01:34
twenty thousand dollars instead of ten So here the only
- 01:37
condition is that the recipients interest in the walkway is
- 01:39
contingent on time reversion Ery interests applied a vanilla investments
- 01:44
to like cousin billy joe You get the interest on
- 01:47
these bonds and the rent from these apartments until your
- 01:50
mama cousin lulu belle dies At that point the dough
- 01:53
from these two of investment vehicles reverts back to me
- 01:57
So that's re version ery interest and really well The
- 02:00
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