Expectant Heir - Definition - Law Dictionary Home Dictionary Definition expectant-heir

Definition :

Expectant heir. A person to whom property will accrue on the death of another person. expectant heirs wishing to anticipate this property have frequently borrowed money, to be repaid when the expected property shall devolve upon them. From the uncertainty of this period, the unsoundness of the security which the expectant heir can offer, and from the pressing character of his immediate necessities, the rate of interest is necessarily higher than that upon an ordinary loan, and is frequently very much higher than the risk run by the lender requires. At Common Law all such loans are good, and the interest upon them, however high, recoverable. By the Usury Acts, indeed-which, however, did not apply to loans to expectant heirs with any greater rigour than to loans to other persons'they were for a long period of yeas subject to the restriction that only a fixed maximum rate of interest could be exacted, but the Usury Acts were repealed in 1854 by 17 & 18 Vict. c. 90. See USURY.

From very early times, however, Courts of Equity have been accustomed to interfere between lender and borrower in these cases, and to set aside as 'unconscionable bargains' those mortgages of reversionary interests or other contracts of sale or loan in which the distress of the expectant heir is taken advantage of. See the leading case of Earl of Chesterfield v. Janssen, (1750) 2 Ves Sen 125; 1 W&TLC; and Earl of Aylesford v. Morris, (1873) LR 8 Ch 484, which latter case decided that the (English) Sales of Reversions Act, 1867 (30 & 31 Vict. c. 4), repealed and extended by the (English) L.P. Act, 1925, s. 174, providing that no bona fide purchase of a reversion (including an expectancy or possibility) shall be set aside 'merely on the ground of undervalue,' leaves unaffected the jurisdiction of Courts of Equity to set aside these unconscionable bargains. The onus is on the buyer of a reversionary interest, including an expectancy or possibility to show that the transaction was in good faith under independent advice as a fair valuation, and if made in secret, or confidentially, that it was otherwise unobjectionable. See REVERSION.

The practice of the Court in setting aside the bargain is to direct the reversion charged to stand as security for the money actually advanced and interest at the rate of five per cent. upon such actual advance. See MONEYLENDERS ACT.