A remainder beneficiary is a person who is entitled to receive principal when the income interest in a trust ends. This typically means that the income from a trust goes to one or more income beneficiaries, either for a fixed period of time or until a future event (such as their deaths). At that time, the remaining amount in the trust is transferred to the remainder beneficiaries.
There may be conflicts between income and remainder beneficiaries, because the income beneficiaries want the trustee to invest in investment vehicles that generate a larger short-term return (which they will receive), while the remainder beneficiaries want the trustee to invest in longer-term investments, which are more likely to benefit them. There can also be conflicts over how receipts and disbursements are allocated between the income and principal portions of a trust. Depending on how these matters are settled, the amounts received by residual beneficiaries can vary greatly.