What is a Life Estate?
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What is a Life Estate?
A “Life Estate is a type of real property conveyance wherein a person is granted the use and ownership of a piece of real property for their lifetime. The person who is granted these rights is called the “life tenant”. Life estates are commonly used to convey property between relatives or close friends.
Life estate arrangements are useful for situations where the property may be used by another for an extended period of time, but the owner wants the property to revert to their own possession for legal purposes. The fact that the property will return to the original grantor is a main aspect of a life estate; this is called a “reversion”.
Thus, the holder of a life estate is generally entitled to use the property during their lifetime, but they won’t be able to transfer it to their own heirs upon their death.
How is Life Estate Created?
A life estate is generally created by agreement between the property owner and the life tenant. This is usually accomplished through a written document, much like the way a contract is used for other types of contracts. In some situations, a life estate can be granted through a person’s will. In such cases, when the life estate holder dies, the property will be transferred to the original owner’s survivors, since they will already have been deceased.
How are Life Estates Terminated?
By definition, life estates allow the holder to use and possess the property during their lifetime. Accordingly, life estates will generally terminate upon the death of the life tenant. Once this happens, the property may revert back to the original grantor if they are still alive, or it will pass to their estate.
In some cases, a life estate may be terminated before the life tenant dies. This may occur if the conveying document contained conditions that are to be kept in order for the life tenant to keep the property. For example, the grantor of the life estate may state in the agreement that the life estate will terminate if the life tenant fails to meet a condition.
Such conditions are largely up to the property owner. They must be valid under state and local laws in order to be enforceable. For example, the conditions placed on a life tenancy cannot force the life tenant to take actions that are illegal or prohibited by law.
Disputes over life estates are often processed through the court system, and can involve remedies such as a damages award or a reversion of the property back to the original owner.
Do I Need a Lawyer for Help With a Life Estate?
Life estates are very important legal mechanisms that allow property to be used and transferred back to the original owner. You may wish to contact an experienced real lawyer if you need help drafting, reviewing, or signing a life estate document. Your attorney can go over the documents to ensure that your interests are being met. Also, in the event of a lawsuit over the life estate agreement, your attorney can provide you with expert advice and representation in court.
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Last Modified: 10-03-2016 09:16 PM PDT
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