According to life estate law, both common and statutory, in Illinois, a life estate allows someone to remain on their property until they pass away. After they pass away, the property will pass back, or revert to, the owner.
Life estates are created by owners of property, called grantors, and are given to recipients, or grantees. One example of a life estate is when an adult child provides in their estate planning documents that their parents have the right to live on their property until they pass away.
Another way this can be created is by including that the named parents can receive rental income from the property until the time the recipient, or grantee, passes away. Life estates are a legal tool that is often used to convey property between relatives and even close friends.
This type of arrangement can be useful in a situation where property may be used by another person for an extended period of time, but the owner wants the property to come back into their possession for legal purposes. A life estate is very useful because it allows property to return to its original owner, or the grantor, called reversion.
In most situations, the grantee who holds the life estate can use the property throughout their lifetime. However, the grantee cannot transfer the property to their own heirs when they pass away.
When someone is interested in creating an Illinois life estate or has any questions or issues concerning an existing life estate, they can schedule a legal consultation in Illinois.
In Illinois, How Is a Life Estate Created? How Is a Life Estate Terminated?
Creating a life estate is fairly simple. A grantor can create a written document that shows they are conveying property for the length of another person’s life.
Conveyances are transfers of interest in real property, such as houses or commercial real estate. A conveyance is made when the grantor uses words of conveyance to transfer a property interest to a grantee.
Common language that is used to make a life estate includes the following: “I, (grantor’s name), convey my real property to (grantee’s name), for their lifetime.” This language is often contained in a deed or a will.
There may be specific language requirements in Illinois, so it is essential to consult with a lawyer when creating a life estate. Life estates can be terminated when the grantee passes away.
There are also other reasons why life estates can be ended, such as if the grantee committed impermissible waste or engaged in overt and willful acts of destruction that cause a drop in the property value. The life estate can also end when the grantee violates a condition attached to the life estate.
A grantor may include any lawful condition on a life estate. One example of conditions can be related to upkeep of the property.
The language used in these situations may be, for example, “I, (grantor’s name), convey my real property to (grantee’s name), for their lifetime, so long as they maintain the swimming pool on the premises.”
Illinois lawyers can help their clients create life estates that work for their unique situations.
Why Might an Individual Want a Life Estate?
Someone may want to create a life estate when they want to avoid probate, are tax planning, or want to protect the life tenant. Probate can be a lengthy and expensive process that the property owner can avoid by using a life estate.
When a life estate is created, it is an asset of the owner throughout the life estate. It also allows the heir to inherit the property at its value at the time of the owner’s death instead of at the time when the property was purchased. This can allow the heir to avoid paying capital gains tax in certain situations.
Using a life estate also protects the life tenant by ensuring they can stay on the property until their death.
How Is the Length of a Life Estate Measured in Illinois?
Life estates are typically measured by the lifetime of the grantee or a third party. Most life estates are measured by the life of the grantee.
With this type of life estate, when the grantee, or life tenant, passes away, the property reverts back to the owner. This means that the life estate is measured by the lifetime of the grantee.
A second form of life estate is called a “life estates pur autre vie.” “Pur autre vie” is French for “by someone else’s life.”
With this type of life estate, the terms are measured by the life of a third party. The language commonly used to create this type of life estate is, “I, grantor, convey the property to the grantee, for the life of the third party.”
In this type of life estate, the third party is called the measuring life because their life is the measurement for the duration of the grantee’s life estate. These can be used when someone has a disabled adult child or other dependent who requires care.
What Are the Obligations of a Life Tenant?
During a life estate, the life tenant is typically allowed to all uses and profits from the property. This is done to avoid impairing the rights of the individuals who will own the property next.
It is important to note, however, that life tenants cannot engage in waste in property. There are three legal categories of waste.
One category is affirmative, or voluntary, waste. This is any conduct that causes the property to lose value.
Another category is permissive waste. This category means that the grantee cannot neglect their obligation to keep the premises in reasonably good repair.
The third category is ameliorative waste. This type of waste involves increasing the value of the property without first obtaining permission from the owner. In Illinois, the owner would not likely be able to sue for damages to reduce the property value back to what it was.
Life tenants must also ensure that all ordinary and real estate taxes are paid and protect the property from liens and encumbrances.
Should I Seek Legal Counsel Regarding a Life Estate in Illinois?
If you want to create an Illinois life estate or have questions about creating or terminating an Illinois life estate, an Illinois estate lawyer can help. Your estate lawyer can explain Illinois state laws and how they may apply to your life estate options.
If you are a life estate grantee, your lawyer can help you understand your rights and obligations. They can also help you if any disputes arise related to the life estate.
LegalMatch provides no cost attorney matching services that can help you find an estate lawyer in your area of Illinois in as little as 15 minutes. Simply complete the online submission process and you will begin receiving responses from member attorneys in around a business day.
These responses will include information on each Illinois lawyer’s education, background, fee arrangements, and reviews from former clients. Many of these member attorneys may also provide free consultations, allowing you to meet with several different lawyers at no cost to see who best fits your needs.
