Under Louisiana life estate law, life estates let someone live on a property until they pass away. Once that person does pass away, the property will revert to, or go back to, its original owner.
A life estate can be created by an owner or property, called a grantor. These life estates are given to grantees, or recipients. Life estates are often used in estate planning documents that allow parents or disabled family members to live on someone’s property until they pass away.
Life estates can also include provisions that allow the named resident to receive rental income from the property until the grantee dies. A life estate is a legal tool that is commonly used to allow property uses between parents, other relatives, and even close friends.
Using a life estate arrangement can be helpful in situations where property can be used by another party for a period of time, but when the property owner wants it back in their possession afterward for legal purposes. Life estates can be very helpful for property owners, as the property automatically goes back to its original owner, which is called reversion.
With most life estates, the named grantee is allowed to use the property for the duration of their lifetime. It is important to note, however, that recipients are not permitted to transfer the property to their own beneficiaries or heirs when they pass.
If an individual is considering creating a life estate in Louisiana or has questions about an existing life estate, it is important to schedule a legal consultation in Louisiana.
In Louisiana, How Is a Life Estate Created? How Is a Life Estate Terminated?
It is pretty simple to create a life estate in Louisiana. Grantors can draft a written document that states they are conveying their property for the length of someone else’s life.
A conveyance is defined as a transfer of someone’s interest in real property. This can include private or commercial property.
Conveyances are made when a grantor uses words of conveyance to transfer their property interest to the named grantee. There are some common phrases that are used to create life estates, for example, “I, (grantor’s name), convey my real property to (grantee’s name), for their lifetime.”
This type of language is commonly used in a deed or a will. In Louisiana, there may be state-specific language requirements when creating life estates, so it is important to have legal advice.
A life estate that is created can be terminated, or ended, when the grantee passes away. Life estates can also end for numerous other reasons, including the grantee engaging in deliberate acts of destruction that result in a reduction in the property value or if they committed impermissible waste.
It may also terminate if the grantee violated a condition included in the life estate, such as upkeep of the premises. A grantor is allowed to include any type of lawful condition they would like to their life estate.
An example of a life estate that includes conditions may be, “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.”
Louisiana lawyers can help clients with any questions or concerns they have about using life estates for their unique situations.
How Is the Length of a Life Estate Measured in Louisiana?
The length of a life estate in Louisiana will usually be measured by the length of the lifetime of the recipient or another named third party. Typically, the life estate is based on the lifespan of the grantee and then reverts back to the property owner.
Another type of life estate that can be created is a “life estate pur autre vie.” “Pur autre vie” is French for “by someone else’s life.”
When this type of life estate is used, the length is measured by the lifespan of a third party. Common language used to create this type of life estate is, “I, grantor, convey the property to grantee, for the life of third party.”
These life estates are typically used in cases where the property is conveyed for a disabled adult child, dependent, or other party who requires care.
What Are the Obligations of a Life Tenant?
When a life tenant is given a life estate, they are usually permitted to have all uses and profits, but this comes with some obligations. Obligations are imposed to protect the rights of the original property owner.
A life tenant is obligated to avoid engaging in waste in property. Three legal categories of waste exist.
The first category is voluntary, or affirmative, waste. This happens when the life tenant engages in any conduct which results in a decrease in property value.
The second category is permissive waste. Under this category, the life tenant must keep the premises in good repair.
The last category is ameliorative waste. This arises when the life tenant makes improvements that increase the value of the property without first obtaining permission from the property owners.
It is important to note that the State of Louisiana does not use this common law ameliorative waste concept. Instead, it follows a civil system that reviews whether the possessor is in good faith or bad faith. In Louisiana, if a life tenant engaged in ameliorative waste, they would be classified as a possessor in bad faith.
In addition to these, life tenants must make sure to pay all ordinary taxes and real estate taxes. They must also avoid liens and encumbrances on the property.
Why Might Someone Want to Create a Life Estate?
It can be helpful to create a life estate when someone wants to avoid the probate process, protect the life tenant, or is tax planning. Probate can be a long and expensive process that can be avoided by using a life estate.
When someone creates a life estate, the property is still considered an asset of the owner for its duration. This process also lets the owner’s heir inherit the property at the value it holds at the time of the death of the owner instead of at the time when the property was bought. This can help heirs avoid capital gains taxes.
Life estates also help protect life tenants by making sure they can stay on the property until they pass away.
Should I Seek Legal Counsel Regarding a Life Estate in Louisiana?
Yes, if you are looking to create a life estate or have any type of questions about life estates in Louisiana, it is important to schedule a meeting with a Louisiana estate lawyer. Your estate lawyers can explain Louisiana life estate laws and how they affect your situation.
If you are the grantee of a life estate, your lawyer can explain your rights and obligations. Additionally, they can represent you if any disputes arise related to the property.
You can use LegalMatch today at no cost to find a Louisiana estate attorney in your area who is ready to answer your life estate questions. All you need is around 15 minutes to complete the online submission process and start getting attorney responses in as little as one business day.
