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.” Upon the death of the life tenant, ownership of the property reverts back to the original owner or to a person designated by the original owner. Thus, the life tenant is generally entitled to use the property for their lifetime but not pass it on to their own heirs upon their death.
Why Create a Life Estate?
Life estates are often used to avoid probate and give real estate to children without the parent losing her ability to live in the home. If a person owns a home in her name alone, and the property is not held in trust, the home will go through probate upon the person’s death. Probate is a lengthy and sometimes expensive process.
A life estate can also ensure that someone you love cannot be kicked out of your home. Let’s say a widower remarries but the son doesn’t care for his step mother. Fearing that his son may try to kick out the stepmother upon the widower’s death, the widower may elect to create a life estate and make the stepmother a life tenant and give the son rights to the property after the stepmother passes away. The son’s right to the property upon the stepmother’s death would be referred to as a remainder interest.
How to Create a Life Estate?
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. Typically, life estates are formed through a deed or a will. Creating a life estate often requires the use of specific legal language in order to be effective and may require consulting an attorney to ensure that your wishes are appropriately recorded.
More information on issues related to creating a life estate can be found here:
How are Life Estates Terminated?
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 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 document that created the life estate provided certain conditions for the life tenant that have not been met.
The person conveying the life estate has great discretion in any conditions they wish to attach to the life estate, provided that the conditions are allowed by law.
Can a Life Tenant Make Improvements on the Home?
Even though life tenants have an interest in the property, they do not have a right to transfer rights to the property after their death. The future rights to the property lie with whoever has the remainder interest. As a result, the life tenant is not allowed to do anything that devalues or changes the characteristic of the property without the consent of the person who has the remainder interest.
Can a Life Tenant Sell or Lease a Life Estate?
The short answer is “yes,” but there are some restrictions. The life tenant can only sell or lease their own rights to use the property, which is for the duration of their life. Therefore, if the life tenant sells or leases the right to use the property, when the life tenant dies, the property will still revert to the person with the remainder interest.
Do I Need a Lawyer to Help with a Life Estate?
Creating a life estate often requires very specific legal language. You may wish to consult an experienced estate lawyer to help you draft the required documents and ensure that your property is distributed in the way you intend. Also, in the event a lawsuit arises out of the distribution of the life estate, your attorney can provide you with expert advice and represent you in court.