Life estate
Overview
 
A life estate is a concept used in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

 and statutory law
Statutory law
Statutory law or statute law is written law set down by a legislature or by a legislator .Statutes may originate with national, state legislatures or local municipalities...

 to designate the ownership of land for the duration of a person's life. In legal terms it is an estate
Estate (law)
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person...

 in real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...

 that ends at death
Death
Death is the permanent termination of the biological functions that sustain a living organism. Phenomena which commonly bring about death include old age, predation, malnutrition, disease, and accidents or trauma resulting in terminal injury....

 when there is a "reversion" to the original owner. The owner of a life estate is called a "life tenant".

Although the ownership of a life estate is of limited duration because it ends at the death of the person who is the "measuring life," the owner has the right to enjoy the benefits of ownership of the property, including income derived from rent or other uses of the property, during his or her possession.
Encyclopedia
A life estate is a concept used in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

 and statutory law
Statutory law
Statutory law or statute law is written law set down by a legislature or by a legislator .Statutes may originate with national, state legislatures or local municipalities...

 to designate the ownership of land for the duration of a person's life. In legal terms it is an estate
Estate (law)
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person...

 in real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...

 that ends at death
Death
Death is the permanent termination of the biological functions that sustain a living organism. Phenomena which commonly bring about death include old age, predation, malnutrition, disease, and accidents or trauma resulting in terminal injury....

 when there is a "reversion" to the original owner. The owner of a life estate is called a "life tenant".

Although the ownership of a life estate is of limited duration because it ends at the death of the person who is the "measuring life," the owner has the right to enjoy the benefits of ownership of the property, including income derived from rent or other uses of the property, during his or her possession. Because a life estate ceases to exist at the death of the measuring person's life, this temporary ownership agreement cannot be left to heirs (intestate) or devisees (testate), and the life estate cannot normally be inherited (but see Life Estate Pur Autre Vie
Pur autre vie
The French translation of pur autre vie is "for another's life." It is also spelled "pour autre vie" in modern French.- Property Law :Pur autre vie is a phrase used to describe the duration of a property interest in property law in the United States and some Canadian provinces...

, and Estate for Term of years
Leasehold estate
A leasehold estate is an ownership of a temporary right to land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord....

). At death, the property involved in a life estate typically falls into the ownership of the remainderman
Remainderman
A remainderman is a person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. Usually this occurs due to the death or termination of the former owner's life estate, but this can also occur due to a specific notation in a trust passing ownership...

 named in the life estate agreement.

A land owner of an estate cannot give a "greater interest" in the estate than he or she owns. That is, a life estate owner cannot give complete and indefinite ownership (fee simple
Fee simple
In English law, a fee simple is an estate in land, a form of freehold ownership. It is the most common way that real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved...

) to another person because the life tenant's ownership in the property ends when the person who is the measuring life dies. For instance, if Bob conveyed to Ashley for the life of Ashley, and Ashley conveys a life estate to another person, Brenda, for Brenda's life [an embedded life estate], then Brenda's life estate interest would last only until whoever dies first, Brenda or Ashley. Then Brenda's interest conveys to the remainder interest or reverts to the original grantee. Once Ashley dies, however, whoever possesses the land loses it (with the land likely reverting to its original grantor). This is a life estate "pur autre vie
Pur autre vie
The French translation of pur autre vie is "for another's life." It is also spelled "pour autre vie" in modern French.- Property Law :Pur autre vie is a phrase used to describe the duration of a property interest in property law in the United States and some Canadian provinces...

", or the life of another. Such a life estate can also be conveyed originally, such as "to A until B dies."

Another limitation on a life estate is the legal doctrine of waste
Waste (law)
Waste is a term used in the law of real property to describe a cause of action that can be brought in court to address a change in condition of real property brought about by a current tenant that damages or destroys the value of that property...

, which prohibits life tenants from damaging or devaluing the land, as their ownership is technically only temporary.

Uses of a life estate

In the United States, a life estate is typically used as a tool of an estate planning. A life estate can avoid probate
Probate
Probate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid will. A probate court decides the validity of a testator's will...

 and ensure that an intended heir will receive title to real property. For example, Al owns a home and desires that Bill inherit it after Al's death. Al can effectuate that desire by transferring title to the home to Bill and retaining a life estate in the home. Al keeps a life estate and Bill receives a vested fee simple remainder. As soon as Al dies, the life estate interest merges with Bill's remainder, and Bill has a fee simple title. Such transfer of interests make unnecessary the use of a will and eliminates the need to probate the asset. The disadvantage to the grantor, however, is that the grant to the remainderman is irrevocable. "Beneficiary deeds" have been statutorily created in some states to address this issue.

It is less well known that the intestacy laws of certain American states, such as Arkansas, Delaware, and Rhode Island, still limit the surviving spouse's rights to the deceased spouse's real estate to a life estate (as shown by the programs linked to the state names). Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...

 employs a similar mechanism in successions called usufruct
Usufruct
Usufruct is the legal right to use and derive profit or benefit from property that either belongs to another person or which is under common ownership, as long as the property is not damaged or destroyed...

.

Duration of a life estate

Life estates are measured either by the life of the property recipient, or by the life of some other person; these latter are called life estates pur autre vie (Law French
Law French
Law French is an archaic language originally based on Old Norman and Anglo-Norman, but increasingly influenced by Parisian French and, later, English. It was used in the law courts of England, beginning with the Norman Conquest by William the Conqueror...

, "for the life of another"). A life estate pur autre vie is most commonly created in one of two circumstances.
  • First, when the owner of property conveys his interest in that property to another person, for the life of a third person. For example if A conveys land to B during the life of C, then B owns the land for as long as C lives; if B dies before C, B's heirs will inherit the land, and will continue to own it for as long as C lives.
  • Second, if A conveys land to C for life, C can then sell the life estate to B. Again, B and B's heirs will own the land for as long as C lives.
  • In either scenario, once C dies, the ownership of the land will revert to A. If A has died, ownership will revert to A's heirs. The right to succeed to ownership of the property upon the expiration of the life estate is called a remainder.

Validity of a life estate

The early common law did not recognize a life estate in personal property, but such interests were cognizable in equity. Thus, although life estates in real estate are still created today, the life estate is more commonly used in trust instruments, typically in an attempt to minimize the effect of the inheritance tax
Inheritance tax
An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...

or other taxes on transfers of wealth.

The law of England and Wales no longer recognises the life estate at law in relation to land; instead the holder of legal title to the land (whether the freehold fee simple or a lease) will hold that land on trust first for the life tenant and then for the remainderman.
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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