What Happens If the Remainderman in a Life Estate Deed Dies?

By Christine Funk, J.D.

What Happens If the Remainderman in a Life Estate Deed Dies?

By Christine Funk, J.D.

When a remainderman in a life estate deed passes away, what happens to the property depends on the terms and conditions of the sole remainderman's will, trust, or the laws of the state. However, if there is more than one remainderman identified in the life estate deed, what happens next depends on the terms and conditions of their ownership.

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Understanding the Legal Terms

To understand what happens if the remainderman in a life estate deed passes away, it is important to understand certain terms commonly used in property law.

Life Estate

A life estate deed grants an individual the right to own the property during their lifetime. Practically speaking, one may pass ownership of their property to their children before they pass away but retain a life estate. This means they get to continue to live on the property until they die, at which time ownership transfers to their children.

Another common scenario occurs when a person covets another's real estate property. One may offer to purchase the property and grant the current owner a life estate, which allows them to remain in the home until their death. While the time of the life estate holder's death is uncertain, this allows the purchaser the certainty of knowing that when the owner does pass away, the purchaser receives title to the property.

Remainderman

The people who stand to receive title to the property upon the passing of the life estate holder are called remaindermen, or, in the case of a single person, the remainderman.

Joint Tenancy

When two or more remaindermen own property in joint tenancy, it means each of the remaindermen has full title to the property. When one joint tenant passes away, the ownership of the property reverts to the surviving joint tenant(s).

Tenants in Common

When two remaindermen own property as tenants in common, each of the remaindermen own half of the property. When one tenant in common dies, the ownership of that half of the property transfers in accordance with the deceased remainderman's will or trust or, in the case of no will or trust, in accordance with the laws of inheritance in the state where the property is held.

What Happens When a Remainderman Dies Before the Life Estate Holder

If there is a single remainderman and they pass away before the life estate holder, the property passes in accordance with the will, trust, or laws of the state of the remainderman when the life estate ends. If there is more than one remainderman, what happens when one dies depends on the type of title they hold.

For example, if there are two remaindermen who hold the title as joint tenants, when one passes away, the title to the property transfers to the other. If, on the other hand, there are two remaindermen who hold the title as tenants in common, when one remainderman passes away, their interest in the property passes in accordance with the terms and conditions of their will, trust, or the laws of their state.

If you are considering drafting a life estate, it is a good idea to work with a property law attorney or to consult with an online service provider.

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