Life estate laws vary by state. Depending on the conditions included in the life estate reservation on the deed and local laws, the holder of a life estate may remain responsible for the property's bills such as homeowner's insurance premiums. However, she's no longer the legal owner; she has just the life use interest. Some states view a life estate holder as a tenant who doesn't have to pay rent unless the life estate deed reservation states that she does.
Since the person who keeps the life estate still has interest in the property, the "remainder" of her property interest passes to the person receiving the property on the life estate deed. For example, if the person who kept the life estate owned 100 percent of the property when she transferred it on a deed to the remainderman, the remainderman will own 100 percent of the property once the life estate ends.
Death of Remainderman
If the only remainderman on a life estate deed dies before the person with the life estate, the property interest remaining after the life estate passes to the remainderman's legal heirs. The life estate does not end just because the only remainderman dies. If more than one remainderman was named on the life estate deed, and one remainderman dies, what happens next depends on how the remaindermen took ownership to the property on the deed. If the remaindermen were joint tenants, the dead remainderman's interest automatically belongs to the surviving remainderman. If they took ownership as tenants in common, the dead remainderman's interest belongs to his estate.
Life Estate Termination
A person with a life estate may end the life estate while she's still living by creating and filing another deed to the property that specifically terminates her life estate. A deed terminating a life estate usually has the remainderman named on the original life estate deed as the receiver of the real estate. A life estate may end by its own terms. For example, if a life estate clause on a deed states that the estate ends if the holder moves to a nursing home, the life estate terminates once the holder enters a nursing home.