Life Estate Laws

By John Cromwell

When planning your estate, you need to consider who gets your property as well as when you want them to receive it. You may also want to avoid the probate process, which often delays the transfer of property. One option is creating a life estate, which allows your real estate to be immediately transferred to another person after your death without going through probate.

Overview

A life estate essentially creates two owners with different rights to one property. The life tenant is a person who owns and controls the property for the remainder of his life. The "remainderman" is a second person who gets the rights to the property after the life tenant dies. Once the remainderman receives the property, he owns it outright without any restrictions. While the life tenant possesses the property, he cannot sell it without the consent of the remainderman. The life tenant is also responsible for maintaining the property for the duration of his life.

Identifying the Life Tenant

There are generally two scenarios when a life estate is used. The first is if a property owner wants to retain the use of property during his life but knows who he wants to give the property to when he dies. In this scenario, the owner creates a life estate with himself as life tenant and the person he wants to give the property to as the remainderman. The second option is through the use of a will; the will maker grants a life estate to one person and makes another person a remainderman. This can be helpful if the property owner has remarried. Specifically, the will maker grants his current spouse a life estate in property, then makes his biological children from his first marriage the remaindermen.

Get a free, confidential bankruptcy evaluation. Learn More

Creating a Life Estate

Creating a life estate is subject to the laws of the state where the property is located. Generally, it requires executing a deed that includes the property’s location, size and tax parcel number. This information can generally be obtained from the city or county where the property is located. To create the actual life estate, you generally must record the name of the life tenant and signify that she “retains a life estate.” After that, you must record the identity of the person who will receive the property when the life tenant dies and say she will retain a “remainder” interest in the property.

No Remainderman

If the remainderman dies before the life tenant does, what happens next depends on several circumstances. If the original grantor of the tenancy is alive, the deed that created the life estate may allow the grantor to choose another remainderman. If the document creating the life estate does not allow the remainderman to be changed, the remainder rights generally go to the remainderman’s estate. If the remainderman has a will, it should dictate who will receive the rights to the property.

Get a free, confidential bankruptcy evaluation. Learn More
How to Establish a Life Estate

References

Related articles

How to Add a Beneficiary to a Mortgage Deed

You can allow your property to pass under the terms of your will, but you can also add your beneficiary’s name to a deed so that the property transfers directly to that person upon your death. Simply adding a beneficiary’s name to an existing mortgage deed may not be the best solution since it won’t help you avoid a potentially complicated probate process. However, you can avoid probate by adding the proper language to accompany your beneficiary’s name or, if your state allows it, executing a separate beneficiary deed, also called a transfer-on-death deed.

Real Estate Laws for Lifetime Rights to Land in North Carolina

Generally, when someone passes away and leaves you land, you can do whatever you want with the land, including selling it. However, sometimes the owner can choose to leave you with lifetime rights to the land -- a so-called life estate -- instead of giving you outright ownership, whether the goal is to keep creditors at bay or to control the way the land is transferred after you pass away. Like other states, North Carolina permits landowners to give life estates, but special rules apply to this type of transfer.

Death Without Wills & the Rights of Survivorship for a Property

While a will is one tool used in estate planning, there are other options available to ensure that your property goes to the appropriate beneficiary after your death. One of those alternatives is making your property subject to a right of survivorship. The benefit of the right of survivorship versus using a will is that the beneficiary obtains the property faster. Property and probate law operate under state law, so consider consulting with an attorney licensed to practice in your state if you want to create a right of survivorship or if you wish to determine if a right of survivorship exists on a piece of property.

Related articles

How Does a Person With a Life Estate Get Title to Property?

Life estates are a unique type of property ownership that allows different people to own land at different times. A ...

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

A person who reserves a life estate on a property deed has the right to live on and use the property until she dies. ...

Can a Life Estate Be Assigned to Someone Else in West Virginia?

A life estate grants rights to property for the duration of the holder's life. In West Virginia, as in other states, ...

What Is the Meaning of Lifetime Estate on a Deed?

A life estate is an ownership interest in real estate, governed by state law. It gives a person, called a life tenant, ...

Browse by category
Ready to Begin? GET STARTED