A life estate is an ownership interest in a piece of property, like a house or a condo, that lasts for the life of a named person, but ends on that person’s death. In most places, a person who holds a life estate (the life tenant), has the right to do anything with the property that a full owner could do during his or her life. Unless otherwise provided by the governing document, the life tenant need not live in the property and use it as his or her home but can rent it out full or part-time or even sell the life interest in the property. The rental or sale agreement can’t be for a time longer than the life of the life tenant, since the life tenant only owns an interest during his or her life.
Unless otherwise provided by the governing instrument, the holder of the life estate is responsible for paying taxes, maintaining the property in good repair, and not permitting it to suffer any “waste” or other damage. As long as the life tenant fulfills these duties, no other owners have a basis to complain.
With a life estate, someone owns the remainder of interest in the property. (This person is sometimes called the remainderman.) That means that after the person with a life estate dies, the owner of the remainder of interest will own the full interest in the property. If the owner of the remainder interest is concerned about the use of the property, for example, that renting might result in damage and a loss of value, the owner of the remainder interest can always try to negotiate to buy the life estate and regain full ownership while the life tenant is still alive.
Contact Young & Young Attorneys to establish a life estate for your property