Life Estate Ownership

In this post, we’ll be discussing life estates and how they are created!

We’re continuing our discussion of different ways that you can own real estate property by going over life estates in this post. Click HERE for an overview of the different ways you can hold title. Remember that the term “holding title” means to legally own something. Now let’s dive into life estates!

A life estate is when someone owns property only for the duration of their life. The person who owns a life estate is called the “life tenant.” This type of ownership is specified in the granting deed by stating that the new owner owns the property for the duration of their life. Click HERE to learn more about the different types of deeds that can be used to convey property. Remember that deeds are used to show a conveyance of property into someone’s name. Deeds creating a life estate will also name who will own the property once the life tenant is no longer living. This person is called the “remainderman,” and ownership will pass automatically to the remainderman upon the death of the life tenant.

For example, let’s say that Oliver owns all interest in a farm. He conveys all of his interest in the farm to his sister Ashley for the duration of her life, and specifies that this interest will go to Ashley’s son Brandon upon her death. While Ashley is alive, as the life tenant she is responsible for maintaining the farm. After 10 years, Ashley passes away, and upon her death all of her interest in the farm automatically passes to Brandon. Brandon is now the sole owner of the farm, and the life estate interest Ashley previously owned is terminated.