life estate


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Life Estate

An estate whose duration is limited to the life of the party holding it, or some other person.

life estate

n. the right to use or occupy real property for one's life. Often this is given to a person (such as a family member) by deed or as a gift under a will with the idea that a younger person would then take the property upon the death of the one who receives the life estate. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion." Example of creation of a life estate: "I grant to mother, Molly McCree, the right to live in and/or receive rents from said real property, until her death," or "I give my daughter, Sadie Hawkins, said real property, subject to a life estate to my mother, Molly McCree." This means a woman's mother, Molly, gets to live in the house until she dies, then the woman's daughter, Sadie, will own the property.

See: freehold

life estate

an estate of freehold that exists for the duration of the life of the grantee. If the grantee should assign his interest, that taken by the assignee is referred to as an estate pur autre vie (i.e. ‘an estate for the life of someone else’, namely the original grantee). Since 1925 a life estate can exist only as an equitable interest behind a trust.

See INSURABLE INTEREST, INSURANCE.

References in periodicals archive ?
The most common legal partitions of the complete bundle of rights in rural property are life estates, easements, and transferable development rights.
19) Situations in which a life estate is required to be valued in the transferor's gross estate include 1) where the transferor spouse transferred gross estate property in trust for a third-party life tenant, remainder to transferee spouse; and 2) where a life estate included in the transferor spouse's gross estate is on the life of a third party.
The Estate maintained that the only reasonable interpretation of James' will was that Sandra received only a life estate with James' three daughters as remaindermen.
It is important to note that the IRC section 121 exclusion will be limited, although available, in the case of a home that is transferred to a child subject to a life estate but sold during the parent's lifetime.
Smith, in considering Garner, wonder in turn whether courts in the future will defer to parties' intentions to create newer forms of property rights, in rejection of the perspective that there is only a limited number of property law forms--the "numerus clausus" principle: Donovan and Gerrish could create a life estate or a lease.
Similarly, gifts of life estates fall outside of this rule and the fair market value of the life estate is a countable asset).
Subsequently, the donor transfers a life estate to his daughter, so that all he owns is the remainder interest.
1 of the Act would apply to deem the transferor to have disposed of the life estate for its fair market value at the time of disposition, and to immediately have acquired the life estate for its fair market value at the same cost.
Retention of a life estate would give the senior greater security, especially vis a vis third parties, than the lump sum transfer which typifies the care agreement (and another benefit of pro-active questioning would be the opportunity to suggest this kind of arrangement).
On another issue, the committee said a judge, who is named a trustee of property devised to him and his wife as a life estate, can serve as trustee of that property.
Creating a Charitable Remainder Unitrust or Annuity Trust, a Pooled Income Fund, a Charitable (Lead) Trust, a Life Estate or bank deposit that eventually directs all or a portion of the principal to the Endowment Fund.