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).
Fair market value" will probably be determined by comparing the equity value of the property to the value of the life estate
and the amount paid.
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.