Another disadvantage to life estates and enhanced life estates is that liens against a
life tenant will attach to the
life tenant's interest and will remain attached to the real property for which the
life tenant has an interest until the death of the
life tenant or a release is obtained, even if the
life tenant conveys his or her interest.
First, if any of the children who are beneficiaries upon the death of the
life tenants (i.e., the remaindermen) were to incur a lien (e.g., through a judgment), this could be filed against the property that is subject to the life estate.
For example, if actuarial tables indicate a 15-year life expectancy for the
life tenant, a 15-year discount period would be applied to the reversionary interest of the estate.
In Melms, the court specifically held that a
life tenant is entitled to make substantial alterations in a structure or even to demolish it, absent a contractual obligation to restore the property to the condition in which it was received, "when ...
If none of the preferred beneficiaries survives the distribution date, the trust will direct the corpus to a beneficiary or a set of beneficiaries certain to exist at the
life tenant's death: one or more established charities, the persons who would be the donor's heirs were the donor to have died when the
life tenant died, or the
life tenant's heirs.
The homestead "ownership" requirement under the Florida Constitution does not restrict the type of property ownership; therefore, a
life tenant can qualify for the homestead creditor exemption with his or her life estate.
230, 237-38 (1865) (
life tenant is entitled to recover damages from third party who has committed waste on the premises, if
life tenant had paid damages to remainder holder); Hood v.
If the remainderman has no surviving descendants, the remainder fails, and on the
life tenant's death the property passes to the testator's residuary devisees or to the settlor's heirs.
Thus, as property values have soared--to the benefit of the remainder beneficiaries--the costs of maintaining the properties have also soared--to the detriment of the life tenants--with no relief in sight for the
life tenants. This situation has created significant inequities in the
life tenant and remaindermen relationships.
If the property were transferred subject to an existing mortgage with no assumption of the liability by the remaindermen, the transferor (
life tenant) would remain liable for the debt.
79-238, in which a contractual arrangement by which one sibling promised to transfer property to another sibling's children in the event the latter sibling predeceased the
life tenant or a trust was held to be a completed gift at the time the contract was entered into.
An Interest in Possession Trust (or Life Interest Trust) is one where a specific beneficiary (called the
life tenant) is entitled to the income from the trust for his lifetime and on his death the capital remaining in the trust passes to different beneficiaries.
