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What are the dangers of a life estate?

QUESTION:

Before my wife died, we had the title to our home transferred to give us a life estate. We wanted our only daughter to get the property after both of us died. I can no longer afford to keep up the house. I want to sell the house and buy a condominium, but my daughter refuses to sell. I am broken-hearted and I don’t understand why I can’t sell my own house. Is there anything I can do?

ANSWER:

A life estate is an interest in real estate which lasts only as long as the lifetime of the person holding it. A life estate’s duration may also be tied to the lifetime of one or more persons other than the holders.

The person or persons who hold the life estate are known as the life tenants. In a standard life estate, the life tenant’s interest in the land ends when the life tenant dies.

During the life tenant’s life, he has an immediate and present right to possess and use the property.

At his death, depending on the language in the deed, the property will revert to the grantor or the grantor’s heirs (this is known as reversion) or the property will pass to the person named in the deed to succeed the life tenant (remainderman).

Upon the death of the life tenant, the remainderman acquires the entire interest in the real estate. During the life tenant’s life, the remainderman has only a future interest. This future interest is one that will entitle the remainderman to the possession and use of the property but only at some future date.

As a general rule, the life tenant can sell, lease, or mortgage his interest unless the deed specifically restricts such rights.

The problem, however, is that anyone who acquires a life tenant’s interest will have that interest only as long as the life tenant lives. The interest acquired is terminated upon the death of the life tenant.

Therefore, in order to sell or mortgage a full, 100 percent interest in your house, it is necessary that you (the life tenant) and your daughter (the remainderman) sign the documents needed to sell or mortgage the property.

Depending upon the particular facts and circumstances of your situation, you may be able to obtain relief through the court system. A court-ordered sale of the property would force your daughter’s cooperation. However, the court could also order a division of the sales proceeds depending upon an evaluation of your respective interests. There would be costs for both of you associated with this solution. Why not discuss it with your daughter again?

This information is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.

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