Explanation of Life Estates

Life estates are limited interests in real estate. The person with a life estate has the right to live in the property, use it and enjoy it for as long as he lives. It’s a temporary ownership until the holder of the life estate dies. The property then reverts to the grantor of the life estate or to someone else, who can then dispose of the property or hold on to it.

Duration of Life Estates

There are two ways in which the duration of life estates is determined: the life of the estate holder or by order of the court. Under normal circumstances, life estates last as long as the person is alive. If he or she destroys the property, devalues it or fails to maintain it, a court can rule that the estate be transferred back to the grantor.  

Common Uses

One of the common uses of life estates occurs when elderly parents want to live in the property but still transfer it to children or grandchildren upon death or transfer to a nursing home. Life estates are also used between spouses, when one grants a life estate to the surviving spouse to ensure that he or she can remain on the property. It’s also used to keep the property out of probate. There’s no need for a probate battle because the life estate reverts to the grantor, or it is automatically transferred to a remainderman (someone other than the grantor).

Estate planning attorneys know how to create life estates, and you should consult one for your situation.  

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