life estate

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Life Estate

Real estate owned only for the duration of one's life, at which time it reverts to the original owner. The owner of a life estate, called a life tenant, has all rights associated with ownership of property except the right to sell the property. Upon the death of the life tenant, the life estate reverts back to the owner, or to a third party designated by the owner. For example, in a will, a farmer may grant ownership of his farm to his children, subject to the life estate of their mother. In this situation, the mother holds the life estate and has the right to live in the farm house for the rest of her life. A life estate may be included in one's gross estate.

life estate

The right to use and enjoy real estate for a limited time measured by someone's life— either the owner of the life estate or someone else. Often used as an estate planning tool so that elderly people can sell their property or give it to relatives,but still retain the right to continue living in it.

Example: Mary Smith, who is 85 years old, has a life estate in Blackacre, but it's for the life of 10-year-old Ashley Brown. As a result, Mary and her heirs will be able to use the property until Ashley dies, hopefully some time in the distant future.

References in periodicals archive ?
Co-owners who share interests in time (life tenants and remainderman), unlike co-owners who share present interests, may not partition life estates.
Devise and Descent, Life Estates and Remainders--The rules regarding devise and descent of transfer restricted homestead do not apply to life estates because life estates end at the death of the life tenant; thus, there is no interest for the life tenant to devise or pass along.
1) With respect to interests in land, for example, the basic forms are the fee simple, the defeasible fee simple, the life estate, and the lease.
32) There are five general types of present possessory interests: the fee simple absolute, the defeasible fee simple, the fee tail, the life estate, and the lease.
P transfers a remainder interest in the house to his children, S and D, and retains a life estate.
By setting up a qualified subchapter S trust (QSST) the ownership of S stock may be divided into a life estate and a remainder.
The court declined to extend the doctrine of acceleration to the situation of a life estate created by operation of the homestead laws.
2013, notwithstanding that such interest will not be included in the transferee's estate tax return (since, by definition, a life estate terminates at death).
When valuing life estates (or remainders), the value of the interest is determined (as of the date of the transferor's death) on the basis of recognized valuation principles.
2013-4(a) provides that, in the case of life estates, remainder interests or other limited interests in property, recognized valuation principles are to be applied as of the date of the transferor's death.
120] which held that a will settlement extinguishing intervening life estates with a nonqualifying remainder interest to charity, followed by a lump-sum cash payment to the life tenants and the charities, did not result in the disallowance of the charitable deduction.
To the life estate we might add the concept of a joint tenancy, in which each tenant (or human) "owns" the whole, but has no rights to give to heirs.