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 ?
86) Thus, courts confronted with an instrument purporting to create a "lease for life" have typically asked which common-law box best matches the grantor's intentions: a life estate or a tenancy at will.
In this case, if D predeceases C, he must include the entire trust corpus, reduced by the present value of C's life estate.
A co-owner with a life estate is able to take advantage of the SOH tax cap, as long as he or she qualifies for the homestead tax exemption.
The totality of what the dependent has been given by the deceased and otherwise has access to, such as a life estate in a home, specific inheritances, life insurance pay-outs, and monthly income will all be considered by the court to determine whether his or her share of the estate should be increased on the basis of the dependent's needs.
The sale of the Vested Remainder Interestin a Life Estate for the property located at 313 East 18th Street in Gramercy Park for $900,000 cash.
Here's the abuse they saw: Wealthy families were going to estate planners who created a life estate in their assets for their kids, followed by a life estate in the assets for their grandkids, followed by a life estate in the assets for their great-grandkids and so on.
Gifting a remainder interest requires the property ownership to be divided into two separate interests: a life estate and a remainder interest.
One other difference pertains to the usage of Life Estate Survivorship deeds.
By ensuring that the values exchanged are equal for tax purposes, any retained life estate problem is avoided.
Real estate can be given to charities via: Outright Gift, Charitable Remainder Unitrust, Charitable Gift Annuity, Retained Life Estate, Bargain Sale or Outright Bequest.
in the case of a life estate in the residential realty a retained right of possession or engagement would then exist.
But a terminable interest, such as a life estate in a trust created by someone other than the person receiving it, generally does not qualify.