life tenant

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Related to Life Tenants: life estate, Life tenancy

Life Tenant

One who holds a life estate. A life tenant has all rights associated with ownership of real property, except the right to sell the property, until his/her (or someone else's) death. Upon the death of the life tenant, the property 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 is the life tenant and has the right to live in the farm house for the rest of her life. A life tenancy may be included in one's gross estate.

life tenant

A person entitled to the use of or the income from an asset during his or her lifetime. As an example, a person may stipulate in a will that all of his or her assets are to go to a charity but that the surviving spouse, designated as life tenant, is to have the use of the income from the deceased's estate for his or her lifetime, following which the remainder of the assets in the estate are to pass to the charity.

life tenant

One who has a life estate in a property, being the right to enjoy the property for a period of time measured by that person's life or some other designated person's life.The rest of the bundle of rights is called a reversion or remainder interest. Life tenants may sell, gift, or will their property to another, but when the defining life comes to an end, so do the rights of those other people.At that point,the remainderman may take possession of the property and enjoy it fully.

Example: Aunt Esther, who is 80 years old, sells her farm to Acme Agribusiness. She retains a life estate, measured by the life of her 40-year-old nephew, Mark. Esther dies two days later, with a will that leaves everything she owned to Texas A&M University. Mark has no rights in the property; he's just a measuring life. Texas A&M may use the farm until Mark's death, at which time it will pass to Acme Agribusiness.

References in periodicals archive ?
36) Indeed, like so many of his generation, Merryman was troubled by the decision in Brokaw precisely because of the court's failure to consider the compelling change in circumstances that the life tenant pointed to as a justification for the proposed demolition of the Brokaw mansion and its replacement with a modern apartment building.
Fairchild, (41) to employ a relatively strict rule for deciding ex ante whether a life tenant can make a drastic change in the use of the property subject to a life estate.
50) This New York statute allows a life tenant with a life expectancy of at least five years or a tenant under a lease with an unexpired term of at least five years to apply to a court to alter or replace an existing structure and provides that the court should grant approval if the proposed alteration or replacement is one that a prudent owner would make, it would not reduce the market value of the reversion, the tenant provides security to assure completion of the project and protect the reversion holder from being responsible for its cost, and the proposed alteration or replacement does not violate the terms of any agreement regulating the tenant's conduct.
In short, we expect the future interest holder to allow the possessory interest holder--the life tenant, tenant for years or mortgagor--to make improvements and alterations in the subject property or to be able to repair or rebuild it, as long as these actions do not cause long term harms or risks to the future interest holder.
Taken together, these statutes require the life tenant to pay:
Further, if the costs of the life tenant are becoming too burdensome, and if there are not additional estate planning benefits to depleting the surviving spouse's assets, then cooperative families may make adjustments for one another.
Moreover, if the property is rented, then the life tenant will lose the "save our homes" tax benefits, further inflating the burden of continued ownership.
It appears the life tenant and remainder beneficiaries could agree to one of two outcomes: 1) split the proceeds from the sale based on actuarial values of life and remainder interests or 2) hold the proceeds in a trust that pays all the income to the surviving spouse.
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 set of alternative remainder interests would still control the distribution of corpus, but only to the extent that the life tenant does not exercise the power.
6) As a practical matter, the distribution date usually occurs when the life tenant dies.
In the real world, cases like Krooss,(83) Bomberger,(84) Lawson,(85) Gustaison,(86) and Cox(87) demonstrate that future interests to which section 2-707 would apply arise in much more complicated trusts, and are usually contingent on multiple events, such as the life tenant and perhaps other remainder beneficiaries dying without issue.