life estate

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Related to Life tenancy: life tenant, life estate

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 ?
196, a spousal lifetime income interest did not fail to qualify for the TPT credit by virtue of terminating on remarriage; instead, the contingency was required to discount the value of the life tenancy.
For example, if the decedent's child has a term certain interest in the split-interest trust, the reformation cannot convert the child's interest to a life tenancy.
A noncharitable life tenancy not expressed in a fixed dollar amount or fixed percentage is not reformable un less a judicial reformation proceeding is commenced within 90 days of the estate tax return (ETR) filing deadline (including extensions) if an ETR filing is required, or the trust's first income tax return filing deadline if no ETR filing is required (the 90-day deadline).
Grainger also extended its interest in the life tenancy market, where home owners sign over a part or all of their home in return for income during their lifetime.
It bought 917 life tenancy agreements for pounds 40.
The Newcastle-based company - the UK's biggest listed landlord - has bought a portfolio of 917 life tenancy interests from NPI Ltd.
Life tenancy agreements allow home owners to sign over a part of or all of their home to a company in return for income during their lifetime, living rent-free and having security of tenure.