Can You Sell A House That Is In A Life Estate?

The term “life estate” describes a kind of joint ownership of real estate, such as a house.

You can sell or give your home to your children, but keep the right to live in or control the home until you die.

Who owns the property in a life estate?

A life estate deed is a legal document that changes the ownership of a piece of real property. The person who owns the real property (in this example, Mom) signs a deed that will pass the ownership of the property automatically upon her death to someone else, known as the “remainderman” (in this example, Son).

Can a life estate be revoked?

Life estates, therefore, are typically used to keep property from being transferred through the process of probate. Importantly, a life estate cannot be revoked. Therefore, once a person sets up his or her ownership of a property in a life estate, he or she cannot sell or otherwise dispose of the home.18 Oct 2013

Do you pay taxes on a life estate?

When retaining a Life Estate in the property, you are not transferring or giving the entire interest in the property away. As the owner of the property by virtue of the life estate, a life tenant may continue to deduct the real estate taxes he pays on his federal income tax return. (I.R.C. §164(a); Reg. §1.164-1(a).10 Sep 2010

Does a person with a life estate own the property?

A person owns property in a life estate only throughout their lifetime. Beneficiaries cannot sell property in a life estate before the beneficiary’s death. One benefit of a life estate is that property can pass when the life tenant dies without being part of the tenant’s estate.11 Sep 2019

What are the two types of life estates?

The two types of life estates are: conventional and the legal life estate. grantee, the life tenant. Following the termination of the estate, rights pass to a remainderman or revert to the previous owner.

What is the value of a life estate?

The value of the life estate is found by going to the Life Estate and Remainder Interest Table here. The value of the life estate is found by taking the value of the property and multiplying it by the life estate factor (a.k.a. life estate rate).23 Dec 2016

What rights does a life estate give you?

The person holding the life estate — the life tenant — possesses the property during his or her life. The life tenant has full control of the property during his or her lifetime and has the legal responsibility to maintain the property as well as the right to use it, rent it out, and make improvements to it.26 Oct 2016

What happens to a life estate after the person dies?

A life estate allows lifetime use of a home before it passes to the final beneficiaries. A “life estate” occurs when a person has a legal right to use property during life, but does not own the property outright. After the death of the life tenant, the property passes to the named beneficiaries, called “remaindermen.”