- What is a life deed?
- Who owns the property in a life estate?
- Can a life estate deed be changed?
- What are the benefits of a life estate?
- Does a person with a life estate own the property?
- What are the two types of life estates?
- Is a Remainderman an owner?
- Can a life estate be terminated?
- What is a life estate interest in real property?
- What happens to a life estate after the person dies?
- What rights does a life tenant have?
- Do you pay taxes on a life estate?
- Can Remainderman sell property?
A life estate deed is a special deed form that allows a property owner to use the property during life and transfer the property automatically at death.
As discussed in How to Avoid Probate of Real Estate, a life estate deed is a popular estate planning tool.
What is a life deed?
A life estate deed is a transfer of the ownership of the real property that is the subject of the deed to one or more persons (the “remainderman”), while retaining ownership of a life estate in the property by the person(s) transferring the property (the “life tenant”).
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 deed be changed?
Unlike a Lady Bird Deed, once a life estate has been granted, it can’t be undone without the consent of the remainderman.
What are the benefits of a life estate?
Benefits of a Life Estate
- The right to live in the home until death;
- Maintaining a $250,000 capital gains exclusion provided you resided in the home two (2) of the last five (5) years;
- The right to keep a portion of the sale proceeds of the house if it is later sold;
- The right to rental income;
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.
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.
Is a Remainderman an owner?
Remainderman Law and Legal Definition. Remainderman is a term used in property law to refer a person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. A remainderman holds an interest in the remainder and will become its possessor at some future time.
Can a life estate be terminated?
Due to this termination, a life estate holder cannot transfer his or her interest in the property through a will. 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.
What is a life estate interest in real property?
A life estate is a form of joint ownership that allows one person to remain in a house until his or her death, when it passes to the other owner. In a life estate, two or more people each have an ownership interest in a property, but for different periods of time.
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.”
What rights does a life tenant have?
An individual receives life rights to occupy or otherwise use a property as long as they live. The life tenant has every right to enjoy the property as a standard owner would, other than the fact that they cannot sell or transfer the property, or obtain a mortgage on their own.
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).
Can Remainderman sell property?
Yes, the remainderman was legally able to sell/transfer his interest in the real estate without your consent. Of course, the buyer/grantee takes title subject to your life estate, meaning your life estate still exists.