Having a life estate, or life interest, in a property means that someone has the right to use and possess that property for the duration of his or her lifetime. Upon their death, the life estate passes on to another individual or entity. This is a type of interest or estate that is recognized in a legal setting and often used to protect the property from future creditors.
Life Estate vs. Ownership
It’s important to remember that having a life estate does not make a person the property’s owner, or provide them the same protection that a traditional owner would have. Rather, life estates are designed to grant individuals a legal right to use and possess the property for the duration of their lifetime, with the understanding that the life estate will ultimately return to the rightful owner of the property. It’s also important to note that the property in question typically reverts back to the owner of record following the death of the life estate holder.
Life Estate Holder Rights
Generally, the life estate holder has the right to receive any income produced from the property or receive any profits from the sale of the property. The holder of the life estate is also responsible for the expenses associated with the property, such as taxes, maintenance, and repairs. The life estate will not be affected by any liens or judgments that are imposed on the property or the owner of record, though any creditor will still be able to file a claim against the life estate.
Modern Uses for Life Estates
In modern times, life estates are commonly used in long-term estate planning. This type of estate is ideal for those who want to retain the use and possession of their property while providing for another individual to benefit from the property’s income posthumously. Life estates are generally considered to be revocable trusts, meaning that the owner of the estate can change their mind and revoke it at any time prior to their death.
Life estates are also used in cases of senior citizens who choose to pass on their property in various ways. For example, a senior who has life estate rights in their property could sign the deed of the property to their adult child, while simultaneously granting themselves a life estate. In this case, the senior would have the right to use and possess the property as long as they live, while their adult child would acquire ownership upon the senior’s death.
Understanding Life Estates
When it comes to legal terms and concepts, it pays to spend a little time brushing up on the details. In the case of life estates, it’s important to understand how this type of interest works and the rights bestowed upon the holder of the life estate. Having a clear understanding of life estates and how they can be used to protect the property of a loved one can help make the estate planning process more efficient and stress free.