A Life Estate is an interest in real property that terminates upon the death of a specified person, usually the owner of the Life Estate. There are some terms that are unique to life estates. The owner of a life estate is often called a “life tenant.” The life tenant has the right to reside in the home for life or for so long as he or she may choose. Upon the termination of the life estate the persons who obtain full fee simple ownership of the real property are called “remaindermen.” A life tenant may live in the property but cannot sell it without the consent of the remaindermen. A life tenant must respect the property and do nothing that would decrease its value.
A life Estate is usually created by use of a deed that specifically reserves the life estate. The deed also can specify the conditions upon which the life estate is granted. A life tenant may have the responsibility for maintenance, taxes, insurance and other costs connected with the property for so long as he or she resides there.
One benefit of a life estate is that it allows a person—often an elderly person—to sell their home (usually to a family member), generate cash to live on and still reside in the home for life.