Life Estates

By
Real Estate Agent with Coastal Properties Group International

Inheritances can often lead to nasty family disputes. Many times a person will remarry late in life - which leads to who will inherit the family home. Often this is solved by leaving the second spouse a "Life Estate". This means that the spouse can continue living in the home as long as possible, until death. At that point, the "remaindermen" take title and thus inherit the property.

It's difficult to sell a life estate, because the term depends on the life of the person first granted the life estate. Neither is the remainder easy to sell, since the purchaser would not be able to take posession until the life estate holder dies.

Be sure you, your title company or your attorney checks thoroughly to see if a property is subject to a life estate. 

Posted by

Sharon Simms
CIPS CRS CLHMS CRB RSPS
Coastal Properties Group
CHRISTIE'S International Real Estate
238 Beach Drive NE
St Petersburg, FL 33701
www.ssimms.com    www.coastalpgi.com   www.christiesrealestate.com
(727) 898-2582    Sharon@SimmsTeam.com

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tag to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Tags:
life estate

Comments 12 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the airplane to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
795,068
David Spencer
Chicago Area Commercial-Residential R.E.
Keller Williams Team Realty
Its not funny, but I had a life estate based on a bird (a parrot). Laws don't permit such a flippant choice, but it complicates the process. Parrots can live to 80 years of age.
February 29, 2008 09:17 PM
Ambassador
2,366,571
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.
Sharon, a little old lady who lived down the street from me for years had a life estate.  She recently died in her 90's and sharp as a tack.  I think she outlived the nasty step-nephew remainderman guy, and that gave her great pleasure - all of these nasty relatives of her late 4th husband were just waiting for her to kick the bucket!  She lived even longer than a parrot!
February 29, 2008 09:59 PM
Rainmaker
536,368
Lynda Eisenmann
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co
Preferred Home Brokers

Hi Sharon,

The last time I dealt with a life-estate it was a sticky issue at best. The mom re-married (short-time only) died and left the middle-age husband the life estate. The grown kids made an offer to buy him out, they paid him (out of the proceeds) to leave, he agreed, it closed.

February 29, 2008 11:42 PM
Rainmaker
573,888
Neal Bloom
Realtor CRS-Weston FL Real Estate
Keller Williams Properties, Weston FL
Good question Sharon...never thought of that. We have many probates that take time to determine who actually owns the property or inherited it...not sure it falls near the same category. Doesn't seem to make sense to buy one if you can't own it right away,how does one buy it if they can't own it until the person dies?
March 01, 2008 06:52 AM
Rainmaker
494,449
Kevin J. May
There's probably a fair amount of them out there from the original reverse mortgages of years ago.  Excellent reminder to keep vigilant.  Thanks Sharon. 
March 01, 2008 08:35 AM
Rainmaker
908,291
Bill Gassett
Metrowest Massachusetts Real Estate
RE/MAX Executive Realty
Sharon this is interesting info. In 22 years I have never dealt with a life estate. They must not be all that common?
March 01, 2008 12:44 PM
Rainmaker
605,739
Sharon Simms
St. Pete FL - CRS CIPS CLHMS RSPS
Coastal Properties Group International

David - I hadn't heard of that one. Was part of the deal that you had to take care of the parrot?

Patricia - good for her! In her case, the life estate served its purpose - it kept the remainderman step-nephew from throwing her out - bet he wouldn't have put her in the best assisted living facility, either.

Lynda - That was an effective way to handle it. It's good for the kids that the husband wanted money more than staying in the house.

Neal - there really isn't much of a market for selling a remainder interest. Usually it's just a way of insuring that the surviving spouse can stay there as long as wanted/able but the estate goes to the heirs. Often used for second marriages. If one were to buy it, it would be probably be based on actuarial odds of life expectancy, unless a neighbor or friend knew the life estate holder had a terminal illness.

Bill - they aren't common, but neither are they rare. I've run into some of them - perhaps more here in Florida due to retirement and second marriages. None of the ones I've dealt with have involved a sale of the remainder interest, though when the life estate holder moves out to a nursing home, and the property goes to the remainder, often a child of the grantor, I have then listed and sold the property.

March 04, 2008 06:25 AM
Rainmaker
605,739
Sharon Simms
St. Pete FL - CRS CIPS CLHMS RSPS
Coastal Properties Group International
Kevin - I hadn't thought of relating them to reverse mortgages. Guess the ones I've dealt with were from before reverse mortgages became popular.
March 04, 2008 06:30 AM
Rainmaker
620,086
Randy Prothero
Hawaii REALTOR, (808) 384-5645
Island Style Realty Inc.
I have not had a life estate come up yet.  It is something that has been covered extensively in our classes, so hopefully I am prepared for it.
March 05, 2008 11:54 PM
Rainer
130,493
Billnulls Blog Florida Realty Professional
AHWD
Charles Rutenberg Realty

Sharon - I have never had to deal with this one (yet) but thanks for making me aware of it!!!

March 06, 2008 06:26 PM
Rainer
153,983
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd.

Hi Sharon,  What  a great  post.  Luckily I  haven't dealt with it  yet but THANKS for the heads up and great article.  I'll be researching it a little  more thoroughly.  Best, - Sash

March 07, 2008 11:22 AM
Rainmaker
605,739
Sharon Simms
St. Pete FL - CRS CIPS CLHMS RSPS
Coastal Properties Group International

Randy - I'm sure you're prepared for whatever comes your way.

Barbara Jo - usually the property doesn't go up for sale while the life estate is in effect, so it's unlikely to be an issue. Once the life estate holder has moved out, it's fine for the remainderman to sell the property as a normal fee simple.

Sasha - thanks. Forewarned is forearmed. 

March 07, 2008 06:13 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cat to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
605,739

Sharon Simms

St. Pete FL - CRS CIPS CLHMS RSPS
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the umbrella to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information