Life Estates

Life estates have become an important, if sometimes little-used, tool when planning for inheritance of property. Although provision for such arrangements was not available in early common property law, their use has since become widespread.

Arranging Inheritance

A life estate is a useful way of ensuring that the inheritance of your property occurs in the way in which you would like. It is most frequently used by couples who wish to pass down property after their death. In its most basic terms, when someone has a life estate in a piece of property, almost all of the rights to that property are conveyed upon them, with a few fundamental exceptions. In contrast to simple ownership of the property, however, the 'life tenant' possesses these rights only until their death. They are a tenant, therefore, because the term of their control of the property is fixed.

In most cases, the property in question is a house and its contents. A life estate, or life tenancy, gives the current owner of the property the opportunity to stipulate the details of two stages in the process of succession of the property, rather than the one stage that they would have control over if they simply left it to an individual in a will.

One of the most common circumstances in which a life estate might be established occurs when an individual is widowed or divorced, and subsequently remarries. Imagine, for example, that it is decided that the widow or widower's new husband or wife will sell their own property and move into the formers house. The widowed individual wishes for his or her own children to ultimately inherit the property, as it was their original family home. However, they also wish for their new spouse to continue to have somewhere to live if they were to outlive the first individual. In this case, a life estate would be very useful. The new spouse could become a life tenant, enjoying almost all of the rights to the property; but this arrangement would only last until the new spouse's death, at which time the property would be passed to the children of the widow or widower. In the time that the new spouse is still alive, therefore, they would take on the responsibility of ensuring that the property remains in a similar state to that in which it was left by the widow or widower, and would be legally prevented from selling it.

Process

A life estate can be created in a number of different ways, the most popular being a stipulation in a will. While they are a very useful legal function they can, however, prove difficult to arrange; the legal detail of a life estate must be clear and correct and, as such, it is always advisable to take the advice of a solicitor, rather than attempting to carry out the process yourself. Similarly, the arrangement itself can cause friction within families, as the family of the life tenant sometimes consider it to be a personal snub. Consequently, such matters must be treated with great care.

When arranging a life estate, however, you should remember that the property being passed down is yours and, as such, you should be free to do as you please with it without unwanted influence from third parties.