Life estate
|
|
A life estate, at common law is an estate in real property that ends at death. Although it is technically a tenancy (the holder is called a life tenant), it is treated the same as a fee simple with respect to the constraints upon its use for the duration of the estate.
Since it ends at death, and the owner of the life estate cannot leave it to his heirs or convey a larger interest in the land than what the owner actually owns, a life estate is not an estate of inheritance. Life estates are measured either by the life of the owner of the estate, or by the life of some other person; these latter are called life estates pur autre vie, Law French for "during someone else's life." A life estate pur autre vie is most commonly created in one of two circumstances.
- First, when the owner of property conveys his interest in that property to another person, for the life of a third person. For example if Joey conveys Blackacre to Rachel during the life of Monica, then Rachel owns the land for as long as Monica lives; if Rachel dies before Monica, Rachel's heirs will inherit the land, and will continue to own it for as long as Monica lives.
- Second, if Joey conveys Blackacre to Monica for life, Monica can then sell the life estate to Rachel. Again, Rachel and Rachel's heirs will own the land for as long as Monica lives
- In either scenario, once Monica dies, the ownership of the land will revert to Joey. If Joey has died, ownership will revert to Joey's heirs. The right to succeed to ownership of the property upon the expiration of the life estate is called a remainder.
The early common law did not recognize a life estate in personal property, but such interests were cognizable in equity. Thus, although life estates in real estate are still created today, the life estate is more commonly used in trust instruments, typically in an attempt to minimize the effect of the inheritance tax or other taxes on transfers of wealth.