SC Estate Attorney A – Z: Life Estate
June 28, 2012
The life estate, or, an estate per autre vie, is at common law and from statute the ownership of land for the duration of a person’s life. In legal terms it is an estate in real property that ends at death, at which time there is either a “reversion” to the original owner, or an automatic conveyance to a remainderperson. The owner of a life estate is called a “life tenant”.
A life estate has its uses in estate planning. It can be used to allow the life tenant to continue to reside in a residence for the remainder of their lifetime, without easily allowing for the sale of the property by the life tenant. It is difficult to sell a life tenancy because the life tenant can only sell that which they actually own, which is the right to own a property for life. Most persons would not want to purchase such an interest in land.
A life tenancy can also potentially be utilized in medicaid planning, where a person who anticipates having expensive long term care needs in the future could simply own a life estate in their property, which is considered an exempt interest for the purposes of medicaid.
As with all estate planning techniques, the use of a life estate should occur under the supervision of an attorney. Mistakes can be costly, and while life estates have their benefits, they also have their consequences, such as a loss of control over a property, and potential disputes over the responsibility to repair, maintain, and improve a property.
Like any decent lawyer, I need to add a disclaimer here: unfortunately, it is impossible to offer comprehensive legal advice over the internet, no matter how well researched or written. And remember, reviewing this website and my blogs doesn’t make you a client of my Firm. The rules regarding retirement accounts do change, are highly fact specific, and errors can be extremely costly. Before relying on any information given on this site, please contact a legal professional to discuss your particular situation.
