LLG Blog

Monday, November 23, 2015

What is a Life Estate?

What is a Life Estate?

A life estate is a special designation in probate law referring to a gift to a family member that lasts as long as the life of the recipient. If an individual uses a life estate as part of his or her estate plan, whatever is bequeathed under the life estate will revert back to the residual estate upon the death of the life estate recipient. It is most common in scenarios where an individual starts a new family without children later in life and wants to ensure that the present spouse is taken care of for the remainder of her or his life. The owner of a life estate is called a life tenant. A life estate is often used as an alternative to a trust because it provides the life tenant with more control over the transferred asset.

A life tenant may treat an asset as his or her own. A home may be rented to tenants for income. The life tenant may sell his or her interest in the property to the heirs of the residual estate or to third parties. If the property is sold to a third party, that third party must surrender the property to the residual heirs upon the death of the life tenant.

Though the property belongs to the life tenant, the life tenant has a duty to the residual heirs to keep the property reasonably maintained and in good condition. He or she has an obligation to avoid mortgage arrearages and tax liens while in possession of the property. Exploiting natural resources on the property may be restricted during a life tenancy. A life tenant may not bequeath his or her interest in a life estate through a will because that interest immediately terminates upon the life tenant’s death. Significant changes to the property need to be agreed upon by all parties.

Though there are benefits, there are also drawbacks to establishing a life estate as part of an estate plan. The action could create estate tax issues for the tenant’s estate. In addition, creditors of the tenant may attach liens on the property, creating complicated legal issues for the heirs of the residual estate.


Archived Posts

2023
2021
2020
2019
2018
2017
2016
2015
December
November
October
September
August
July
June
May
April
March
January
2014
2013


Littorno Law Group assists clients throughout Contra Costa County from our offices in Pittsburg, Pleasant Hill and Rancho Bernardo, California, including Antioch, Brentwood, Clayton, Concord, Lafayette, Moraga, Martinez, Danville, San Ramon, Pleasanton, Livermore, Fremont, Oakland, Piedmont, San Diego, San Mateo, Escondido, San Marcos, Vista, Oceanside, Carlsbad, Fallbrook, Bonsall, Encinitas, La Jolla, Poway, Rancho Bernardo, Del Mar, and the surrounding areas and suburbs.



© 2023 Littorno Law Group | Disclaimer
2211 Railroad Ave, Pittsburg, CA 94565
| Phone: 800.689.4211 | 925.432.4211
16935 West Bernardo Drive, Rancho Bernardo Courtyard, #100 East Lobby, San Diego, CA 92127
| Phone: 800.689.4211 | 760.525.3140
3478 Buskirk Avenue, #1000, Pleasant Hill, CA 94523
| Phone: 800.689.4211 | 925.937.4211
1900 S. Norfolk, Suite 350, San Mateo, CA 94403
| Phone: 800.689.4211

Estate Planning with Revocable Living Trusts | Trust Administration | Probate Estate Administration | Elder Law and Medi-Cal Planning | Veteran's Benefits | Prepaid Legal Plans | Advanced Estate Planning | Planning for Children | Estate Litigation | IRA Beneficiary Trusts | Littorno Law Trust Maintenance Program | Estate Tax Planning | Estate Planning/Non-Traditional Families | Pet Trusts | Contact | Staff | Library

FacebookLinked-In Company

Law Firm Website Design by
Amicus Creative


Make a Payment