What is a Life Estate?

/ July 9, 2012

Every now and again a client will ask for a life estate to be created; however, most often the client does not understand what exactly it is, how it is created or the potential benefits and pitfalls of creating such an estate. In this post, I will attempt to give a basic overview of a life estate, explain how one is created, and what the general purposes of a life estate are.

Life Estate

Lady in a Field - iStockA life estate is a type of ownership of land for the duration of a person’s life. A life estate ends at the death of the owner and then the land goes to whoever has a remainder interest in the land. The owner of a life estate called a life tenant. The owner of the remainder interest is called the remainderman.

Although the ownership of a life estate is limited in duration since it ends at the death of the life tenant, the life tenant has the right to enjoy the benefits of ownership of the property, including income derived from rent or other uses of the property, during his or her possession. However, the life tenant cannot sell the property because the tenant cannot give a greater interest than he or she has, so would be unable to convey complete ownership to another person.  As for the remainderman, he or she has no ownership interest in the property and has no right to possess or use it until the life estate ends.

However, the remainderman can:

  • sell his or her interest in the property even before the life estate interest terminates if allowed by the legal instrument establishing the life estate interest. In such cases, the life estate owner will still retain the life estate interest until the life estate terminates.
  • sell the property with the permission of the life estate owner.

Since this type of ownership is a temporary one, the life tenant cannot leave the land to heirs or devisees. Instead, the property automatically is transferred to the remainder interest owner.


There are a few ways to create a life estate:

  • when a person with property rights in real property transfers a remainder interest in the property to another and retains a life estate interest in the property; or
  •  when a person purchases a life estate interest in someone else’s property; or
  •  by operation of law.

Purposes of a Life Estate

A life estate is a tool used in estate planning for a few reasons.  First, it provides for a means for helping to avoid probate because it ensures that the person with the remainder interest will automatically receive title to the piece of property and thereby would not have to go through probate to become the owner. Another reason for creating a life estate is when there may be medical assistance concerns. As discussed in Jamie Held’s previous post on Medical Assistance & Real Property, if a homeowner does receive medical assistance, then a lien could be placed on the home for the value of the services the homeowner receives. By creating a life estate for the homeowner in the property, then value of any medical assistance lien could be much less since the life estate would not be worth as much as the entire piece of property.


While all of these reasons may sound appealing for creating a life estate, as with most tools, there are some disadvantages. The first being that upon creating a life estate, the grant to the remainder person becomes irrevocable. Second, it does involve a few steps to create a life estate and therefore there is some expense involved. And finally, specifically if the driving force is due to medical assistance, there is no absolute certainty that the rules that govern medical assistance could be changed and therefore expose the entire piece of property to medical assistance liens.

As always, for more details and particulars, be sure to contact an estate planning attorney in your area. If you do have medical assistance concerns, then contacting an elder law attorney would be the best place to start.

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