Benchmark Title Company, LLC

 

Life Estates

Sarah Holdener

A life estate is an interest in land that is limited in duration to the life of an individual – either the owner of the estate or another.  The owner if a life estate is called a life tenant.  He or she is entitled to exclusive possession of the property during the existence of the life estate, though the life tenant owes certain obligations towards the future owner of the property, also called the remainderman.

 

Ex:  Dad, a widower, remarried late in life and did not put new wife on title to his home.  In his will he leaves the residence to “New Wife for life, the remainder to my son Joe.”  This mechanism allows Dad to provide a home for New Wife for the rest of her life, while still passing the family home to his natural heir, his son.

 

Life estates may be created in a deed, but most commonly they are created in a will, as is the case in the above example.  There is no specific requirement for language, just that the intention of the grantor to create a life estate must be expressed. 

 

Some other examples of language creating life estates: 

“To X for life, the remainder to Y.” – Above example.

“To X for the life of Z, with the remainder to Y.”  -- Life estate pur autre vie (for the life of) Z, upon whose death the remainder passes to Y.

“To X, but reserving a life estate in the grantor herein.” – A life estate retained by grantor, who conveys only a remainder interest to X.

 

Why this is of interest to a title person, and could be to you for a couple of reasons: 

(1)  Both the life estate and the interest of the remainderman are alienable, meaning each can convey their interest to another party.  Each may only convey what they own, so a purchaser who buys from the life tenant only receives a life estate and a purchase who buys from the remainderman only receives the remainder interest.  However, should a purchaser acquire both the life estate and the remainder, the doctrine of merger will apply to merge the two estates and recreate a full fee estate in the purchaser.

(2)    Both a life estate and a remainder estate can be mortgaged.   

(3)    A life tenant must pay taxes on the property during their tenancy.

(4)  A life tenant may make improvements upon the land, and may do so without interference from the remainderman.  Anyone lending money for the construction of those improvements may not charge the remainderman.

 

Any questions can be directed to Benchmark Title at 618-239-3750. Please feel free to call or email:  

John Howe
President

Doreen Miller, Esq.
Commercial Division Manager

Sarah Holdener, Esq.
General Counsel,
VP Production

Michelle Null
VP Escrow Operations


Serving you from three convenient locations:

Main Office:
1124 Hartman Lane
Shiloh, IL 62221
Ph: 618-239-3750
Escrow Fax: 618-239-3707
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President: John Howe
www.benchmarktitle.net

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Fax: 618-281-9705
Manager: Randi Schur

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Glen Carbon, IL 62034
Ph: 618-288-1695
Fax: 618-288-1852
Manager: Sara Sowell

Letter from the Author, Sarah Holdener

Today is my last edition as author of the Title Tip Newsletter.
After four years at Benchmark Title, I am venturing into private practice with a firm that almost exclusively does title insurance defense litigation, defending title underwriters, agencies, and insureds when claims on title arise. 
Doreen Miller, Esq., Commercial Division Manager, will be stepping into the position of Vice President and General Counsel.  Doreen, John Howe, and Michelle Null will continue to bring you educational and insightful title tips each week.
I have really enjoyed my time at Benchmark, working with such fantastic people, and serving the local real estate community. 


 
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