For tax purposes, the Life Tenant has an Interest in Possession. This is a right to live in a property, sometimes for life, but more often for a shorter period. Such trusts will often end when the beneficiary leaves the property for whatever reason, or remarries.
Is a life estate marital property?
If the life estate was given to the couple, it would be included in the marital estate. If the life estate was created by a spouse from property acquired during the marriage, it is not separate property and must be included in the marital estate.
What happens to the property when a life tenant dies?
Once the death of the life tenant (or another party, in the case of a life estate pur autre view) ends the life estate, the property will go back to another party, usually someone named in the same conveyance that created the life estate. This party, the “remainderman,” holds a real interest in the property known as a reversion.
Can a remainderman file a lien on a life estate?
If the remainderman finds themselves in financial trouble, creditors may be able to file a lien on the property, which would create a tough situation for the life tenant. And don’t forget, the life tenant is still responsible for making property tax payments and maintaining insurance as if they still own the property outright.
Who is the remainderman for a life tenancy?
When somebody is given life tenancy, the person giving the life tenancy is also required to identify a remainderman. The remainderman is the individual who receives the real estate when the life tenant dies. Can A Life Tenant Sell?
Can a life tenant use a real estate property?
Life tenants typically may use the estate property during the duration of their life estate, but may not take any action that will damage the property for future owners. Those with specific questions about life estates or life tenant rights should contact a real estate professional.
