How is a Life Estate Created?
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Answer:
That may be accomplished by creating and recording a deed from yourself to your daughter, with a life estate retained by you, assuming you are currently the only owner. If there are joint owners, they would need to sign the deed also. In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion." For example, a parent may deed a home to a child and reserve a life estate as a way of passing the property to the child outside the probate process. This allows the parent to remain in the home while the parent is alive, with the home passing to the child/ remainderman after the life of the parent. Please see the links to the forms below.
Someone with a life estate has a right to the use of the asset in which she or he has a life estate for her or his life. The right can also exist for the life of someone else. The right extends to the use of the asset and the income from it. In the case of a farm, for example, the holder of a life estate, called a life tenant, could farm the land, sell the crops and keep the proceeds. The life tenant could also live in any house on the land. The life tenant will still be responsible for the payment of all taxes, insurance and maintenance on the farm.
A life tenant can sell or mortgage his or her life interest, but the interest sold or mortgaged is limited to the lifetime of the seller or mortgagee. Although the life tenant can sell the life estate, the buyer would have ownership rights only as long as the original life tenant lived.
