Beneficial Lifetime Rights in Life Estates

Written by erika johansen
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Beneficial Lifetime Rights in Life Estates
Life estate tenants must take care of the property. (tea estate image by Kirubeshwaran from Fotolia.com)

Life estates are a type of ownership that extends only for the lifetime of the individual in possession, known as the life tenant. The life tenant holds the estate until he dies, and then ownership returns to another party. Life tenants do not have the right to unlimited use of the property. Parties with specific life tenancy questions should consult an attorney.

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Life Estate Creation

A party creates a life estate by transferring property using language such as "To Mark for his lifetime." The transferring instrument should contain any conditions or restrictions on the life tenant's rights; often, transferring instruments stipulate that the life tenant cannot transfer any portion of the life estate to another. Transferring parties may also create an estate known as a "life estate pur autre vie," which is a life estate with a duration based on the lifespan of someone other than the life tenant. For example, such a transfer might read "To Mark for Rachel's lifetime."

Reversion

Unless the transferring instrument says otherwise, life tenants can typically use the life estate property for any purpose, including profitable use. However, at the death of the life that measures the life estate, the property will revert to another party. This party, known as the remainderman, holds future ownership rights in the property by virtue of his reversionary interest. Therefore, the life tenant can only use the property to the extent that it does not impair the remainderman's rights.

Negligent Damage

Life tenants have a duty to keep the life estate property in good condition, both physically and financially. This duty includes necessary upkeep and maintenance on the property (both land and buildings.) The tenant must also pay any taxes or other government assessments on the property. In the typical life estate arrangement, should the property be mortgaged, the life tenant pays the mortgage interest while the remainderman pays the principal. Life tenants do not have a legal duty to obtain any sort of insurance on the property.

Intentional Damage

Life tenants cannot remove any sort of natural resources from the life estate property unless the transferring instrument gives them permission to do so. Such unauthorised removal is termed "affirmative waste," and the law considers it an injury to the remainderman. However, the common law in many jurisdictions recognises certain exceptions to this rule: when the property has always been used for such exploitation of resources, when the land is useful for nothing else, or when the tenant removes the resources in order to maintain the land.

Property Improvements

Unless the life tenancy transfer says otherwise, life tenants do not need to improve the property or produce any sort of profit from the property. In early life estate law, when tenant actions increased the property's value, this was termed "ameliorative waste," and the remainderman could sue for the changes despite the increase. Now, however, ameliorative waste renders the life tenant liable only if the remainderman objected to the action, or if the value of the remainderman's interest somehow decreased due to the change.

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