Life estate - wikipedia Life estate Property law Part of the common law series Types Real property Personal property Acquisition Gift Adverse possession Deed Conquest Discovery Accession Lost, mislaid, and abandoned property Treasure trove Bailment License Alienation Estates in land Allodial title Fee simple Fee tail Life estate Defeasible estate Future interest remainder Concurrent estate Leasehold estate Condominiums Real estate Conveyancing Bona fide purchaser Torrens title Strata title Estoppel by deed Quitclaim deed Mortgage Equitable conversion Action to quiet title Escheat Future use control Restraint on alienation Rule against perpetuities Rule in Shelley 's Case Doctrine of worthier title Nonpossessory interest Easement Profit Usufruct Covenant Equitable servitude Related topics Fixtures Waste Partition Practicing without a license Property rights Mineral rights Water rights prior appropriation riparian Lateral and subjacent support Assignment Nemo dat Quicquid plantatur Conflict of property laws Blackacre Security deposit Other common law areas Contract law Tort law Wills, trusts and estates Criminal law Evidence In common law and statutory law, a life estate is the ownership of land for the duration of a person 's life. In legal terms it is an estate in real property that ends at death when ownership of the property may revert to the original owner, or it may pass to another person. The owner of a life estate is called a `` life tenant ''. In the combined jurisdiction of England and Wales since 1925 a freehold estate intended to be ' held ' as a life interest takes effect only as an interest enjoyed in equity, specifically as an interest in possession trust. The other type of land ownership is leasehold and although most long leases are for a period of between 99 and 999 years ' leases for life ' will be interpreted in often unpredictable ways as either as a licence or a lease. Contents 1 Principles 2 Uses of a life estate 3 Duration of a life estate 4 Validity of a life estate 4.1 At law and in equity ( US ) 4.2 At equity ( England and Wales ) 4.3 Torrens Title Jurisdictions 5 References 6 See also Principles This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. ( July 2015 ) The ownership of a life estate is of limited duration because it ends at the death of a person. Its owner is the life tenant ( typically also the ' measuring life ' ) and it carries with it right to enjoy certain benefits of ownership of the property, chiefly income derived from rent or other uses of the property and the right of occupation, during his or her possession. Because a life estate ceases to exist at the death of the measuring person 's life, the life tenant, a temporary owner, may short - term let but can not sell, give or bequeath the property indefinitely ( including assuming it could pass to heirs ( intestate ) or creating a purported document leaving it to devisees ( testate ). A life estate pur autre vie ( Law French, `` for the life of another '' ) is held for the rest of the lifetime of a person who does not hold the estate. This form of life estate arises where a life tenant has disposed of the property, assuming such a disposal does not trigger any special forfeiture under the life interest instrument. It also arises where the grantor chooses to make the measuring life that of someone other than the life tenant 's life. A life estate pur autre vie is most commonly created in one of two circumstances. First, when the owner of property conveys his interest in that property to another person, for the life of a third person. For example, if A conveys land to B during the life of C, then B owns the land for as long as C lives ; if B dies before C, B 's heirs will inherit the land, and will continue to own it for as long as C lives. Second, if A conveys land to C for life, C can then sell the life estate to B. Again, B and B 's heirs will own the land for as long as C lives. In either scenario, once C dies, the ownership of the land will revert to A. If A has died, ownership will revert to A 's heirs. The right to succeed to ownership of the property upon the expiration of the life estate is called a remainder. The remainder interest may be granted to a third party ( A to B for life, with a remainder interest in C ), or it may remain with the grantor. A clear distinction should be made with an estate for ( a ) term of years, interpreted as lease or licence. At death, assuming no mis - dealings to certain innocent purchasers, the property involved in a life estate falls into the ownership of the remainderman ( pl. remaindermen ) or reverts to its grantor ( all of which confusingly can be called ' reversions ' and ' reversioners ' ). There is a small market for reversions in real estate, which necessitates a buyer to carry out enhanced documentary due diligence and physical checks. A land owner of an estate can not give a `` greater interest '' in the estate than he or she owns. That is, a life estate owner can not give complete and indefinite ownership ( fee simple ) to another person because the life tenant 's ownership in the property ends when the person who is the measuring life dies. For instance, if Ashley conveyed to Bob for the life of Bob, and Bob conveys a life estate to another person, Charlie, for Charlie 's life ( an embedded life estate ), then Charlie 's life estate interest would last only until Charlie or Bob dies. Charlie 's life interest or pur autre vie interest ( interest for the life of another, whichever has applied ) and most often the remaining rights of ownership in the property ( the ' reversionary interest ' ) devolve to the persons under the terms of the will / rules of intestacy / declaration of trust / trust deed ( UK ) or will / rules of intestacy / ' grant or deed of life interest ' ( or similar ) ( U.S. ) in remainder or revert to the original grantee, depending on terms of Ashley. Such a life estate in the U.S. can also be conveyed for the life of the grantor, such as `` A conveys X to B until A dies '' and in the UK by trust transferring upon trust or assigning rather than conveying X. If a life tenant purports to transfer the underlying ' reversionary ' interest, which a life tenant never has, this constitutes an actionable breach of trust for damages and may constitute criminal fraud however may not entitle the ultimate reversioner ( or substituted beneficiaries ) to be able to obtain a court declaration that the property is their own if that property is in the hands of an innocent purchaser for value without notice ( bona fide purchaser ). Financial and physical responsibility falls to the life tenant under the legal doctrine of waste, which prohibits life tenants from damaging or devaluing the asset. In short, as the life tenant 's ownership is temporary, failing to maintain or reasonably protect the asset resulting in its diminution in value, or indeed, destruction constitutes a cause of action for the reversioner. A further limitation is the rule against perpetuities in many states and countries which prohibits long - running pre-19th - century style successions of life tenancies and may result in the premature and compensation - entitling termination of such successive life interests. In England and Wales this is fixed at one lifetime, or 80 years whichever is longer. Selling property while keeping a life estate is commonly known in France as `` viager '' where it is used more often than elsewhere, most famously in the case of Jeanne Calment the longest lived human ever recorded. Uses of a life estate In the United States, a life estate is typically used as a tool of an estate planning. A life estate can avoid probate and ensure that an intended heir will receive title to real property. For example, Al owns a home and desires that Bill inherit it after Al 's death. Al can effectuate that desire by transferring title to the home to Bill and retaining a life estate in the home. Al keeps a life estate and Bill receives a vested fee simple remainder. As soon as Al dies, the life estate interest merges with Bill 's remainder, and Bill has a fee simple title. Such a transfer risks the small risk of a fraud on the part of beneficiary Bill if he could easily show in a particular jurisdiction an unfettered fee simple, selling the estate prematurely to an innocent purchaser such as when Al is on vacation but makes the use of a will unnecessary and eliminates the need to probate the asset. A second disadvantage to the grantor is that provision for any remainderman ( or men ) ( party C ) is irrevocable without the remainderman 's consent. `` Beneficiary deeds '' have been statutorily created in some states to address this issue. The intestacy laws of certain American states, such as Arkansas, Delaware, and Rhode Island limit the surviving spouse 's rights ( inheritance ) to the deceased spouse 's real estate to a life estate. Louisiana applying an itemised ( civil law ) code has alike default provisions for succession, called usufruct. The intestacy laws of England and Wales from 1 October 2014 provide for £ 250,000 ( or the whole non-joint estate if less ) and 50 % of any excess to the spouse, remainder to adult children. This abolished the remaining 50 % being enjoyed as a life interest which had applied from the 1920s. The surviving spouse ( and rarely, others ) benefit from survivorship of any joint property. The arrangement in the first paragraph would in the UK be interpreted as an interest in possession trust and is usually avoided as for inheritance tax is considered ' reservation of benefit ' requiring fully backdated sums of annual income tax on whatever market rent ought to have been paid to the legal owner, in England and Wales for continued enjoyment of the asset. Duration of a life estate Life estates are measured either by the life of the property recipient, or by the life of some other person ( pur autre vie ). Validity of a life estate See also : Equity ( law ) and Maxims of equity At law and in equity ( U.S. ) Life estates in real estate are still created today. The life estate is more commonly used in trust instruments, typically in an attempt to minimize the effect of the inheritance tax or other taxes on transfers of wealth. A prospective reduction in tax for the creator ( ' settlor ' ) often follows if the settlor has parted with all current and future interest. However many tax codes transfer the burden of estate taxes to the holder of the interest in possession ( life tenant ) and may treat that person or the remaindermen as owning a second / surplus property. Formally where a system is derived from English law, the law divides into common law and equitable law -- at their cores the formal title and further overarching rules ( especially as to trust interests such as this ). The latter can not usually defeat a claim to title from a bona fide purchaser for value without notice, as such a person has reasonably researched the ownership position based upon the legal title ( common law ) position. As the owner of a legal interest, in the US, further embedded or legal interests consistent with the form of ownership can be created from life estates. Accordingly, due to their potential versatility and complexity in the U.S., common law seldom recognizes a life estate in personal property ( tangible items and livestock other than land including buildings ) but such interests are recognized at equity where of adequate form -- statutes and regulations impose formalities on the creation of lifetime interests in personalty. At equity ( England and Wales ) Since 1925 registered titles in England and Wales preferably should, but mostly do not, reveal an ' interest for life ', ' life estate ' or ' life tenancy ' in the form of a restriction on the register. Instead the registered legal owner may hold various degrees of leasehold or freehold interest, but usually absolute interest. This provides a reliable ' mirror of title ' which can only be subjected to a very few overriding interests. A maxim of equity is ' Where equities are equal, the law will prevail '. Equity defers to the position at law of a bona fide purchaser for value without notice ( including any tenant or mortgagee ), and as ' equity will not suffer a wrong to be without remedy, ' where there is such, will be limited to in personam remedies against the settlor or life tenant where it confirms life estates, upon trust, to have been validly created : for the life tenant ( s ) ; and thereafter for remainderman, remaindermen or the reversionary settlor. Life tenants are never recorded as proprietors at the Land Registry as they are temporary, equitable owners and are not entitled to have the a transfer of the land effected. If the proprietor has died, executors of the will, administrators or beneficiaries all have the right to apply for the standard form A restriction and are encouraged by the official guidance to do so. If a lease is for more than seven years, the lease must be registered. Most long leases are for a period of between 99 and 999 years, and ' leases for life ' will be interpreted either as a licence or a lease. Torrens title jurisdictions In most Torrens Title jurisdictions a life tenant has, like in UK and US, the right to possession and enjoyment of the property, but once the tenant dies the property will return to the remainderman. The main difference is that, the life estate will be registered by the Registrar general of that jurisdiction, and will appear on the registered title. This has the effect of making them one of the 9 types of recognised interest in land, and one of the four that confirm possession. The registration process in Torrens title systems usually confers indefeasibility on the life estate. A holder of a life estate can alienate his rights, but they will still expire on his death, regardless of who he alienates it to. At that point, that buyer will have to forfeit the land. References Jump up ^ Home Reversions and their place in the market Archived 2015 - 03 - 25 at the Wayback Machine. Chris Prior. Mortgage Introducer 18 February 2014. Retrieved 2015 - 03 - 12 Jump up ^ Williamson, Lucy ( 2015 - 07 - 01 ). `` The deal to sell your home and get paid to stay ''. BBC News. Retrieved 1 July 2015. Jump up ^ `` Family Finances : Wills and inheritance : how changes to the intestacy rules affect you '' Jill Papworth and Patrick Collinson. Retrieved 2015 - 03 - 12. ^ Jump up to : Trust and Capital Gains Tax UK tax authority ( HMRC ). Retrieved 2015 - 03 - 12. ^ Jump up to : Practice Guide 24, published 13 October 2003. Land Registry. Retrieved 2015 - 03 - 12 Jump up ^ `` Wagstaff and the definition of settled property for CGT purposes '' 27 March 2014. Fiona Graham and William Hadley. Private Client Advisor. Retrieved 2015 - 03 - 12. Jump up ^ Edgeworth et all, Sackville and Neave 's Property Law Cases and Materials, 8th edition, Lexis Nexis, 2008, pp. 200 - 205. Jump up ^ Estate Planning and Trusts. Jump up ^ see Frazer v Walker ( 1967 ) AC 569. Jump up ^ see Bogdanovic v Koteff ( 1988 ) 12 NSWLR 472. See also Interest in possession trust Reverse mortgage Life annuity Retrieved from `` https://en.wikipedia.org/w/index.php?title=Life_estate&oldid=780500132 '' Categories : Real property law Wills and trusts Land tenure Hidden categories : Webarchive template wayback links Articles needing additional references from July 2015 All articles needing additional references All articles with unsourced statements Articles with unsourced statements from January 2016 Talk Contents About Wikipedia 한국어 Edit links This page was last edited on 15 May 2017, at 14 : 18. Text is available under the Creative Commons Attribution - ShareAlike License ; additional terms may apply. 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Question: who owns the property in a life estate
Answer: life tenant