Posted by Nike on January 17, 2007 at 21:58:39:
C’mon—then how does the life tenant relinquish? I’ve suggested two ways—how about you explain how the life tenant relinquishes.
Life estate questions - Posted by Bob Smith
Posted by Bob Smith on December 29, 2006 at 19:27:13:
Does the remainder automatically receive notice when the life tenant dies, or must they periodically inquire as to whether the life tenant is still alive? Is possession by the remainder or reverter automatic upon the death of the life tenant, or must the remainder/reverter bring a quiet title or ejectment action? Upon acquiring possession, must the remainder/reverter honor any leases given by the life tenant, or since the general rule is that one cannot convey more than one has, do leases expire automatically when the life estate does?
Re: Life estate questions - Posted by David Krulac
Posted by David Krulac on January 02, 2007 at 07:00:57:
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there is no notice to the remainder.
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no quiet title is necessary, only proof of death, like death certificate.
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the life estate can not give leases that exceed the life of the life estate grantee.
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the life estate is obviously extinguished upon the death of the life estate tenant.
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the life estate may also be extingusihed if the life estate tenant moves out, which often happens when an elderly person moves to a nursing home due to needing physical care.
Re: Life estate questions - Posted by Gary-Oregon
Posted by Gary-Oregon on December 30, 2006 at 24:09:40:
The remainder does not automatically receive notice. General this arrangement is btween family members, so it would follow that they would have actual notice of the death of the life tenant. While non-family members can enter into this arrangement, it is my experience that it would be a rare occurrence that this arrangement would satisfy the needs of unrelated parties.
Possession is automatic upon the death of the life tenant, however a title company will require that an “Affidavit of Death of Life Tenant” w/ a certified copy of the Death Certificate attached, (proving the fact of death) be recorded prior to the issuance of a policy of title insurance.
Your next question is a little more difficult to answer without more info.- I assume prior to the life tenant’s death he/she was sharing the home with at least one other party who’s occupancy rights were conveyed by some sort of a lease arrangement? If this is the case, was the lease created prior to the creation of the life estate? If so, generally the life estate estate would be subject to the lease (assuming the lease survived the death of the life tenant. this is a big assumption on residential leases. Some do-others don’t).
Oh yeah, more life estate questions - Posted by Bob Smith
Posted by Bob Smith on December 29, 2006 at 19:37:26:
The life tenant is responsible for property taxes, right? So what happens if the property taxes are delinquent? Can the remainder pay the taxes and then quiet title (extinguishing the life estate) to themselves? Does foreclosure of the tax lien extinguish the remainder, or is only the life estate at risk?
Re: Life estate questions - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on January 02, 2007 at 23:15:49:
Great post. My only issue is with your comment #5 as the occupancy matter is typically a term that’s negotiated into the instrument establishing the estate for life, rather than being an implicit characteristic of such estates.
An alternative devise would be an estate for years that would provide for a cap for some clever centigenarian like the French lady who lived to be a reported 122 (or something), she being motivated to thrive primarily on the thought of outliving her (much younger) remainderman.
We underestimate those crafty French women.
Re: Life estate questions - Posted by Bob Smith
Posted by Bob Smith on December 30, 2006 at 01:36:23:
>it is my experience that it would be a rare occurrence that this arrangement would satisfy the needs of unrelated parties.
Remainders can be purchased, acquired in foreclosure or tax sale, etc. Think “long term investment”.
>I assume prior to the life tenant’s death he/she was sharing the home with at least one other party who’s occupancy rights were conveyed by some sort of a lease arrangement?
That, or full possession was conveyed by a lease to said other party and the life tenant doesn’t live there anymore. In either case, the lease was created after the life estate was. I’m assuming the lease, like most leases, doesn’t address life estates so on its face purports to survive the death of the life tenant. Hence my question if it did.
Re: Oh yeah, more life estate questions - Posted by David Krulac
Posted by David Krulac on January 01, 2007 at 21:33:15:
many of the life estates that I’ve seen have the remainder pay the real estate taxes, and insurance to insure no lapses. the tenant pays the utilities.
Most of these questions… - Posted by Gary-Oregon
Posted by Gary-Oregon on December 30, 2006 at 24:27:41:
depend on the agreement. Often times the reason an unrelated party might get involved with a life estate arrangement might be because the life tenant (usually an elderly person on a fixed income with very little income) has either fallen behind on the monthly payments or on the annual tax payments.
Some counties segregate the taxes (ie that portion based on the value of the life tenants estate will be a separate taxation amount. This does not mean that it necessarily follows then that he/she has to pay them- that would depend on your agreement.
If it is the life tenants obligation to pay any portion of the taxes and he/she fails to do so, the remainder can pay the taxes, but I am not certain it would gain them anything since their estate has not been jeoparized in any manner.
The remedy of the county is to lien the property, but only as it relates to the life estate (assuming that the two estate are segregated for taxation purposes and that the remainder portion of the taxes have been paid). So, all the county- or any purchaser at tax sale- would own would be the life estate (which ofcourse would terminate upon the death of the life tenant). Since the purpose of the life estate is usually to give this elderly person a place to live (usually the home they have owned for most of their life), for the rest of their life, it could be argued that if the life tenant is no longer in possession of the property the life estate ceases (even prior to the death of the life tenant). Once again, usually the agreement will address whether the interest of the life tenant is transferable (usually not).
LOL
PS - Posted by David Krulac
Posted by David Krulac on January 03, 2007 at 18:39:23:
I am very familar with a life estate situation where the reminderman purchased a property giving a life estate to the former owner. Unfortunately the remainderman 25 years younger than the life estate tenant passed on first. The life estate tenant, though not French lives on at 98 years old.
Re: Life estate questions - Posted by David Krulac
Posted by David Krulac on January 03, 2007 at 18:34:45:
Most of the life estates are pretty criptic. Often times it amounts to 1 sentence in the recital of the deed.
When a tenant has a life estate, by definition (barring specific language to the contrary); that life estate is extinguished when that person stops being a tenant there. Therefore if a tenant with a life estate moves out, as in permanently, not a vacation, not a temporary hospital stay etc., then by definition the life estate is extinguished.
This point often throws or confuses people as they assume that the life estate can not be extinguished while the tenant is still alive. That’s just not so.
Re: Most of these questions… - Posted by Bob Smith
Posted by Bob Smith on December 30, 2006 at 01:25:36:
The life estates I see are usually of the form “To A for life, remainder to B” or “To A, reserving for myself a life estate”. Since there is generally no written agreement between the life tenant and the remainder, at least none on any deed I’ve ever seen, I was wondering what the common-law rules are.
>This does not mean that it necessarily follows then that he/she has to pay them- that would depend on your agreement.
The common-law rule is that the life tenant (more generally, the owner(s) of the possessory estate(s)) is always responsible for the taxes. The non-possessory estates have no tax liability, unless as you note your jurisdiction separately taxes them in repudiation of the common-law rule.
>I am not certain it would gain them anything since their estate has not been jeoparized in any manner.
It certainly has been jeopardized if taxes aren’t segregated and foreclosure of the tax lien extinguishes their estate, which is precisely why I asked if it did.
As to possession, life estates do not cease upon the life tenant’s dispossession unless the terms of the grant so specify. The life tenant can always transfer their interest, but the buyer’s term of ownership is still limited by the measuring life (“life estate pur autre vie”). Is there some statutory rule in Oregon overriding the common-law rule?
I can’t help but notice your frequent recitation of “the agreement”. Are you talking about a trust? I’m not, I’m talking about estates in land.
questions - Posted by Nike
Posted by Nike on January 04, 2007 at 07:00:25:
A life estate is not extinguished if the tenant moves out. A life estate gives the life tenant the right not the obligation to possess the property.
Re: Life estate questions - Posted by Bob Smith
Posted by Bob Smith on January 03, 2007 at 19:03:26:
Are you sure that isn’t state-specific? I’m reading a tome on the subject (Estates and Future Interests in a Nutshell) and it seems to indicate that “to A for life” and “to A for as long as he resides there” are completely different grants. The former has no condition upon which premature termination of the estate will occur, whereas the latter does (the residency requirement, which at common law is also triggered by the death of the tenant, seeing as how you can’t reside anywhere once you’re dead). If absent triggering language in the grant life estates were extinguished by non-residency I’d think the professors who wrote it would have mentioned it. You should be able to do anything with a life estate you could with fee simple absolute, including leasing the property, except will it to your heirs or commit waste (even then, waste only matters if the remaindermen object).
When I said their estate… - Posted by Gary-Oregon
Posted by Gary-Oregon on December 30, 2006 at 23:21:11:
has not been jeapardized in any manner I was referring to the situation where the taxing authority is taxing the life estate separate from the remainder. I think you might be surprised how many jurisdictions do it in this manner.
Re: questions - Posted by David Krulac
Posted by David Krulac on January 10, 2007 at 15:01:27:
a life estate does give the tenant the right to live there. But if they permanently relinquish that right, you don’t have to wait until there death. They can give up their rights voluntarily if they chose.
Re: Life estate questions - Posted by David Krulac
Posted by David Krulac on January 10, 2007 at 15:09:40:
You provoked another question. That being what happens if the home is totally destroyed like fire, hurricane etc. Is the remainderman required to rebuild? What if the insurance doesn’t cover the costs of rebuilding?
Re: Life estate questions - Posted by David Krulac
Posted by David Krulac on January 10, 2007 at 15:06:41:
if a life estate tenant, goes on vacation, or even goes to a nursing home and does not relinquish their life tenancy then it stays in force. But the life estate tenant has the power to end the life estate before their life ends if they so chose.
You’re right that the life estate can do anything except will the life estate, and that includes self terminating the life estate. cicumstances where this happens are where an elderly person voluntarily goes to a nursing home and plans to never return or where a person goes to another part of the country like retired people going to FL and AZ.
questions - Posted by Nike
Posted by Nike on January 10, 2007 at 18:04:47:
It’s hard to keep track of what you’re saying–you sound confused. Yes, the life tenant can surrender their interst, however it does not turn on whether the life tenant moves out. The life tenant can transfer to a third-party but the estate continues. If the life tenant wants to end the estate he can transfer to the remainderman.
Re: Life estate questions - Posted by Bob Smith
Posted by Bob Smith on January 11, 2007 at 10:27:54:
As I understand it, the life tenant is not responsible for extraordinary damage (fire, hurricane, earthquake), so is not responsible for rebuilding, unless the grant explicitly requires it. The remainderman isn’t responsible for anything unless the grant requires it. If insurance isn’t enough, they’re both SOL.