In a recent column, we explored the use of a life estate and the complexities of selling a property when both the life tenant and remaindermen have true interests in the residence. A further limitation is the rule against perpetuities in quite a few states and nations which prohibits lengthy-operating pre-19th-century style successions of life tenancies and may possibly result in the premature and compensation-entitling termination of such successive life interests.
Another variation of a life estate deed entails the senior purchasing a life estate interest in their child’s dwelling. But unlike a traditional life estate deed, you are in a position to deal with the home in the course of your lifetime, devoid of the consent of the remainder beneficiaries.
Also, the deed is irrevocable as soon as it is recorded and the transfer may perhaps be topic to a gift tax. The remainder interest might be granted to a third party (A to B for life, with a remainder interest in C), or it may possibly remain with the grantor. If you have any concerns about life estates or estate preparing the attorneys at Slotegraaf Niehoff Pc are here to help you.
If various parties will serve in the similar role—for instance, if there are various life tenants or many remainder beneficiaries—it is critical to also include things like language that defines the relationships within that function, such as the form of co-ownership for numerous remainder beneficiaries.
The person who holds a remainder interest does not have the appropriate to possess the property until the life tenant’s death. Once a classic life estate deed is signed, the grantor can not sell, mortgage, convey, present, or otherwise terminate the remainder interest during his or her lifetime with no the consent of the remainder beneficiaries.