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  • Life Estate?

    Can a life estate give the grantee title rights to the property they are granted to live on for their lives?

    If so then why aren't their names on the title for the property they're residing on? Or does that matter?
    Life is what you make of it...so please read the instructions carefully.

  • #2
    Re: Life Estate?

    What do you mean by "title rights"? A holder of a life estate can sell or transfer their life estate. They can also rent out the property during the term of their lives. But they cannot transfer more than what they have. If they have a life estate, their interest should be reflected in the title to the property as a life estate.

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    • #3
      Re: Life Estate?

      So when you do a title search, you should find the grantee's name somewhere listed in the title right?

      It is my understanding that the property owner convey's their property to the life tenant under which they own and can utilize the property in ways they see fit, however upon death that property cannot be inherited to survivors. The title of that property reverts back to the grantor of the Life Estate to the grantee.

      So if that's the case, can the grantor still take out any equity or refinance loans if the property's title is under someone elses name such as the life tenant?

      And if there is no inclusion in the title for the life tenant's name, is there in fact a life estate established for the sake of the grantee?

      Basically during the time of the life tenant/grantee of a life estate, who technically owns the property? I'm thinking the grantee or life tenant owns the rights but not the physical property itself.

      It sounds a bit convoluted but owning rights and owning the actual property can be considered very different.

      Anyone have any ideas or information on this kind of land conveyance?
      Life is what you make of it...so please read the instructions carefully.

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      • #4
        Re: Life Estate?

        For net definitions of life estate:
        http://www.google.com/search?hl=en&l...ition&ct=title

        Yes, if the property is subject to a life estate, it should show up on a title report or title search.

        Upon the death of the holder of the life estate, the life estate disappears. The remainder interest in the property may have been retained by the initial grantor of the property or may have been passed on to other third parties designated to receive the remainder interest. When the life estate disappears, the remainder interest becomes a current vested interest.

        If the property that is subject to a life estate is going to be encumbered by an equity line of credit or mortgage, the lender would most probably want the life estate interest to be subordinated to the lender's interest.

        A life estate is an actual interest in real property, not just the right to use the property. However, it is not an absolute ownership of the property.

        If there is no inclusion of a life estate in the title to the property, I don't know if there is a life estate. There is something similar to a life estate where the right to occupy and use the property is noted in a trust agreement rather than in the conveyance document.

        However, (CYA time) this is my personal opinion and is not legal advice. If you need this information for an actual real situation, do not rely on posting boards. You should consult a real estate attorney licenced to practice in Hawaii.
        Last edited by Adri; May 4, 2006, 01:26 PM.

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        • #5
          Re: Life Estate?

          Originally posted by Adri
          If there is no inclusion of a life estate in the title to the property, I don't know if there is a life estate. There is something similar to a life estate where the right to occupy and use the property is noted in a trust agreement rather than in the conveyance document.

          However, (CYA time) this is my personal opinion and is not legal advice. If you need this information for an actual real situation, do not rely on posting boards. You should consult a real estate attorney licenced to practice in Hawaii.

          I'm thinking along the same lines as you about the right to occupy a property as opposed to conveyance. But to me that's not a life estate but merely a lease agreement to occupy for as long as the tenant is alive. Sounds just like a life estate but in this case there is no conveyance of title at all.
          Life is what you make of it...so please read the instructions carefully.

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          • #6
            Re: Life Estate?

            I am looking for an answer to a similar question that I think Craig is posting.
            My question is:

            Party A owns property that is granted to party B as a life estate. This is done through a living trust document. Party A also has added to the title of his property, his children's names.

            What affect, if any, does this have on Party B's right to life estate? What rights do children have in this case? The intent is meant to allow party B use of property, but to have the property ownership revert to the children once Party B is no longer alive and in need of living in the property.

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            • #7
              Re: Life Estate?

              From what I do know about a life estate, once the grantee dies, the life estate ceases to exist. There is another type of lif estate that allows for continued lease agreements after the grantee dies but that's pretty specific stuff.

              But as in the case you described, I believe Party B still has property rights to the life-estate leased property even after Party A passes on. From what I understand, the life estate remains in effect for as long as Party B is alive and the children of Party A has to abide by it's contract. I'm sure there must be an inclusion as to whether the life estate ends because Party B cannot will or put into a trust their life estate lease to perpetuate it for future generations.

              In your case I think the children of Party A has to abide by the life estate lease for Party B until Party B passes on.
              Life is what you make of it...so please read the instructions carefully.

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              • #8
                Re: Life Estate?

                So if that's the case, can the grantor still take out any equity or refinance loans if the property's title is under someone elses name such as the life tenant?

                Life estate is generally viewed as a cloud on the title by lenders. So leveraging the property by the grantor can be difficult or impossible. Also, upon death, don't forget to clear the life estate at the bureau of conveyances.

                In Hawaii, TMK records are so crappy, that the life estate often does not show in the computer. But a Title Search will reveal it everytime.

                There are several other, better ways to keep Mom's with her original roof over her head. Very few attorneys would recommend life estate as a real estate tool.
                FutureNewsNetwork.com
                Energy answers are already here.

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                • #9
                  Re: Life Estate?

                  Originally posted by timkona
                  So if that's the case, can the grantor still take out any equity or refinance loans if the property's title is under someone elses name such as the life tenant?
                  No. The grantor cannot take out any equity or refinace loans while the property is under the life-estate lease of the grantee. Simply stated, if you were to do a title search on that property, the name on that title will be the name of the grantee of the life estate.

                  Likewise the grantee is responsible for all liability claims against the property as well including property tax assessments and property insurance. Basically the only restriction that I know of on a life-estate grantee is that they cannot sell the property or engage in any mortgages either. I could be wrong but something tells me the Title of that property probably would have a lien recorded on it bearing the Grantor's name on it, basically prohibiting any mortgaging or selling of the property.
                  Life is what you make of it...so please read the instructions carefully.

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