What is a "Life Estate", and how can I use it?

Legal Definition

Freehold estate while the beneficiary or tenant lives. Terminates at the beneficiary's death. Not a legal estate, so the beneficiary cannot sell the property. It is only an equitable interest.

- thelawdictionary.org

Plain English Definition

A "Life Estate" is an ownership interest in property involving the drafting and recording of a deed to real estate. The deed names a "Life Tenant" and a "Remainder Owner(s)". The Life Tenant has exclusive rights in the property for the duration of their life. The Remainder Owner(s) have a vested interest in the property, but have no right to posses the property until the Life Tenant has died.

What does this mean for the life tenant/beneficiary?

During their life, they receive the benefit of being recognized as the property owner. The life tenant has the exclusive right to live on the property, as well as to collect rent and/or other profits from the property. The life tenant is also responsible for paying any applicable taxes on the property, and maintaining its overall condition.

What happens when the beneficiary dies?

Legal title to the estate passes directly to the Remainder Owner avoiding probate. During the beneficiary's life, the Remainder Owner does still have a vested interest in the property, and can take action to mitigate waste of the property, though this is only in specific cases.

Why doesn't everyone do this?

While a life estate does have its benefits, it also comes with a fair amount of risks. A cost benefit analysis must be considered before pressing forward. What are some of the risks?

  1. In order to create a Life Estate, you must record a new deed. Depending on your location, legal and filing fees could be costly.
    • Note: Once someone is on the deed, it can very difficult to have them removed.
  2. Once a Life Estate is created and the deed is recorded, it can become more difficult to sell or mortgage the property. Now that there are additional "owners" of the property, more paperwork must be filled out in order to take any action encumbering the property via mortgage or otherwise. In addition, everyone must consent.
  3. Where there is a legal interest in a home, there is an opportunity for attachment by creditors. Consider the following example.
    • A deed reads "Life Estate in A, remainder to B". During A's life, B gets into a car crash with X that is B's fault. After all of his insurance is dried up, he ends up owing X over $100,000 dollars. Because B has an interest in the home, X can come after B's interest in the home to satisfy the judgement.
  4. Changing the title to the home could alter the way certain benefits are calculated. These laws change frequently, so a lawyer should be consulted before making a final decision.


A Life Estate can be, and is frequently used as an estate planning tool. Whether or not it is the right tool for you depends on a variety of factors. Before you decide to use a Life Estate, consult with an attorney. Most, if not all, will provide a free consultation! If you have any questions about this specific blog post, or any other information on the site, please feel free to contact us!