To many of us, the Life Estate appears to be something that we’ll never see. I remember first learning about life estates when I took my first real estate course in 1977. It seemed like a neat trick.
A life estate can be granted to an individual by the owner of a property. First there must be a legal description describing the parcel. Secondly, the grantor of the life estate must have clear title and all the owners must sign on. The person granted a life estate has the right to use the described property during their lifetime.
The owner of a life estate can also transfer the use to another individual during their lifetime, but as soon as they die, the title reverts to the underlying property owner. I’ve been involved in several properties where life estates have existed both as a benefactor and as an underlying property owner.
One problem with life estates is that it can be a hassle removing the recorded documentation from the public record. Once a life estate is created, it is recorded to create public notice that the individual is receiving the right to use of the property until they die. When that person dies, a death certificate must be obtained and recorded to demonstrate that the estate is over.
My experience has been that there are often better ways to accomplish the intent of a life estate than to actually create one. A contractual arrangement can create the same arrangement without creating a recorded document. If you’re on the receiving end, it is probably better to receive the real thing, but if you’re deeding somebody those rights, you might want to consider some other option.
I am currently in the process of searching for death certificates for two individuals who retained a life estate allowing them to hunt deer on our property until their death. In their case, all the recipients did to document the Estate was to state that they were retaining a Life Estate and access rights when they created the grant deed.
It is simply written on the deed and it worked. They have been deceased for years, but the life estate was never removed from title. I recently received a call from a grandson who thinks he can produce the two death certificates I need in order to clear title.
It has taken several months to track down this relative who has good enough legal standing to obtain the death certificates and provide them to me. After I receive the death certificate I’ll give it to the title company and they will then remove the Life Estate from our title report.
In about 1986, a group of us had an opportunity to sell our duck club, but we didn’t have any motivation to sell. When the buyer told us he’d grant us Life Estates for the purpose of duck and pheasant hunting, we changed our minds.
The ensuing contractual arrangement has allowed us to continue hunting that property for more than 20 years – a very good deal. With luck, some of us may be hunting there for another 20 years.
In our recent partition suit, an agreement between us and one of the other owners helped seal the deal. We agreed to allow him to use a cabin and hunt on the surrounding 320 acres until his death or five years, whichever comes sooner. He’s not in great health, but the arrangement made selling his interest more palatable for him and was acceptable to us. Although this arrangement is not a true Life Estate, it has some of the same characteristics.