A life estate is an ownership interest in property, usually real estate. If a person owns a life estate in property, this means that the person has the exclusive right to use and possession of the property during the person’s lifetime. When the person dies, title to the property automatically goes to the future title holder. A future title holder is also called a “remainderperson”.
Actually, the record owner of the title is the remainderperson, but his/her interest in the property is subject to the life estate. In a typical case, a deed will transfer interest to the remainderperson, so the title will be held in the remainderperson’s name, but the deed will include a restriction stating that the estate is subject to the life estate of another person called a “life tenant”.
A life estate is an estate planning tool that can help avoid probate. It can also be used to preserve assets of a person’s estate.