how to remove someone from a life estate

You may be among the many people who create a life estate for their homes or other real property as part of an estate plan. A life estate can ensure your property will transfer to your chosen recipients.

Your situation could change, though, or you might decide to handle your estate another way, so it's important to understand what a life estate is, and how to dissolve one.

What Is a Life Estate?

A life estate is a type of holding where you divide ownership into two phases: a life estate and a remainder. As property owner, you change the ownership so that you only hold the property during your lifetime. This means nothing will be left of your interest to pass on to someone else, such as through your will.

The second phase of ownership is the remainder. The person who owns the remainder takes possession when the life tenant dies. They have an ownership interest during the life tenant's lifetime but do not take possession until that person dies. An example would be where a mother sets up her home, so she has a life estate with her son having the remainder.

Life estates are created to simplify estates. Ownership of the property passes without having to probate a will. Life estates can also be used to protect property from Medicaid recovery—if they are established before the "lookback" period.

A life estate is created by executing and filing a new deed for the property that specifies the life tenant and remainderman.

Types of Life Estates

Life estate types include:

Life estate with remainder: As described above, the life tenant has ownership and possession during their lifetime, and the remainderman has an ownership interest but does not take possession until the life tenant's death.
Life estate with reversion: The property owner grants someone else a life estate in the property. When that life tenant dies, the property reverts back to the original owner. A son could give his mother a life estate in his vacation home, and she could live there for her lifetime. When she dies, the son has full ownership.
Life estate pur autre vie: This type of life estate lasts for the length of one person's life, but it is not the lifetime of the tenant. This is commonly used to provide for a disabled adult child. The parents leave a life estate to the child's caretaker that lasts for the child's life so the child has a place to live. Once the child dies, the property reverts back to the parents' estate.
Homestead: This life estate is created to protect a home from creditors. For example, in bankruptcy law, state laws may allow you to designate your home as a homestead so that it is not accessible to creditors.

How to Dissolve a Life Estate

If you are considering setting up a life estate, think carefully about doing so because they can be challenging to dissolve once you set one up. Other options may give you the same result, such as a living trust or selling the property to your heir and then renting it for your lifetime.

To dissolve a life estate, the life tenant can give their ownership interest to the remainderman. So, if a mother has a life estate and her son has the remainder, she can convey her interest to him, and he will then own the entire interest in the property. If she wants to actually undo the life estate and get back her ownership of the property, her son must be willing to deed his interest back to her. However, if he doesn't want to do so, his mother has no recourse.

A life estate can be a useful estate planning tool, however, it has long-lasting implications and can be challenging to dissolve. Keep all of this in mind as you develop a thoughtful and appropriate estate plan.

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