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Can a life estate be broken?
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.
What voids a life estate?
The grantor is only intending for the property to belong to the grantee for the duration of the grantee’s life; after that, she wants the property back or wants to transfer it to another person. Life estates are not freely transferable, and any attempt to sell property under a life estate is void.
How does a life estate affect taxes?
The IRS treats the life estate transfer as a sale, and the fair market value of the house is included in your estate. If your estate exceeds the exclusion amount, you could owe estates taxes on the difference. If your estate is $100,000 to $150,000 over the exclusion maximum, the amount is taxed at 30 percent.
Who is entitled to partition of a life estate?
A life tenant is entitled to partition of the life estate only and not the remainderman’s interest. Plano Mfg Co v Kindschi, 111 NW 680, 681, 131 Wis 590, 591 (1907).
When does a life estate pass to the remainderman?
However, the life tenant may partition a life estate when the co-tenants hold in fee, but only the life tenant’s interests are partitioned. Id. The life estate lasts as long as the life of the grantee. When the life tenant or the person whose life measures the life estate dies, the property passes to the remainderman.
What happens to the interest on a life estate?
The interest remaining after the death of the life tenant is called the “remainder interest”. After the death of the life tenant, the remainder man enjoys full ownership of the life estate land or property.
Can a life tenant sell or lease a property?
A life tenant can sell or lease the property but not beyond the life estate term. Collins v Held, 369 NE2d 641, 648 (Ind 1977). Since the estate exists until the death of some person, usually the life tenant, leasing from someone holding a life estate can be risky.