Life Estates in Real Property

A life estate is defined as an estate in real property whose duration is limited to the life of the person holding it or the life of someone else.

When a fee owner conveys a life estate to someone else, an estate in reversion is created as the residue of the estate left by operation of law. The residue of the estate is known as a reversion or estate in reversion. Possession will revert back to the original grantor once the life estate (lesser estate) is terminated.

When a fee owner conveys to someone else and reserves a life estate unto him/herself, the interest of the purchaser is a remainder that the holder of the remainder is known as the remainder man.

These life estates may be created the following ways:

1. A conveyance of the fee, reserving a life estate to the grantor (seller)
2. A conveyance of a life estate leaving the reversion to the grantor (holder of the fee)
3. A conveyance of a life estate to the life tenant, with the remainder going to another
4. A devise in a will of a life estate confirmed by a decree of distribution of the estate of the deceased.

In general, the life tenant has rights of possession and the use of the land subject to obligations to the remainder man relative to the preservation of the estate.
These rights include:

1. right to rents, issues and profits accruing during his life estate
2. right to cultivate and harvest annual crops
3. right to receive proceeds when the life tenant insures his own interest
4. right to an award in condemnation.

In general the life tenant has obligations:

1. proper maintenance of buildings, fences and other improvements
2. payment of taxes
3. payment of interest but not principal on a mortgage or deed of trust.

Here are some examples of language which create life estates:

1. to "x" for the term of his/her natural life
2. to "x" for life
3. to "a" for the life of "x"
4. to "a" for the lives of "x" and "y" and of the survivor of them
5. to "a" and "b" for their joint lives and to the survivor of them for the life of the survivor
6. to "a", but on "a's" death to go to "b".

A life estate will terminate with the death of the life tenant. In Colorado, the recording of the death certificate will be proof of death and the title company will reflect title in the remainder man. The merger of the life tenant estate and the remainder man estate in one person can terminate a life estate.

The title company may reflect title as follows: "A and B" as to a life estate and "C" as to the remainder. The tenant or the remainder man has the power to convey, encumber or lease his/her respective interest. The life tenant cannot create any estate beyond the duration of the life tenant's life. The remainder interest can be conveyed or encumbered although the remainder interest is a future estate subject to the earlier created life estate. Life estates can even be exchanged as real property if the life tenant has a life expectancy remaining of at least 30 years according to actuarial tables.