0:00
what if I told you that you could own a
0:02
property but not really own it confusing
0:06
life Estates is one of the trickiest
0:08
concept on a real estate exam but by the
0:11
end of this video you will be able to
0:13
explain it like a real Pro in this video
0:16
we will learn how to define life Estates
0:19
the concepts that you need to know for
0:21
the exam and the types of questions that
0:23
you can expect so let's go and let's
0:26
unravel This legal term what is a life
0:30
estate a life estate is a form of
0:32
property ownership that lasts for the
0:35
duration of the occupant's life the
0:37
occupant is also known as the life
0:40
tenant here's how it works life Estates
0:43
have time limited ownership meaning the
0:46
life tenant gets to use and enjoy the
0:48
property for their entire life they have
0:51
no expiration date but they are also not
0:54
forever the right of the property ends
0:56
when the life tenant passes away they
0:59
can't will to someone else there's a
1:02
future owner waiting in the wings
1:04
there's always someone else called the
1:06
remainder man who set to get the
1:08
property after the tenant is gone use it
1:12
don't lose it during the tenant's life
1:15
they can live in it rent it out or use
1:18
it how they like within reason they
1:20
cannot have it demolished or ruined the
1:23
Right comes with responsibility the life
1:25
tenant is in charge of maintaining the
1:27
property and paying taxes on it during
1:31
occupancy no selling the whole package
1:34
since the tenant doesn't own a future
1:36
interest in the property they can't sell
1:41
outright remember in real estate exam
1:44
questions look for scenarios someone has
1:46
a right to use a property for life but
1:49
they cannot sell it outright because
1:52
that's your cue to think wait a second
1:54
life is state but what exactly do you
1:57
need to know for the exam the good news
1:59
is that there are only three things you
2:01
have to remember and the first one is
2:04
that life estate is a type of Freehold
2:06
estate because the life tenant has
2:08
ownership of the property even though it
2:11
is just for the duration of their life
2:14
the second thing that you have to keep
2:15
in mind are four very important
2:18
vocabulary terms life tenant who is the
2:22
individual with ownership of the
2:23
property for the duration of their life
2:26
remainder man this is the individual to
2:28
whom the property will go after the life
2:31
tenant passes granter who is the person
2:35
giving or handing over the property to
2:37
the life tenant in some cases the
2:39
granter is also the life tenant as in
2:42
our example above reversionary interest
2:45
which is the future interest in the
2:46
property it identifies the person who
2:49
will own the property in the future
2:51
think of it as the person to whom the
2:53
property will revert and finally I want
2:56
you guys to remember the bundle of
2:58
Rights a life tenant has
3:00
every life tenant May possess the
3:03
property relase the property and enjoy
3:05
the property in some very and I repeat
3:09
very rare cases a life tenant with the
3:12
aid of the remainder man May encumber
3:15
and even sell the property but again
3:18
this is a very very rare case however a
3:22
life tenant may not will the property to
3:25
anyone or destroy the property exam
3:28
question examples ready to put your
3:31
knowledge to the task here are a few
3:33
exam questions question number one
3:36
Andrew created a life estate on his
3:38
property for his sister Hannah under the
3:41
terms of the deed ownership of the
3:43
property will last until his death her
3:46
death his moving date his last day of
3:49
the fiscal year the correct answer is
3:51
option two when you hear life estate
3:55
think of life and death a life state is
3:58
an interest in real property held for
4:00
the duration of the life of a designated
4:03
person it may be limited by the life of
4:06
the person holding it or by the life of
4:09
another person question number two a
4:12
property owner grants a life estate to
4:14
his brother with the remainder to go to
4:16
a local charity which of the following
4:19
statements is true regarding the
4:22
remainder man the charity has a right to
4:24
immediately occupy the property the
4:26
charity must pay property taxes during
4:28
the life T occupancy the charity cannot
4:32
sell its remainder interest without the
4:34
life tenants permission the Charity's
4:37
interest becomes possessory upon the
4:39
death of the life tenant the first thing
4:42
you have to realize is that the charity
4:44
is the remainder man with that knowledge
4:47
you know that the correct answer is four
4:49
because the Charity's interest as a
4:51
remainder man become possessory only
4:54
after the life tenants death this means
4:57
the remainder man can possess the proper
5:00
but only after the life tenant
5:04
passes there you have it life estate
5:06
demystified you've just added a really
5:09
powerful tool to your real estate
5:11
knowledge toolkit please remember to
5:14
give a thumbs up to this video and hit
5:16
the Subscribe button so that you will be
5:18
the first one to know when we break down
5:20
other tricky real estate Concepts and if
5:24
you have any questions please drop them
5:26
in the comments below your curiosity May
5:29
inspire our next video if you haven't
5:31
already then check out our video on
5:33
joint tency versus tency in common stay
5:37
curious stay determined and keep your
5:39
eye on the prize until next time bye