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what if I told you that you could own a
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property but not really own it confusing
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life Estates is one of the trickiest
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concept on a real estate exam but by the
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end of this video you will be able to
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explain it like a real Pro in this video
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we will learn how to define life Estates
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the concepts that you need to know for
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the exam and the types of questions that
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you can expect so let's go and let's
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unravel This legal term what is a life
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estate a life estate is a form of
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property ownership that lasts for the
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duration of the occupant's life the
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occupant is also known as the life
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tenant here's how it works life Estates
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have time limited ownership meaning the
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life tenant gets to use and enjoy the
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property for their entire life they have
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no expiration date but they are also not
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forever the right of the property ends
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when the life tenant passes away they
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can't will to someone else there's a
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future owner waiting in the wings
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there's always someone else called the
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remainder man who set to get the
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property after the tenant is gone use it
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don't lose it during the tenant's life
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they can live in it rent it out or use
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it how they like within reason they
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cannot have it demolished or ruined the
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Right comes with responsibility the life
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tenant is in charge of maintaining the
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property and paying taxes on it during
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occupancy no selling the whole package
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since the tenant doesn't own a future
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interest in the property they can't sell
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outright remember in real estate exam
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questions look for scenarios someone has
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a right to use a property for life but
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they cannot sell it outright because
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that's your cue to think wait a second
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life is state but what exactly do you
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need to know for the exam the good news
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is that there are only three things you
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have to remember and the first one is
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that life estate is a type of Freehold
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estate because the life tenant has
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ownership of the property even though it
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is just for the duration of their life
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the second thing that you have to keep
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in mind are four very important
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vocabulary terms life tenant who is the
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individual with ownership of the
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property for the duration of their life
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remainder man this is the individual to
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whom the property will go after the life
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tenant passes granter who is the person
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giving or handing over the property to
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the life tenant in some cases the
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granter is also the life tenant as in
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our example above reversionary interest
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which is the future interest in the
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property it identifies the person who
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will own the property in the future
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think of it as the person to whom the
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property will revert and finally I want
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you guys to remember the bundle of
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Rights a life tenant has
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every life tenant May possess the
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property relase the property and enjoy
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the property in some very and I repeat
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very rare cases a life tenant with the
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aid of the remainder man May encumber
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and even sell the property but again
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this is a very very rare case however a
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life tenant may not will the property to
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anyone or destroy the property exam
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question examples ready to put your
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knowledge to the task here are a few
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exam questions question number one
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Andrew created a life estate on his
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property for his sister Hannah under the
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terms of the deed ownership of the
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property will last until his death her
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death his moving date his last day of
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the fiscal year the correct answer is
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option two when you hear life estate
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think of life and death a life state is
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an interest in real property held for
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the duration of the life of a designated
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person it may be limited by the life of
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the person holding it or by the life of
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another person question number two a
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property owner grants a life estate to
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his brother with the remainder to go to
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a local charity which of the following
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statements is true regarding the
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remainder man the charity has a right to
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immediately occupy the property the
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charity must pay property taxes during
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the life T occupancy the charity cannot
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sell its remainder interest without the
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life tenants permission the Charity's
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interest becomes possessory upon the
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death of the life tenant the first thing
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you have to realize is that the charity
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is the remainder man with that knowledge
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you know that the correct answer is four
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because the Charity's interest as a
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remainder man become possessory only
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after the life tenants death this means
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the remainder man can possess the proper
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but only after the life tenant
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passes there you have it life estate
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demystified you've just added a really
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powerful tool to your real estate
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knowledge toolkit please remember to
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give a thumbs up to this video and hit
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other tricky real estate Concepts and if
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you have any questions please drop them
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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
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eye on the prize until next time bye
