A life estate is removed by death or by the owner of the life estate terminating it, according to Law.Jrank.com. If the owner agrees to terminate the life estate, it must be in writing and properly recorded, says LegalZoom.Continue Reading
A life estate is a property interest that lasts only for the life of the person who owns it, who is called the life tenant, explains Law.Jrank.com. The people who receive the property after the death of the life tenant are the remaindermen. The life tenant has the right to sole possession of the property. This means she can collect rents, plant and harvest crops and even sell her interest, as long as she does not do anything that creates waste or harms the property. If the life tenant sells her interest, she creates a life estate pur autre vie, which means that the buyer receives an interest in the property that lasts for the life of the life tenant and then reverts to the remaindermen.
A life estate is created by deed, according to LegalZoom. The life tenant can terminate the life estate by creating a new deed that extinguishes the life estate. This deed must be filed in the real property records. The property would then vest in the remaindermen. Unless the remaindermen pay for the value of the life estate, the termination is considered a gift to the remaindermen, based on IRS Section 26 CFR 25.2519-1, states Cornell University Law School.Learn more about Real Estate