Real Property for Dummies...me included Part III (Life Estate)

And...we continue to grope our way through the murky waters of the definition of 'Real Property".

Again, the dictionary definition of Real Property is a follows:

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

I want to talk about the part that says:

"right to occupy for a period of time (tenancy or life estate)".

To explain this part, I must explain what a life estate is. BTW, this is one of the lines on the Seller's Disclosure most of you filled out glibly :)

A life estate allows a person to possess, but not have ownership of property (typically land, a home, or other buildings) during his or her lifetime. When the person passes away, the life estate ends and the title holders (remaindermen) have full benefit of the land and income.

As an example, I want to leave my land and home to my husband so he can live in the home and can receive income from the land after my passing. But after I pass away he wants his children to inherit the land and home.

To ensure this, I write a will leaving my home and my land as a life estate for my husband (who then becomes the life tenant) with the remainder to my children, Hannah and Nicole. After I pass away and everyone cries and eats potato salad at the memorial service, full benefit and income from the land become Hannah and Nicole's because they were named as remaindermen (women...whatever) in my will.

My husband ( the life tenant), however, will have the full use and/or the possession of the property for the duration of his life. At the passing of the life tenant ( my husband) the life estate ends and my kiddos have the full use and benefit of the property. My children must be named in my will. If there is no will, then their use of the property will be determined under AIPRA rules.

Whew! And that is why i am worth the money :)

(More to follow)