What is a Life Estate

Another topic that confuses some students involves understanding what a Life Estate is all about. People can hold different interests (estates) in real estate: freehold (ownership) or leasehold (lease). Within the freehold catagory there are several types of fee simple and one called "life estate." A life estate is created when someone deeds ownership of realty with the stipulation that the ownership terminates upon the death of some individual. An example might be deeding a home to aging parents for as long as they're alive with the ownership reverting (reversionary interest) to you when your parents die. The "life of" person could be the grantor, the grantee, or some other person (called pur autra vie for the life of another). One question that might come up is can the grantee sell the life estate? Yes, but whoever buys it will still lose ownership when the life of the person named in the deed die (remember you can only sell what you own and you only own the property as long as the named person is alive.)