A life tenant is a person who has the right to some real estate for his lifetime. Usually, the life tenant has unrestricted rights to do what he wants with the real estate while he is alive, although there are times when a tenancy or lease agreement could restrict the life tenant’s rights. When the life tenant dies, it also signals the end of the tenancy.
The person responsible for endowing the tenancy to the life tenant is usually the owner of the real estate, the ownership of which is governed by a fee simple absolute. The fee simple absolute means that the real estate owner has full rights to act in any way he or she wants, with regards to the real estate – and this includes using it or selling it. When somebody is given life tenancy, the person giving the life tenancy is also required to identify a remainderman. The remainderman is the individual who receives the real estate when the life tenant dies.
The life tenant enjoys his right to possess the said real estate, and has this right for the duration of his lifetime. More often than not, the life tenant opts to sell the real estate, or rent it out to some people. It is important to note, however, that the life tenant is not allowed to transfer a larger interest in the real estate than what he or she possesses. In short, once a life tenant sells the real estate, the buyer of the property should know that the purchase expires when the life tenant dies.
Arranging for a life tenancy has its uses. For instance, when a man remarries and the new missus lives in the man’s house. The husband would want his wife to always have the right to reside in that home, even if he dies. Even if he wants his new wife to be able to reside in that house while she is living, the husband may also want his children to inherit the home when the wife dies – rather than the wife willing the house away to whoever she wanted. The new wife here is the life tenant, the children the remainderman.
You can set up the same arrangement, but only after seeking legal advice. A lawyer will ensure that all documentation is properly done, and that everything goes through a smooth transition.