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Who is technically responsible for paying taxes and house insurance - the person with the reserved life estate or the remainderman? Can anyone help?

raymond · Posted: Sun Jan 03, 2010 3:48 pm Post subject:

The person with the Life Estate. If they're not paying the property taxes, or homeowners insurance, or maintaining the property properly, the Remainderman should use the legal process to change things.

gmakerley · Posted: Sun Jan 03, 2010 10:12 pm Post subject:

raymond, my experience with life estates is different. maybe it's a local thing. with what i've seen, a person - generally elderly - decides to sell his or her home to a family member but desires to continue to live there. so the property is deeded to the family member with a caveat that there will be a life estate on behalf of the current owner/seller. that makes the new owner liable for all indebtedness.

do you think this is just a legal skirmish between the states?

apexoffice · Posted: Mon Jan 04, 2010 7:10 am Post subject:

I have to agree with George on this one. The deed belongs to the remainderman, leaving them ultimately responsible for the estate.

It is similar to a leasehold estate. It may be contractual agreement for the tenant to pay all expenses, but if a lien is placed on the property, it becomes the deedholders problem. This doesn't mean that the deedholder doesn't have legal options against the tenant.

apexoffice · Posted: Mon Jan 04, 2010 7:38 am Post subject:

Actually, after a little investigation, I should amend my statement. It depends on how the life estate was created and the wording of the deed. A life estate tenant may retain full ownership (fee simple) until death, in which the deed will THEN be conveyed to the remainderman. In this scenario, the life estate tenant would be responsible for the taxes and all debts. In most jurisdictions, if the life estate tenant does not pay taxes or debts, or fails to properly maintain the property, a judge can either accelerate conveyance of the deed or cancel the life estate to be repossessed by a lienholder. The original poster might want to discuss options with a real estate attorney based on the details of the deed.

raymond · Posted: Mon Jan 04, 2010 8:53 am Post subject:

>>A life estate tenant may retain full ownership (fee simple) until death, in which the deed will THEN be conveyed to the remainderman.

That's the way I learned how all Life Estates work. I'm not aware of any variations. (it's been 7 years since I studied for my license, and that's the only scenario I remember learning).

gmakerley · Posted: Mon Jan 04, 2010 9:03 am Post subject:

and i never studied the subject - i was introduced to life estates while i was a consumer lender working at a bank. education wasn't big on the agenda all those years ago, so i learned from asking questions of parties who i knew had awareness of many of these intracacies.

Guest

Seller can stay in the house on 1/2 acre until she dies. Can buyer pay for general liability insurance in case someone is hurt on the 1/2 acre? It is a 30 acre tract.

gmakerley · Posted: Fri Jun 25, 2010 10:58 am Post subject:

That would seem to be a question specifically tailored for the insurance industry.

alencooper · Joined: 30 Jun 2010 Posts: 5 2.15 Dollars($)

I think that apportions responsibility the taxes and the insurance for the house insurance should be pay by the remainder. It is generally accepted, from what I have seen, that the person is responsible for taxes, interest on a mortgage, and general maintenance after the homeowners. Major items are often negotiated but realistically, the remainderman is responsible to prevent and has the ownership of the premises so I would think that arguably it would be the responsibility of the person or the remainderman to pay for all.

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Life Estate - Who owns the property?