Posted in Finance, Accounting and Economics Terms, Total Reads: 348
Definition: Life Estate
A Life Estate refers to one’s ownership of land for the duration of a person’s entire lifetime. Legally speaking, it is a real estate property that ceases at the death at which time the ownership of that particular property in question would then revert to the earlier owner, or may pass on to another person as the clauses may deem appropriate. The owner of this Life Estate is called a Life Tenant.
Quite often, these are created by donors who would be likely to believe that the respective beneficiaries would gain through the income of the estate more than a lump-sum one time inheritance. These estates, hence, exist in various instruments that produce income such as deposits, bonds, gas reserves etc.
Other such land ownership is lease and most long leases are held for a period anywhere between 99 and 999 years, they are interpreted either as a licence or a lease.