Life estate VS fee simple

[Webbed Feet]

:Eyecrazy: :Eyecrazy: :Eyecrazy:

Mr. Carlsen,

Are you ok? .... Everything okie dokie with the family? If not I am sure everyone on the forum offers their best and prays all will return to normal for you as soon as possible.

Webbed.

 

[Richard Carlsen]

Mr. Carlsen,

Are you ok? .... Everything okie dokie with the family? If not I am sure everyone on the forum offers their best and prays all will return to normal for you as soon as possible.

Webbed.

I appreciate the kind words and prayers but why would you say this?

 

[Webbed Feet]

Mr. Carlsen,

Because for a moment there I really wondered if you are ok this morning! ... If a Life Estate has no value I'd like "the Dog" to contact me with the Life Estate owner name and phone number so I can take that worthless ownership possession off her hands for her. Do you think $500 would be good for that worthless Freehold Estate? How about $5,000? .. I could probably make that back in rent in less than ten months and be in the black before a year and a half had passed. Even having no idea what the property would rent for in that location.... But hey, I'm a silly risk taker with property rights that have no value whatsoever!

Then we come to the fact a Life Estate is a Freehold Estate. A Freehold Estate has a title. A leasehold estate is a Less-than-freehold Estate. A Less-than-freehold Estate has no title. Break open your texts. Try to find something called a "Life Estate Leasehold" with a "life leasehold interest" referring to a Life Estate. If you have such a text, donate it to the library or toss it in the trash. Preferably the later.

So after reading your post, I was concerned if you were well this morning! I am glad to hear all is well and I should not have taken you literally like I did.

Webbed.

 

[Richard Carlsen]

A life Estate has no value because it cannot be transfered, one of the things that something must possess in order for it to have value.

 

[The Warrior Monk]

A life Estate has no value because it cannot be transfered, one of the things that something must possess in order for it to have value.

Not true.

The life estate has plenty of value to the life tenant. Just because something doesn't have value to one person doesn't mean that it doesn't have value to someone else. That's why we have more than one type of value definition.

Also, by saying that the life estate has no value, you are implying that the remainderman interest has the same value as the fee simple. That would rarely be the case. A property that cannot be occupied by the owner (i.e., remainderman) does not have the same utility as a property that can be occupied. Would you pay the same for the following:

1. A property you could occupy; and
2. A property you could not occupy nor collect rent from?

Lastly, it is not necessarily true that the life estate cannot be transferred. There are typically restrictions, but in the one's I've seen occupancy was not restricted only to the life tenant.

 

[Richard Carlsen]

The life estate has plenty of value to the life tenant. Just because something doesn't have value to one person doesn't mean that it doesn't have value to someone else. That's why we have more than one type of value definition.

Also, by saying that the life estate has no value, you are implying that the remainderman interest has the same value as the fee simple.

The life estate may have value to the holder of the life estate but we are not normally concerned with appraising that value to the individual. It is not applicable to the market value of the real property except as a loss possessory interest or loss of utility. If your definition of value is the value to the holder of the life lease, so be it. However, the holders possessory interest in a non-transferable life estate does not translate to the real property, assuming that we are using the definition of market value.

If the life estate is in fact transferable, then it is not a true life lease or estate but is simply some other kind of a leasehold interest.

And no, I am not saying that the remainderman interest has the same value as if the life lease did not exist. He owns the property fee simple but does not possess the full bundle of rights due to the existence of the life lease. The fee simple market value of the property would certainly be decreased by the loss of utility of the property due to the life lease. However, just because there is a loss of value due to the life lease does not mean that there is value in the life lease. Every single life lease I have ever seen or dealt with is extended to a specific individual and cannot be transfered to any other individual or entity except to renounce. If the life lease cannot be transfered, (though it's existence certainly can effect the property's value), it (the life lease) in itself can have no value since for something to have a value, it has to be able to be transfered.

Here's an example that we all should understand: A real estate appraisal license is valuable to the person to whom the license is issued. However, it has no value to anybody else since it cannot be transfered. The same holds true for the life lease.

 

[Webbed Feet]

A life Estate has no value because it cannot be transfered, one of the things that something must possess in order for it to have value.

Mr. Carlsen,

I really don't want to just prove you incorrect for the sake of proving you incorrect. But rather for the sakes of anybody reading this.

You better research this.... http://en.wikipedia.org/wiki/Life_estate

A Life Estate cannot be inherited. One can sure as heck be sold or transfered to another party. My guess is that you are incorrectly completely hung up on the difference between owning and transfering the estate, versus altering who the measuring life is. Correct, in that I offhand cannot think of a way to alter who the person is that is the measuring life short of extinguishing the Life Estate and creating a new one. But as long as the person who is the measuring life is alive, the estate exists and can be transfered to anybody.

Little secret fact I think you are missing. The measuring life does NOT have to be the person who the Life Estate was granted to! The measuring life can be anybody. For Pete's sake, it can be a dog even! "the Dog" could have granted a Life Estate to that lady (Grantee) for the life of a certain monkey at the zoo.

The above is why the Wikipedia information is stating an example where the grantee of the Life Estate has sold the Life Estate "from A to B"

I do not agree with a portion of the "Uses of a life estate" on Wikipedia as it was published showing a "vested fee simple remainder interest," and I will maintain that without possession rights the remainderman has a lesser Freehold Estate that is not "Fee" until the interests merge again at a later date upon the death of the measuring life. But I am sure there are people that want to debate that with me. Maybe some court cases say I am incorrect on that. What else is new?

Webbed.

 

[Fred]

A life Estate has no value because it cannot be transfered,

And why can't it be transferred?

If the life estate is in fact transferable, then it is not a true life lease or estate but is simply some other kind of a leasehold interest.

If the life estate isn't a tenancy, then why do they call the holder of the life estate a life tenant.

And no, I am not saying that the remainderman interest has the same value as if the life lease did not exist. He owns the property fee simple but does not possess the full bundle of rights due to the existence of the life lease. The fee simple market value of the property would

FWIW, this is where some of you lose me. You are doing fine referring to the fact that within the real estate, there is more than one property and then you say "the" property, and I can never be sure, which one is "the" property.

I will maintain that without possession rights the remainderman has a lesser Freehold Estate that is not "Fee"

We know - no matter how many sources contradict you.

 

[Richard Carlsen]

A life estate (or life lease as we commonly call them) is granted from the deed holder to the life estate holder for the purpose of that holders right to retain and use a specific property for the balance of their lives. Normally, the right is granted to one party (could be a dog I guess). However, the holder of the life lease cannot sell that right to a third party since the right is granted exclusively to one person by name. The life lease is not transferable. And therefore, if it is not transferable, it has no market value because a market does not exist.

 

[Fred]

However, the holder of the life lease cannot sell that right to a third party since the right is granted exclusively to one person by name. The life lease is not transferable. And therefore, if it is not transferable, it has no market value because a market does not exist.

But rights are always transferred to someone or something by name, why does the fact that there is a name make a difference now?

Is it the fact that the two parties probably wont' live the same amount of time that is making think there is no transferability? When A has a life estate and sells to B, the right to use can transfer but the duration of the tenure cannot change. B has a right to use for the duration of A's life. I might get Web in a tizzy again, but the term "por autre vie" has been occaisionally used to describe such a circumstance.