• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Life Estate

Status
Not open for further replies.

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I do no like the new search feature. I know this has been discussed but I can not find it.

Lady deeded her house to the daughter with a Life Estate and is currently living there. So legally who is the owner? The daughter of the Mother? I am thinking the daughter since the deed is in her name.
 

C. Kevin Bokoske MAI

Junior Member
Joined
Jan 30, 2002
Professional Status
Certified General Appraiser
State
Florida
I think the question can be re-worded to, "Who Owns What?". This entails partial interests. The mother has a life estate, which is a partial interest and can be valued; the daughter has an encumbered partial estate, less than fee simple, that can also be valued.

Kevin
 

Head Surfer

Administrator
Staff member
Founder
Moderator
Joined
Jan 4, 2002
Professional Status
Retired Appraiser
State
Florida
Originally posted by Jeff Horton@Apr 21 2003, 09:15 AM
I do no like the new search feature. I know this has been discussed but I can not find it.

Lady deeded her house to the daughter with a Life Estate and is currently living there. So legally who is the owner? The daughter of the Mother? I am thinking the daughter since the deed is in her name.
I searched for "life estate" as a phrase and used the parameters of any date, any forum and exact match, and got 9 topics and all were very specific to "life estate".

They are here

This search feature is much more accurate than the other board and will get you right to your relevant data, IF you take the time to set the parameters for your search.

Also we have extensive HELP files (the link is right next to the search feature) and one of help files is "how to search topics and posts", and it tells you about setting your parameters.

Please read our help files before complaining about a feature, or at least post your complaint or reqeust for help in the Forum Help forum instead of the Urgent Help Needed or other forums as I am subscribed to the Forum Help forum and will be able to reply promptly, but do not read all the posts in most of the other forums.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Jeff,
Yes, the fee title is "owned" by the remainderman, not the life estate, but that does not answer the question of which interest your are appraising?

Kevin,
I would re-word the question from "who owns what" to HOW LONG does life estate "own" the biggest stick in the bundle of rights, the right of use, before it conveys to the remainderman (or in this case remainderwoman) - if ever :D

I understand, in the abstract, how to appraise a property subject to life estate. In real life, well, that's another story. A few years ago, I came across a web site where a fellow had partial interest sales, but no life estate sales.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I would re-word the question from "who owns what" to HOW LONG does life estate "own" the biggest stick in the bundle of rights, the right of use, before it conveys to the remainderman (or in this case remainderwoman) - if ever

Exactly. :D
It can be valued, but not fun or easy. The lender may require a life insurance policy, them being the beneficiary, just in case it didn't make the 15 year loan. :p
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
As I understand this, the daughter is now the owner with the Mother living there. Mom wants to borrow a small amount of money to remodel with. Daughter has no problem and applies for the loan in her name. Both parties are in agreement. Problem is now on the the Appraiser to determine the value. Mr Appraiser is going to drop this back in Ms. Loan Officers lap and ask what rights do they want this appraised in since it is obviously not Fee Simple.

Mr. Appraiser learned to listen closer to what Mrs. Loan Officer says from now on! :blink:
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
B)
Having taught real estate law to Real Estate Broker candidates for over 10 years, thought I would add my 2 cents worth.

In the situation described, the life tenant(mother) owns the property for the duration of her lifetime. She can sell what she owns, rent what she owns, mortgage what she owns, but at her death all rights owned, mortgaged, sold, rented or otherwise conveyed comes to an end. The remainderman(daughter) with the filing of a death certificate to clear title, acquires an unencumbered title to the property. It should also be noted that the one thing the life tenant(mother) cannot due is to commit waste of the property(can't have it demolished, substantially modified causing a loss of value, etc). Difficult to figure out a value for what the life tenant owns. It can be done with use of an actuary table. A good life insurance policy also helps.

Also, a life estate can be given to one person, based on the life of another. This is known as a "Life Estate Pur Autrie Vie". Example, elderly land owner has a handicapped family member. Land owner makes an agreement with a person to care for the handicapped family member after the land owners death, so long as the handicapped family member lives. On the death of the designated family member on whom the life estate was given, title reverts to the designated remainderman.

That would also be difficult, but not impossible to appraiser.

Don Clark
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Can you say "complex appraisal assignment"????

Are you appraising the "life estate" or partial interest being held by daughter?
 
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Mike, Don & Others,

Seems like to me the daughter's interest is ownerhip in fee simple, subject to a Life Estate. Seems like you'd value the fee simple interest as if it were not subject to the Life Estate, then value the Life Estate, then subtract that value from the whole and what's left is the value held by the daugher as remainderman. Not as easy as it sounds.

The legal literature for Florida lists several simple, or rule-of-thumb methods that have been used and approved various local courts over the years. None were very convincing, but they worked.

Interesting question, Jeff!

Tom
 
W

walt kirk

Guest
It seems to me that if the life tenant and the remainderman plan to sign the mortgage the only value you need is the market value of the fee simple interest. Don't complicate it unless you really need to.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks