What is a Life Estate?
A life estate is created in Florida with a deed when a party retains an interest in the property for life (life tenant) with the remainder interest to other parties. A life estate can be a traditional one or an enhanced life estate (also known as a Lady Bird life estate). With the enhanced life estate, the life tenant may sell or mortgage the property without the joinder of the remainder interests. As a result when selling the property, the parties with the remainder interest do not have to sign the listing agreement, contract or closing documents if you have the enhanced life estate. It is easy to determine which life estate you have. Examine your deed.
If it is an enhanced life estate, the following words will appear after your name as the Grantee or Second Party:
for a life estate without any liability for waste, and with full power and authority in said life tenant to sell, convey, mortgage, lease or otherwise manage and dispose of the property described herein, in fee simple, with or without consideration, without joinder of the remaindermen, and with full power and authority to retain any and all proceeds generated thereby,
By the way, the enhanced life estate deed is known as a Lady Bird Deed because it is named after our former first lady, Lady Bird Johnson, the wife of President Lyndon B. Johnson.
If your life estate is the traditional one without the language cited above, the parties with the remainder interest will have to sign the listing agreement, contract and closing documents when the property is sold. It is important to consult an attorney when drafting a life estate deed to be sure you understand the alternatives available to you. The enhanced life estate is an estate planning tool used by many attorneys to avoid probate of real property after death. It is also an alternative to a trust. As a real estate and estate planning attorney, I counsel clients regarding these matters.
James A. Cioffi is one of the most experienced attorneys in South Florida today. In fact, he writes a legal advice column under theme of “The Juris Doctor” Feel free to contact James A. Cioffi confidentially regarding your legal question and he will personally respond. He can be reached at 561-747-6000 or visit his website at http://jamescioffi.com
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James A. Cioffi, Esquire
The Juris Doctor
250 Tequesta Drive, Suite 200
Jupiter, FL 33469