A life estate is an estate in which the owner has the right to possess and use the property for the duration of their life, after which it reverts back to the original owner or their heirs.
How does a life estate work in NY? A life estate is a type of ownership interest in real property that is limited by the natural life of the owner. In other words, the owner of a life estate has the right to use and occupy the property for the duration of their life, but they do not have the right to sell, transfer, or otherwise dispose of the property.
When the owner of a life estate dies, their interest in the property ceases and the property passes to the remaindermen, who are the people named in the life estate deed as the recipients of the property after the death of the life tenant. What happens when a life tenant dies? When a life tenant dies, the trust property typically passes to the remaindermen named in the trust document. The life tenant generally has no ownership interest in the trust property that can be passed on to others. Can a life tenant surrender their interest? A life tenant can surrender their interest in a property by conveying their interest to the remainderman. The life tenant would need to execute a deed, which would be recorded, conveying their interest in the property to the remainderman. What is the cost basis of a life estate? The cost basis of a life estate is the original cost of the property, less any depreciation that has been taken on the property. Who pays the inheritance tax on the death of a life tenant? The inheritance tax on the death of a life tenant is paid by the beneficiaries of the trust.