Texas, like most other states, allows for less than the complete transfer of property. One of the most common types of limited transfer is called a life estate. It’s just what it sounds like–an estate that is limited in duration by a life. A life estate triggers unique rights and duties. It would be best if you met with a Waco real estate and probate attorney before entering into a life estate.
The Basics Of A Life Estate In Texas
There are two types of people who get life estates. The most common life estate is granted for the life of the grantee. But it is also possible that the life estate is given to a third party referred to as pur autre vie. In either situation, that grantee gets to possess the property for the rest of the grantee’s life. Upon the death of the grantee, the interest reverts to either the original grantor or to a third party, called a remainderman.
No specific words are required to create a life estate. But there must be clear intent that a life estate was intended. Common phrases indicating the creation of a life estate include “for life” or “until his/her death.” Because of the unique nature of a life estate, a life tenant has certain rights and duties exclusive to this type of ownership.
Rights of a Texas Life Tenant
A life tenant has these following rights:
- The right to present possession of the property: While a life tenant is not the only party with interest in the property, they have the exclusive right of possession, management, and control of the property for the duration of the measuring life.
- The right to all rents and profits during possession: If the property produces income, the life tenant has the exclusive right to it. This would include royalties from an oil and gas well if a producing well was in existence at the time the life estate was granted.
- The right to alienation: A life tenant has the right to sell, lease, mortgage, or otherwise alienate the property’s life estate. Measuring life still limits this right. For example, a life tenant may lease the property for the duration of the measuring life only.
- The right to invoke Texas homestead law, If applicable.
Duties of a Life Tenant
While in possession of the land, a Texas life tenant owes the following duties to future interest holders:
- The obligation to pay ordinary taxes on the ground and interest on a mortgage: A life tenant must pay taxes to the extent the property produces income. A life tenant is also responsible for interest payments on the properties mortgage, but not the principal.
- The duty not to commit waste: The most significant duty of a life tenant is that they may not use the property in such a way as to decrease the value of the property. In general, this requires that a life tenant exercise the ordinary care of a prudent person to preserve and protect the estate. Specifically, a life tenant has a duty not to commit the following three types of waste:
- Affirmative waste – A life tenant may not engage in voluntary conduct that decreases the value of the property. This includes the removal of minerals such as oil and gas. In some cases, Texas recognizes the “open mines” exception to this rule, which allows a life tenant to continue the operation of a mine or oil well already in existence at the time the life estate was created.
- Ameliorative waste – A life tenant may not change the character or use of the estate, even if it increases the value of the property. However, a life tenant may take any action to improve the productiveness of the property in its current use. For example, a life tenant may not convert a property that has been used traditionally as a farm into an apartment complex. Still, the life tenant may take actions to increase the productiveness of the property as a farm.
- Permissive waste – A life tenant may not neglect a property in such a way as to cause a decrease in value.
A life tenant who breaches a duty may be subject to suit by the remaindermen for damages and an injunction.
Contact Waco Life Estate Attorney
These are the highlights of life estate law. If you need a lawyer to analyze your rights as either a remainderman or a life tenant, or if you want to create a life estate, it’s important that you contact an attorney who has experience in these complicated matters. Call Dunnam & Dunnam at 254-753-6437 to discuss life estates with a Waco real estate lawyer.
Vance Dunnam, Jr. is a specialist in estate planning, probate and real estate. His is board certified probate and estate planning, residential real estate law, and commercial real estate law.