Posted on: 17th Dec, 2009 04:02 pm
My grandmother died in 1991 leaving the deed to her farm in my name and a life estate for my father. My father is insisting we sell and is demanding half the sale price. I believe he is only entitled to the value of his life estate. Can you please tell me how we determine what the value of his life estate is? I looked up the IRS publication and tables,but I wasn't able to determine what it meant. He is 76 and in Ohio.
Hi lkfrazier,
I would suggest you to contact a real estate attorney and take his opinion in this regard. As far as I can understand, your father will be entitled to the life estate only. I don't think he will be able to claim half of the sale price of the farm.
Thanks
I would suggest you to contact a real estate attorney and take his opinion in this regard. As far as I can understand, your father will be entitled to the life estate only. I don't think he will be able to claim half of the sale price of the farm.
Thanks
honestly, i've never heard of a dollar value being given to a life estate. i suppose it's a possibility, of course. if it exists i would think it would be some sort of statutory requirement - a real estate attorney might be the appropriate person to help you.
The dollar value should be .50441 of the equity in the property.
>>My father is insisting we sell and is demanding half the sale price.
Your Father doesn't have any right to make that demand. You're the Remainderman, and actually own the property, and in the long run it will be 100% yours (it's actually 100% yours today, but you can't access it until he dies - unless he doesn't keep up with his portion of responsibility). He's the life tenant, and his benefit is being able to live there until he dies. He's not entitled to anything else. And while he lives there, he's legally responsbile for paying the homeowners insurance and property taxes.
If he doesn't like the situation as it exists today, tell him he can leave. He has no other options.
Your Father doesn't have any right to make that demand. You're the Remainderman, and actually own the property, and in the long run it will be 100% yours (it's actually 100% yours today, but you can't access it until he dies - unless he doesn't keep up with his portion of responsibility). He's the life tenant, and his benefit is being able to live there until he dies. He's not entitled to anything else. And while he lives there, he's legally responsbile for paying the homeowners insurance and property taxes.
If he doesn't like the situation as it exists today, tell him he can leave. He has no other options.
tough love
>>tough love
I laughed when I read that, but you're right George. Grandma's intention and desire was for both her son and grandson to always have a place to live, for as long as they live, so she created a life estate to enable that to happen. All too often, the life tenant is sore about the arrangement, because they're never able to receive any cash from the arrangement. They don't seem to understand they're being allowed to live there mortgage free, resulting in a hugh savings.
If they sold the property, the grandson would get burnt and Dad would make out like a bandit.
I laughed when I read that, but you're right George. Grandma's intention and desire was for both her son and grandson to always have a place to live, for as long as they live, so she created a life estate to enable that to happen. All too often, the life tenant is sore about the arrangement, because they're never able to receive any cash from the arrangement. They don't seem to understand they're being allowed to live there mortgage free, resulting in a hugh savings.
If they sold the property, the grandson would get burnt and Dad would make out like a bandit.
your previous tidbits were precisely that, raymond, and that's how i read what you had to say earlier. and believe me, i agree that tough love is the way to treat a lot of US who are foolish enough to assume some things, take people and ideas for granted, and who think that we're so smart after all.
yes, i included myself in that grouping, and anyone with a little sense would take a look in the mirror and recognize him- or herself in that description too.
i'm glad you got a chuckle out of it.
yes, i included myself in that grouping, and anyone with a little sense would take a look in the mirror and recognize him- or herself in that description too.
i'm glad you got a chuckle out of it.
"Life estate" and "Remainder" are a division of the 100% fee simple title to a parcel of real estate defined by time (before and after death). In this sense they are very similar to a "time share" vacation property where fee simple ownership is divided into weeks owned by owners of the unit.
If the entire time share is sold the net price or pay out to each owner is directly proportional to the number of weeks owned.
The division of sale proceeds between the holder of a life estate and the holder of a remainder interest works the same way. One uses statistical "mortality tables" to define the probable life expectancy of the life tenant (in percentage terms), and that percentage of the net purchase price is given to the life tenant with the balance awarded to the holder of the remainder estate.
There is more to a life tenancy than the right to occupy and to receive the profits of a the property during the life tenant's life.
Sale of the entire property by either the life tenant or the remainderman cannot be done, UNLESS the document (deed or Will) setting up the fee simple division gave one party (life tenant or remainderman) a "power of sale." Such language can also divide the proceeds of sale to a number unrelated to mortality tables.
Absent special language neither the holder of a life estate nor the holder of a remainder interest can simply demand a sale of the real estate. A demand for sale by either of them can be achieved by filing an "action to partition" the real estate in a a county Court of Common Pleas pursuant to statute that expressly defines the procedure. (Side note " Negotiated cooperation always beats costs of a court fight)
Unless restricted by the creating documents, private sale of the life tenant or remainder interest is possible, but the negotiated price may well vary from the statistically derived mortality table figure based upon the health of the life tenant.
One must never forget that the laws governing real estate are specific to each of our 50 states. As recommended in another response consultation with a local attorney who has some expertise in real estate law is prudent.
I can speak to Ohio law because I have practiced here for almost 40 years and a significant part of my practice has involved real estate. I have some knowledge of other states' laws but I would be very reluctant of giving any advice concerning those states.
This reply is undoubtedly late and hopefully IKFrazier's question has long since been resolved peacefully. Nevertheless I hope this post may help someone facing a question similar to Mr. Frazier
nkmckeown
Ohio Attorney
If the entire time share is sold the net price or pay out to each owner is directly proportional to the number of weeks owned.
The division of sale proceeds between the holder of a life estate and the holder of a remainder interest works the same way. One uses statistical "mortality tables" to define the probable life expectancy of the life tenant (in percentage terms), and that percentage of the net purchase price is given to the life tenant with the balance awarded to the holder of the remainder estate.
There is more to a life tenancy than the right to occupy and to receive the profits of a the property during the life tenant's life.
Sale of the entire property by either the life tenant or the remainderman cannot be done, UNLESS the document (deed or Will) setting up the fee simple division gave one party (life tenant or remainderman) a "power of sale." Such language can also divide the proceeds of sale to a number unrelated to mortality tables.
Absent special language neither the holder of a life estate nor the holder of a remainder interest can simply demand a sale of the real estate. A demand for sale by either of them can be achieved by filing an "action to partition" the real estate in a a county Court of Common Pleas pursuant to statute that expressly defines the procedure. (Side note " Negotiated cooperation always beats costs of a court fight)
Unless restricted by the creating documents, private sale of the life tenant or remainder interest is possible, but the negotiated price may well vary from the statistically derived mortality table figure based upon the health of the life tenant.
One must never forget that the laws governing real estate are specific to each of our 50 states. As recommended in another response consultation with a local attorney who has some expertise in real estate law is prudent.
I can speak to Ohio law because I have practiced here for almost 40 years and a significant part of my practice has involved real estate. I have some knowledge of other states' laws but I would be very reluctant of giving any advice concerning those states.
This reply is undoubtedly late and hopefully IKFrazier's question has long since been resolved peacefully. Nevertheless I hope this post may help someone facing a question similar to Mr. Frazier
nkmckeown
Ohio Attorney
the life estate has full rights to possession and cannot partition a remainder interest which is a future interest with no rights to possession.