I am interested in purchasing a property that is currently in a life estate, all parties life estate holder and remainder interests are all willing to sell… can anyone help with how this needs to happen?
isn’t a life estate simply a revocable trust? if so, cannot the grantor instruct the trustee to sell? or the grantor can dissolve the trust, sell the property, and re-trust what’s left.
grantor deceased
Sounds as if you are dealing with two separate interests – the remainder estate beneficiaries and the life estate holder. Once the life estate holder abandons the property, or dies, title is vested in the remainder estate beneficiaries. You could purchase the beneficial interest held by the remainder estate beneficiaries and also pay the life estate holder to abandon the property.
You can also elect to purchase the remainder estate from the beneficiaries subject to the life estate holder’s interest. When the life estate holder dies, moves, or otherwise abandons the property, then the trustee conveys title to the remainder estate beneficiary. This may take some time to physically acquire clear title to the property, though may be less expensive than purchasing everyone’s interest outright.
Consult your attorney before taking any action.
Thanks Dave for answering my question, your reply makes perfect sense but as you stated I will consult an attorney also.
Explore your options. A property subject to an indeterminate term life estate is not quite as valuable as the same property with clear title. If you are willing to just acquire beneficial interest in the remainder estate and wait, you could get a bargain.
This approach does have some risk. A lot depends upon the terms of the trust and whether the life interest holder is or will continue to maintain the property.
Life Estate holder is an elderly woman who has not lived in the house for 6+ years, nursing home, it has been abandoned, all of the beneficiaries are ready and willing to sell they just want to make sure it’s all on the up and up. Not to mention one of the beneficiaries has power of attorney over the estate.
Sounds pretty straightforward. Have your attorney prepare a release or surrender of life estate for the life estate holder to sign. Draw up a purchase agreement between you and the trustee for the trust, then go to settlement.