Table of Contents Hide
- What Is an Estate?
- What Is a Life Estate?
- What is a Pur Autre Vie Life Estate?
- Example of Pur Autre Vie in Real Estate
- Is It Possible to Create a Life Estate Pur Autre Vie?
- Can My Heirs Inherit an Estate Pur Autre Vie?
- Pur Autre Vie FAQs
- What is the difference between life estate and life estate pur autre vie?
- What's the difference between reversionary interest and remainder interest in a property?
- Is a reversion an estate?
When used in property law, the legal term “pur autre vie” means “for the life of another” in French and refers to a life estate that a grantor bestows to another person, known as a life tenant, who can possess and utilize an estate, commonly a family dwelling, throughout the life of a third person. We’ll go over how it works in more detail below. A financial advisor can provide expert advice and vital insight as you prepare your estate or revise an existing estate plan.
What Is an Estate?
An estate is a person’s legal rights, entitlements, and interests in all types of property. A person who owns a house and the land on which it is built has a slew of rights over both the land and the house. An estate’s ownership can be divided into time periods; for example, one piece of property may have a present owner and a designated future owner. The duration of an estate is what distinguishes it from other sorts of estates.
What Is a Life Estate?
Estates can be classed in a variety of ways. One method is a classification that is commonly used in real estate. A freehold estate is one in which you have the exclusive right to use a property indefinitely. A leasehold estate has a temporal constraint. A life estate is a type of freehold estate in which the life tenant is promised the use of the property for the rest of their life (sometimes called a life estate “pur sa vie,” which means “for his own life”). In a life estate, the remainderman is whoever receives the life estate after the life tenant dies. When the life tenant dies, the life estate’s life comes to an end.
A life estate’s goal is to provide for the life tenant. A shared goal is to ensure that the proceeds of the life estate are distributed to the next generation or another party upon the death of the life tenant.
Assume Josh was married to Maria. When Josh married Maria, he had a child. They didn’t have any children of their own. If Josh wanted to ensure that his child would ultimately possess the family home where Maria lives, he could create a life estate and make Maria a life tenant. Then, once Maria dies, he could name his child as the eventual beneficiary, also known as the remainderman.
What Is the Procedure for Establishing a Life Estate?
Assume you wish to give someone else your property, but only for a limited time. A life estate, on the other hand, is what you’d use. A life estate grants someone else possession and restricted ownership of real estate for the life of their or another person’s life. The life tenant is the person who owns the life estate.
What Are the Different Types of Life Estates?
In this scenario, there are two options available:
#1. Traditional Life Estates
These are created by the grantor through the use of a will, deed, or trust. An ordinary life estate is one in which the life estate is based on the life of the life tenant. The estate is terminated when the owner dies. If the estate is based on a life other than the life tenant’s, it is referred to as a pur autre vie life estate, which translates as “for another’s life.”
Because life estates are not indefinite, you must know what happens to ownership when the life estate is terminated. If the deed includes a remaining interest, ownership will pass to a third party. This is referred to as a prospective, nonpossessory interest in the property. If there is no remaining interest specified in the deed, the title of the real estate reverts to the original owner. This is referred to as a reversion interest.
Consider this: if ownership in a pur autre vie life estate is dependent on the life of a third party, what if the life tenant dies before the third party? So, until the third person died, the estate would transfer to their heirs.
#2. Legal life estates:
Unlike traditional life estates, which are produced by the grantor’s actions, legal life estates are created automatically by law. Originally, they were meant to preserve a non-owner spouse’s interest in the event of the death of an owning spouse.
You should be familiar with the following terms:
- Dower: The wife’s life estate in her deceased husband’s real estate.
- Curtesy: Curtesy is the husband’s life estate in his deceased wife’s real estate.
- Homestead: A portion of the value of a property owner’s principal dwelling is protected from certain debt judgments.
What is a Pur Autre Vie Life Estate?
A life estate that is “pur autre vie,” or depending on the life of another, can also be established. Using the preceding example, here’s how that might operate. Assume Josh wanted his child to be able to dwell in the family home for as long as his wife Maria is alive. To do this, Josh, as the grantor, would create a life estate pur autre vie, allowing his son, as life tenant, to dwell in the family home until Maria’s death.
The property in a life estate pur autre vie can be sold, mortgaged, or leased to another person with the agreement of the third person or beneficiary by the life tenant.
The future interest that follows a life estate pur autre vie is either a reversion or a residue. If John gives Bill his automobile for life, he keeps the reversion. It is referred to as a remnant when a third party holds the future interest. For example, John gives his car to Bill for the rest of his life, and subsequently to Mark. Mark, a third party, owns John’s car’s future interest or remainder.
A life estate pur autre vie can be created in a variety of ways. Destroying a contingent remainder or a remainder that has not yet vested can result in the formation of a life estate pur autre vie. A contingent remainder is one granted to an unborn individual or one made contingent on an occurrence other than the natural end of the preceding estate.
Example of Pur Autre Vie in Real Estate
Because the word implies “for another’s life,” a real estate deal that is based on the lifespan of another person. The selected person who retains the real estate investment is known as a life tenant, however, the distinction between a life estate and a life estate pur autre vie is that the individual can lease, mortgage, or sell the property for the remainder of the estate’s lifetime. The new parameters are in effect for the rest of the other person’s life. Here’s an illustration of how that would operate.
Mr. Davies is a widower who owns his own home, but he falls in love with another widow named Mrs. Mary. Mrs. Mary wants to be close to her children even though they want to marry. Mr. Davies does not want to sell his house, but he also does not want to leave it unoccupied. He decides to rent it out to Mr. Roy but gives him a life estate.
When Mr. Davies dies, Mr. Roy must vacate the rental since the property reverts to the estate. This is a circumstance where the tenant will be there for the rest of his or her life. However, if Mr. Davies gives Mr. Roy an acre of his land in exchange for Mrs. Mary, a pure autre vie is in place. Mr. Roy will continue to have an interest as long as Mrs. Mary is living.
Terms Relating to Pur Autre Vie
A pur autre vie is frequently associated with two terms. These are known as reversion and remainder.
There is a future interest in possession if there is a residue in the real estate. After the present tenant or fixed interest ends, an individual has the right to possess and own the home or property.
The property or assets are restored to the original owner in this scenario. This usually occurs after a certain period of time has passed or after a specific activity has taken place.
Is It Possible to Create a Life Estate Pur Autre Vie?
A life tenant cannot create a pur autre vie for the property in which they have an interest. The life estate and any other arrangements relating to a pur autre vie must be established by the original property owner. There are various advantages to creating a life estate deed:
- There is no will requirement for the property owners.
- Transferring a deed is a simple and inexpensive process.
- Property owner’s peace of mind
- The arrangement provides assured accommodation for the property owner’s friends and relatives.
- Property can be transferred without incurring gift tax.
- Medicaid lien protection for end-of-life treatment that is more than 60 months old
Can My Heirs Inherit an Estate Pur Autre Vie?
It’s a wonderful gift to be able to protect your land for your children but making sure the right people get the deed can be a complicated procedure. Specifications for surviving spousal interest have already been set in a life estate situation. Many states have enacted the Uniform Probate Code, which grants the surviving spouse an elective interest in the deceased’s possessions. However, if the deed is written as a life estate deed, it avoids probate altogether. As long as the specified receiver is still alive, the pur autre vie can be handed on to other heirs.
Read also: INTER VIVOS TRUST: Definition and All You Need To Know
A homestead may be established when considering keeping a piece of property for the deceased’s family. This is a life estate designed to protect a family for the duration of their residence in the home. Because some states do not allow the sale of a homestead, this provides a safeguard against creditors and bankruptcy (even to pay debt accounts). Failure to pay real estate taxes or default on other obligations secured by the property, on the other hand, can reduce the family’s claim.
Family problems can be difficult to navigate. Such issues are sometimes best handled by establishing a life estate. Other times, though, they are best addressed by establishing a life estate pur autre vie. “Pur autre vie” is a French expression that translates as “for the life of another.” Handling things with a life estate pur autre perspective indicates that someone provides another person access to or uses an estate, generally a dwelling, but only for as long as a third person is alive.
Pur Autre Vie FAQs
What is the difference between life estate and life estate pur autre vie?
Any life in existence at the time the interest is generated can be used to calculate the value of a life estate. A life estate pur autre vie (“for the life of another”) is a life estate that is not measured by the holder’s life.
What's the difference between reversionary interest and remainder interest in a property?
The primary distinction between a reversion and a remainder is that a reversion is held by the original conveyance’s grantor, whereas “remainder” refers to an interest that would constitute a reversion but is instead transferred to someone other than the grantor.
Is a reversion an estate?
An estate in reversion is a one-of-a-kind sort of estate. It enables one person to transfer possession of his real property while remaining owning it. Furthermore, it enables an owner to control who resides in his real estate even after he has passed away.