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A life beneficiary has a life estate, a restricted form of property ownership, where they can use the property for life but lose control upon death. They can sell the property, but the buyer only has control until the life beneficiary dies. The document creating the interest must specify what happens upon the beneficiary’s death. It can be useful for leaving property to heirs while allowing a friend to use it.
A life beneficiary is a person vested with a specific type of property right, called a life estate. This form of ownership exists in all common law countries, including the United States and the United Kingdom. It is a form of property derived from English common law.
There are many different ways to own a property. The easiest way to own a piece of land is for an absolute simple fee. A person who owns property for absolute consideration has the right to do whatever he wants with the property. He can enjoy it for life, he can sell it and he can want it to his heirs and pass it on.
There are also some more limited or restricted types of property ownership. A life property is a type of restricted property. When a person bequeaths an inheritance to a life beneficiary, the life beneficiary is entitled to use the property for the duration of his life in any way he sees fit, but loses control of the property immediately upon his death.
This means that a life taker cannot will his property to anyone else. The inheritance is valid only for the life of the named beneficiary. If he tries to want it from someone else or to leave it to the heirs, the court will not recognize these attempts, because the life beneficiary cannot create a greater interest than he has.
A life beneficiary can sell a property. If he does, however, he still can’t sell more interest than he has. Since the property expires upon the death of the intended beneficiary, the person buying the property will only have control of it until the life beneficiary dies, at which point the buyer will immediately lose the right to the property.
When the property is held as a vital asset, the document that created the interest usually must specify what happens when the beneficiary of the vital asset dies. Normally, the deed will designate a person obtaining the property upon the death of the life beneficiary. This person is referred to as the restoman.
Building a housing stock can be a useful planning tool. For example, someone might want to leave a property to their heirs, but might want to allow a friend to continue to enjoy the use of the property. By creating an estate for life, the friend can enjoy the use of the property until his death, but the owner can still leave the land to his children at the end.
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