What is a life estate NY?

What is a life estate NY?

A “life estate” refers to an ownership interest in property the duration of a person’s life. This person is called a “life tenant,” therefore he or she is allowed to possess and use the property, can collect rent and profits, and is responsible for the costs of maintaining the property.

What are the benefits of a life estate?

Life estate pros Using a life estate helps avoid probate so your beneficiary can receive the property faster. The life estate cannot be used to satisfy the tenant’s creditors once they’re dead. The life tenant may be able to qualify for Medicaid benefits and protect the property from estate recovery.

Is a life estate considered an inheritance?

A life estate is a type of joint property ownership. Typically, the life estate process is adopted to streamline inheritance while avoiding probate. The life tenant retains all the rights and responsibilities of an owner except the right to sell or mortgage the property.

What happens if the life estate moves out?

If the life tenant decides they no longer wish to live on the property, that doesn’t mean the dwelling automatically goes to the remainder owner. Life means exactly that, and while the life tenant is still alive, he or she can rent the property and receive the rental income.

How do I terminate a life estate in New York?

Under New York law, in order to terminate an estate in real property that is subject to a condition subsequent, an action must be brought in Supreme Court (Real Property Actions and Proceedings Law, § 1953). The estate remains in effect until a judicial order directing its termination is issued.

What are the two types of life estates?

The two types of life estates are the conventional and the legal life estate. the grantee, the life tenant. Following the termination of the estate, rights pass to a remainderman or revert to the previous owner.

What happens to a life estate if the property is sold?

The life tenant cannot sell or mortgage the property without the agreement of the remaindermen. If the property is sold, the proceeds are divided up between the life tenant and the remaindermen.

How do I terminate a life estate?

A life estate may terminate, during the lifetime of the life tenant, upon the occurrence of any act providing for the termination in the instrument creating the life estate. A life estate may terminate by the merger of the estate of the life tenant and the estate of the reversioner or remainderman.

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