Definition
A life estate allows someone to live in and use the property for their lifetime, then ownership passes to someone else. Purchasing property with life estates is complicated.
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A life estate grants ownership rights during the life of a designated person but not permanently. For example, a parent may retain a life estate while giving the remainder interest to children. The life tenant has the right to live in and use the property but cannot transfer ownership beyond their lifetime. Life estates are often used in estate planning to maintain residence rights while transferring property. Purchasing a property with a life estate can be complicated and typically reduces the property value.
Pro Tip
Be cautious about life estates. They complicate ownership and future sales.
Example
The mother retained a life estate while transferring remainder interest to her children.