Back in feudal times, (you know, the good old days of King Arthur, Xena Warrior Princess and the Black plague), there developed a system of land conveyance called estates in land. This method of property conveyance remains central to our modern law of real estate, both in theory and practice. An estate is an interest in land measured by some period of time. In our industry, we typically see 3 common types of estates: (1) Fee Simple, (2) Life Estate or (3) Leasehold Estate. Of these three, the life estate is most often misunderstood and one of the most common in terms of title claims. A life estate is an estate that will end at the death of a person ("to A for life"). The usual life estate is measured by the grantee's life (Owner conveys Amazing Acre to "Grantee for life"). The Grantee gets an interest in the land as long as the Grantee is alive. Upon Grantee's death, the land reverts back to the Owner ("the Grantor").
A person holding a life estate interest can ordinarily transfer, lease or encumber the property. However a person obtaining property from someone with a life estate interest gets only what the person holding the life estate had: an estate that ends at the death of the measuring life.
EXAMPLE: Erin gives to Kelly for life. Kelly gives to Brad. Kelly dies. The property reverts (returns) to Erin because Kelly only had a life estate and when Kelly gave the property to Brad, the most Kelly could give was a life estate (Nice going Kelly).
From a claims perspective, you can see why it is so important to insure that the individual in title has more than a life estate. Claims can be caused by failure to place the proper parties in title due to a failure to read the entire language in the vesting deed. As a result, a mortgage would be given to an individual holding only a life estate.
HERE'S THE QUIZ:
Patrice conveys Amazing Acre to Farah for life, then to Dave and his heirs, but if Dave dies before Farah, to Farah's children who survive Farah and their heirs. Farah has a child, Seven. No other child is born to Farah. Dave dies intestate (without a will) in a horrible kiln explosion. Seven dies intestate when he falls into a pump operating in a chocolate river. Then Farah dies thanks to a candlestick in the library.
Who owns Amazing Acre?
BONUS Question: Why?