What Is A Life Estate? | Real Estate Exam Prep

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Your real estate licensing exam will no doubt have an exam question regarding Life Estates. In preparing for your real estate exam, you will need to know these key real estate terms. This real estate exam prep video discusses everything you need to know about Life Estates.
Key real estate terms discussed in this video:
Freehold Estate
Fee Simple Absolute
Life Estate
Remainderman
Reversionary Interest
Life Tenant.
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P.S. Nothing in this video shall be construed as legal or financial advice and is for INFORMATIONAL purposes only! Please consult with a competent attorney, financial advisor, and your broker before implementing anything you’ve learned from this video. Likewise, the issues discussed herein may not be applicable in your state or local jurisdiction.
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7 авг 2024

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Комментарии : 146

@TheRealEstateClassroom 4 года назад

More real estate exam prep materials at www.TheRealEstateClassroom.com

@gillianperkins4946 4 года назад

Hi Paul, great video. I went on a listing appointment where a couple wanted to sell their condo. I listed and found a purchaser. When the title search was done, we found out the couple - my sellers - were life tenants. They did not tell me and I think, they really thought they owned it. The contract fell apart but it sure was a learning experience.

@TheRealEstateClassroom 4 года назад

Thank you, Gillian for your comment. That's why we have title searches and abstracts done 😁

@SophiaBernal-qw3cf 9 месяцев назад

Thank you for simplifying Freehold Estates which can be confusing. The visual demonstration and explanation made it easy to comprehend.

@TheRealEstateClassroom 9 месяцев назад

Hi Sophia... you're welcome! Glad we could be part of your study routine

@Vectorp47 3 года назад

I have read many different sources on this topic and have watched many videos. By far, you have explained this the BEST!

@TheRealEstateClassroom 3 года назад

I appreciate your comment for sure! :o)

@rubinax 2 года назад

Thanks for the clarifications in a simple manner! My favorite part? "Sally is SOL."

@TheRealEstateClassroom 2 года назад

You're welcome!

@angiehayes775 2 года назад

Agreed!

@veronicat.3918 3 года назад

You are absolutely the best. God bless your knowledge. I appreciate your teaching from the bottom of my heart.

@TheRealEstateClassroom 3 года назад

Wow, thank you... I appreciate you leaving such an awesome comment. Best of luck with your studies!!!

@zaeburris426 2 года назад

this is the only video i have found where someone could explain my confusion simply and concisely. THANK YOU!! already subscribed and looking forward to watching more videos.

@hey-hi-hello Год назад

This was a lot more helpful than what I was simply reading lol. Thanks!

@TheRealEstateClassroom Год назад

Thank you!

@muhammadsalim9486 Год назад

MR I GIVE U CORDIAL THANKS. U TEACHING WITH EFFETIVE METHOD. NOT TALKING TOO MUCH RATHER THAN SAYING MAIN POINT. WITHIN SHORT TIME PEOPLE CAN UNDER STAND. TAKE CARE AND MAKE MORE VIDEOS. THANKS SIR

@TheRealEstateClassroom Год назад

Thank you!

@mikezawol7192 2 года назад

thank you for clearing this up Paul, was having a tough time grasping the remainderman concept until this video.😁

@TheRealEstateClassroom 2 года назад

You're welcome!

@marianaposto10 Год назад

Thank you for making sense of this. Your detailed explanation truly made this click for me.

@TheRealEstateClassroom Год назад

Your welcome! :o)

@azulpineda3863 3 года назад

I just started to study real estates and I was really confused about selling a property with a life estate. now is much clear ! thank you.

@TheRealEstateClassroom 3 года назад

Thank you

@marielarodriquez6117 2 года назад

I went to a virtual course and still have questions and concerns,Thank you so much for all of these great videos, goin for the test soon watching your channel make me feel more confident

@TheRealEstateClassroom 2 года назад

You're welcome... let us know how you do on the exam....

@sabithasankhan7164 Год назад

couldn't have explain it better thank you

@TheRealEstateClassroom Год назад

Thank you, Sabit! I appreciate you leaving a comment😁

@vivianleonard669 3 года назад

Best explanation I’ve heard by far! Thank you!

@TheRealEstateClassroom 3 года назад

Thank you, Vivian!!! I appreciat you taken the time to drop me a comment on the channel. Best of luck!!!!

@mpesce6667 2 года назад

So greatly explained! Thanks

@angiehayes775 2 года назад

Super helpful! Thank you so much!

@TheRealEstateClassroom 2 года назад

You're welcome!

@brendaernst310 6 месяцев назад

This helped me understand life estates immensely! Thank you!

@TheRealEstateClassroom 6 месяцев назад

You're welcome

@josuesyprienmarseille2842 Год назад

Thank you for the detailed, super clear explanation 👍

@TheRealEstateClassroom Год назад

Welcome!

@danielbourque4664 3 года назад

Excellent explanation. Thank you!

@TheRealEstateClassroom 3 года назад

Glad it was helpful! Keep on studying :o)

@ralphraymond__ 2 года назад

Thank you for helping me understand conventional life estates, how about Legal Life estates now? Homestead, dower and curtesy and elective share? Would it be possible to make a video explaining those? Other than that, thanks a lot! your videos are extremely helpful.

@jaybeeo1530 3 года назад

Love these vids! Gets right to the point

@TheRealEstateClassroom 3 года назад

Thank you... I appreciate you taking the time to leave a comment! Best of luck!

@guillermopalomino8305 3 года назад

Thank you, your videos helped me pass the exam

@TheRealEstateClassroom 3 года назад

Thank you and congrulations on passing your exam! Best of luck!

@stephaniedblendo1081 4 года назад

Thank you, Paul very helpful

@TheRealEstateClassroom 4 года назад

Thank you

@juliar6874 Год назад

🗽🎶❤️ Hi, Paul! Im really impressed by your video! You are great teacher and exactly one that I was looking for through tens of videos! Im soooooo happy !!!You made my day ! THANK YOU VERY MUCH, Paul! Hopefully all you teach fits to Florida. Have a beautiful day! 🗽🎶❤️

@TheRealEstateClassroom Год назад

Hi Julia... that's really kind of you to say! I appreciate your comments. Keep studying... you got this!!!! 😁

@juliar6874 Год назад

@TheRealEstateClassroom 🗽🎶❤️ WOW!!! You responded so quickly! Thanks again, Paul! Which state do you teach in if it's not a secret?

@TheRealEstateClassroom Год назад

@@juliar6874 I am in Omaha Nebraska

@katya4307 3 года назад

Answered my questions from the first video. I was thinking, who would buy a house that they will lose interest to lol, but you clarified that it rarely happens for that reason. I guess if it was an older couple buying (and the measuring life is a younger person), then it could make sense? Thanks for the content! I'm studying for Washington State.

@TheRealEstateClassroom 3 года назад

Hi Katya... thank you for leaving a comment I appreciate. It rarely happens but it's not impossible :o) Best of luck with your studies!

@user-z57h 4 месяца назад

I finally understand this😭 thank you

@nazli601 Год назад

thanks alot

@TheRealEstateClassroom Год назад

You're very welcome! Thank you for leaving a comment

@terrah4250 2 года назад

thank you

@TheRealEstateClassroom 2 года назад

You're welcome

@Imthenerdygamer 3 года назад

Nicely explained!

@TheRealEstateClassroom 3 года назад

Thank you!

@diannacotwright4892 Год назад

Great video!

@TheRealEstateClassroom Год назад

Thanks!

@sandragomez190 3 года назад

When the property reverts to the remainderman, and the remainderman dies. What happens to the property?

@TheRealEstateClassroom 3 года назад

The property will fall under the remainderman's estate...

@lidorfarkash6407 3 года назад

Wow thank you so much. Not sure if i am missing something, but what happens, if in your scenario, “you” die before Mom, Sally, or Tom? Does the titles go to Mom? THANK YOU! Ca here.

@misterbunny3 2 года назад

Hello Paul. Thank You for making these amazing very helpful videos. I'm learning so much from these videos. One question: say tom dies while mom is alive. Who is the now remainderman? And do Tom's heirs become the remainderman after tom takes over life estate? And can sally heirs also have any interest? Thanks a lot!

@bindralimbu3224 3 года назад

Very clear explanation 😊

@TheRealEstateClassroom 3 года назад

Thank you!

@mohammadrezafasahat3698 2 года назад

It is a great Video, please advise me if you have all chapter's lesson available, what is the best way to listen to?

@TheRealEstateClassroom 2 года назад

There is a playlist called "Principles & Practices" which is in chronological order. Here is a link... ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-KmXiEgZf5AA.html

@mondavou9408 Год назад

What happens with lawsuits or IRS liens? Is the remainderman responsible if the life estate owner is sued? What about vise versa?

@venkatasureshpedireddi2935 3 года назад

Thanks for your nice and easy way of explaining things, but I have a question. If I own the property and still there is a mortgage lien on that proprty, can I do transfer to my MOM as life estate, if so who has to pay the mortage?

@TheRealEstateClassroom 3 года назад

Technically, you could transfer title (life estate) to Mom using a deed. HOWEVER, the mortgage would still be a lien in priority. If the lender finds out about the transfer, the will most likely invoke the Due On Sale Clause and start the foreclosure process.

@wendycagle3202 3 года назад

I am studying for my exam and this is probably a silly question, but from this video, if Mom sells to Sally and mom dies and the property goes to the Remainderman, Tom was there ever money exchanged? Does Sally actually buy the property for money? If it goes back to the Remainderman, does he buy it from Sally and did Sally have to spend money or was it given from mom?

@Stephydark90 Год назад

I have 2 questions that 1. what is the difference between estate in reversion and reversionary interest? I looked up online that most was saying estate in reversion is property revert back to the owner and the reversionary interest belongs to the remainderman, is that correct? and 2. when the remainderman receives the property after the life tenant passes away, does the remainderman receive the property as life estate or fee simple?

@harrynut3044 Год назад

Great question.

@TheRealEstateClassroom Год назад

1st question... estate in reversion and reversionary interest mean the same thing.... 2nd question, the remainderman will receive the property in fee simple UNLESS the grantor has set it up otherwise.

@alricmason4173 3 года назад

Hey Paul Thanks for these. Working hard here to get to my mid term portion of the class at Randall. I don’t think this is a test type concern questions, just a gee wiz one. Can you start a life estate on property that has a lien/mortgage on it already ( I’m assuming yes). If then the originator of the life estate defaults then mom can either help to keep it or she is SOL?

@TheRealEstateClassroom 3 года назад

Yes you can. You can transfer title (life estate) but it will still be encumbered by a mortgage. If the borrower stops making payments the bank will foreclose and mom is SOL....

@ajaymehta5309 3 года назад

If parents with two children want to give the property two their two sons using a life estate deed while living in the house until both parents are dead, is it better to give it to the two sons as tenants in common 50/50. And then follow up by transferring it to the two sons as joint tenants so that the property stays in the family as long as possible.

@MO-xm1kj 3 года назад

If you or Tom get the house as a remainderman does the property revert back to a fee simple absolute?

@TheRealEstateClassroom 3 года назад

In real life the answer is yes... assuming there was any other deed restrictions. But for the purposes of the real estate exam.... yes, the remainderman would receive fee simple title...

@Hyerin77 3 года назад

So when mom dies, and the remainderman is Tom, Sally is SOL, what is SOL? and does Sally have to vacate the home?

@TheRealEstateClassroom 3 года назад

Hi Rose, thank you for leaving a comment. Yes, Sally would be required to vacate and "SOL" is an acronym for "Shit Out of Luck" 😉

@sandragomez190 3 года назад

@@TheRealEstateClassroom Would Sally get her money back?

@monicagears44 3 года назад

Why would sally buy the property at all if it was to go back to Tom when mm dies?

@TheRealEstateClassroom 3 года назад

In reality, Sally wouldn't. But she could if she wanted... This is one of those concepts that is hypothectical scenerio vs. reality. Bottom line... you have to know it for your real estate exam :o)

@jparekh18 3 года назад

LoL That is what I am thinking, Crazy stuff!! Hows these kind of things even legally allowed in real estate over here!

@FirstNameLastName-lx1qz 3 года назад

Does the tenant need to get permission from remainderman to sell the property, also, does the remainderman get percentage of the money from the sale?

@TheRealEstateClassroom 3 года назад

No, no permission is required and no the remainderman receives none of the proceeds

@venturagear 3 года назад

2. What is the original grantors incentive to do a Life Estate? Please provide another scenario.

@TheRealEstateClassroom 3 года назад

That's a great question... typically it family orientated. For example, I had a scenerio in my real estate business where husband owned a condo on the beach and wanted it to go to his son once he died. However, he had a live-in girl friend for many years. He gave her a life estate allowing her to remain in the condo for the rest of her life. Once she passed away the title conveyed to his son. Thank you for the question!

@venturagear 3 года назад

1. What happens if the remainderman dies first?

@TheRealEstateClassroom 3 года назад

If the remainderman dies first and the grantor didn't stipulate who the property goes to should the remainderman pass then it goes to the estate of the remainderman. Thank you for the question!

@dannygeed8350 4 года назад

Can you get title insurance on a life estate?

@TheRealEstateClassroom 4 года назад

Sure can. Obviously the title binder will have some exclusions.

@jennifermolina5884 3 года назад

when mom passes away the property gets reverse so how does Sally benefit from buying the property? asking for a friend..

@TheRealEstateClassroom 3 года назад

Great question.... and there is two part answer. lol There is reality then there is what you need to know for the real estate licensing exam. In reality, I can't think of a situation where this would happen. But, the exam may want you to know this 😀😉 Thank you for taking the time to ask a question!

@hariombajpai308 4 года назад

I have a situation, X& Y got a piece of land as joint owners having equal share under a will. the will further provided that Z is entitled to receive 10% income from that land for rest of his life. Now X&Y sold the land to W. Whether Z is still entitled to receive 10% income from W?

@TheRealEstateClassroom 4 года назад

Well, there are a lot of moving parts to this scenerio and its all in the details of how it was set up. But, simply based on what you've described, yes, Z would still be entitled to his or her 10% even under new ownership.

@serrossssorres1461 3 года назад

Thats exactly what I did,transfer the title to mom but with me as the remainderman,now we both want to sell it,any advice?Are there any problems with that?that we need to look or watchout for? Just so you know if and when we sell it, more lilely we are going to finance it to the buyer. My only conern is how to to go about paying tax on that.

@TheRealEstateClassroom 3 года назад

Thank you leaving a question.... My first advice is to speak with a CPA regarding any tax consequences. Selling shouldnt be an issue if you and mom are willing to sign a deed transferring your interest to a new owner.

@debsakatos6797 3 года назад

We owned our home. My lawyer did a Life Estate on the home having my 2 sons names on the deed so it would pass to them when we died. That was 7 years ago. Now I want to sell the house and move into a smaller place. How do we do that?

@TheRealEstateClassroom 3 года назад

Well, a lot depends on your specific state law. But, your sons would need to deed the property back to you. You should have the lawyer draft the deeds so they are in proper format and have him or her record the deeds once your sons sign them...

@nuranichol9188 3 года назад

Hello. Is it considered a life estate if mom is getting older and she knows she will pass away at some point and she signs the deed over to her youngest daughter?

@TheRealEstateClassroom 3 года назад

It really depends on how mom passed title to your sister. It may have been a life estate; however, probably not. I see this happen all the time where a parent will deed their home over to a child. There are benefits and pitfalls to this depending on how mom's estate is set up, assets in her estate and whether or not she may be needing medicaid in the near future, etc. But the fact is... if mom signed a deed giving the house to your younger sister.... your younger sister now owns it

@AndreaTorres-xe5ov Год назад

Is there a way to revoke a life estate if the sign was falsified?

@TheRealEstateClassroom Год назад

If the deed transferring title as a life estate didn't have all the essential elements then title didn't pass in the first place

@jasonray2827 Год назад

Can Sally sell the property?

@karenferreira466 3 года назад

I saw a similar question but it asked what happens if the remainderman defaults….

@TheRealEstateClassroom 2 года назад

If there's a mortgage against the property, it will be forclosed on :o)

@Inuit68 2 года назад

I understand the legal flow of ownership. I don't understand the advantages to anyone. Why would mom want to have a defeasable estate rather than an absolute?

@TheRandytops 3 года назад

What happens when the remainderman dies. Does ownership then go to intestate?

@TheRealEstateClassroom 3 года назад

If the remainderman dies prior to the life tenant passing, when the life tenant dies the title goes to the remainderman's estate

@TheRandytops 3 года назад

@@TheRealEstateClassroom thank you!

@Bri-nm2re 3 года назад

So basically the person that has reversionary interest will always be the remainderman?

@TheRealEstateClassroom 3 года назад

Yep... The Remainderman has the reversionary interest :o)

@anaikafrazil7462 2 года назад

I understand the concepts but I am really struggling With the who would die first and who would get the reversion or remainderman estate😩😩

@TheRealEstateClassroom 2 года назад

It doesn't really matter who dies first. Because... even if the remainderman dies first, the revisionary interest would go to his estate

@ruthskerrett-santana643 3 года назад

This video was so helpful. Thank You

@karlygashbaten7346 2 года назад

To avoid any scammers, if Sally can sell a property to a 3rd party and this 3rd party would not be able to know that there is a Remainderman? If Sally has a title document that specifies her limited rights?

@TheRealEstateClassroom 2 года назад

Remember, there is what you need to know on paper to pass the exam... then there is the practicle side of things in reality. For example, a life tenant could technically sell the property to someone who obtained a mortgage. However, in the real world good luck finding a bank that would actually loan the money :o)

@godsragdoll6402 2 года назад

I and a close friend took a loan out to get a government assistant house. We both signed a trust and He made me life estate to the property. I have been in the house for 4 years. Sadly to say he passed away a month ago. His parents, siblings, are deceased and he has no children. He does however has two nephews.so they will be added as remaindermen? But Can I still stay there rent free? It’s a guy that’s says he is my friends God brother he’s trying to make me give him rent. My understanding is Life estate do not have to pay rent..

@louismendoza1484 2 года назад

can owners of a business can get ownership as joint tenancy ?

@TheRealEstateClassroom 2 года назад

In most states, yes.

@louismendoza1484 2 года назад

Thanks

@TheRealEstateClassroom 2 года назад

@@louismendoza1484 You're welcome :o)

@ajaymehta5309 3 года назад

Example -The parents bought the property for $100K. They create a Life Estate with the two of them as the life tenant and the son as the remainderman when the market value is $1M. When dad passes away the market value is $1.5M, and late when the mom passes away the market value is $2M. So when the son gets the $2M property as a remainderman, what will be his capital gain if he sells it later at $2.5M?

@TonyBfixin 3 месяца назад

So what happeneds if the owner (who gave mom the house) dies and he was the remainderman? Assuming both parties are deceased

@andrewaldaco6243 2 года назад

So if I wanted to buy the house I wouldn’t go to the life tenants but directly to the original owners to get full ownership ???

@TheRealEstateClassroom 2 года назад

Yes, if they were the remainderman. Ultimately you would need to find out who the reminderman is because they will ultimately end up with fee simple title

@andrewaldaco6243 2 года назад

@@TheRealEstateClassroom awesome thanks so much! I was driving for dollars and two houses that I was very interested in looked to have these sort of titles when I did my research! This helped a lot!

@TheRealEstateClassroom 2 года назад

@@andrewaldaco6243 Right on! :o)

@jonnakaericher4099 2 года назад

How about a life tenant with provisions violated her conditions, demolished a building, not paying taxes and has no insurance on the property. She was granted life estate through a trust instrument the no longer exists.

@sanumkhan5219 2 года назад

loan to value explain

@TheRealEstateClassroom 2 года назад

Here is a video on the subject :o) ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-HmCs1OW9hSg.html

@sprestyly 6 месяцев назад

When the life tenant dies do the remainder man gets a step up in basis

@LowLuxx 6 месяцев назад

Don’t quote me but I believe if the life tenant dies its up to whoever he wills the house too which would revert it back to a fee simple absolute unless the heir makes it a life estate again.

@poppyhampson7878 3 года назад

A life estate cannot sell if there are remainderman!

@TheRealEstateClassroom 3 года назад

Sure it can... HOWEVER, when the life tenant dies title will still pass to the remainderman... :o)

@marqb936 3 года назад

I shouldn’t have laughed at Bequeath if I’m really trying to understand this

@TheRealEstateClassroom 3 года назад

LOL well I am ok with it... Many of these terms are rarely used in the real real estate world. Just know what they are for the exam then you can forget lol Best of luck with your studies!

@marqb936 3 года назад

@@TheRealEstateClassroom lol I was in deep concentration, and actually frustrated I rarely misunderstand things... but that made me laugh... and seem immature, then suddenly I got it! It really helped!

@meganl5613 2 года назад

can the remainder man make someone else remainder man? can the life tenant change their minds on remainder mans?

@TheRealEstateClassroom 2 года назад

First, the life tenant has no say in who the remainderman is... that is established by the property owner at the time the life estate is given to the life tenant... the remainderman could convey their interest to another

@redsolocup2994 Год назад

So what if my mom deeded her house and land to my sibling's and I.4 ways but I have a residence on land and have lived on land 35 yrs. they all want to sell I don't ,I live there, so does that make it a life estate and they can't do anything without me signing it.

@bleuShoErn 2 года назад

I don’t see any info or any questions regarding Tom with a mortgage on it leaving it to Mom as a life tenant with Toms son being the remainder man and Mom not paying the mortgage. Secondly, in two years can’t take care of it and goes to a nursing home. Then what? This is real life stuff that actually happens, not hypothetical to ace an exam.