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What Is a Life Beneficiary?

A life beneficiary loses their ownership of an estate upon death.
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  • Written By: Alexis W.
  • Edited By: Heather Bailey
  • Last Modified Date: 30 November 2014
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A life beneficiary is a person vested with a specific type of property right, called a life estate. This form of owning property exists in all common law countries, including the United States and the United Kingdom. It is a form of property ownership derived from English common law.

There are many different ways to own property. The simplest way of owning a piece of land is in fee simple absolute. A person who owns property in fee simple absolute is entitled to do anything he wants with the property. He can enjoy it for his life, he can sell it, and he can will it to heirs and pass it on.

There are also some more limited or restricted types of property ownership. A life estate is one type of restricted property ownership. When a person grants a life estate to a life beneficiary, the life beneficiary is permitted 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 a life beneficiary cannot will his property to anyone else. The life estate is good only for the life of the named beneficiary. If he tries to will it to someone else or leave it to heirs, the court will not recognize these attempts, because the life beneficiary cannot create a greater interest than the one he has.

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A life beneficiary can sell a property. If he does, however, he still cannot sell a greater interest than he has. Since the estate expires on the death of the named beneficiary, the person who buys the property will only have control of it until the life beneficiary dies, at which point the buyer will immediately loose the right to the property.

When property is owned as a life estate, the document that created the interest usually must specify what happens when the beneficiary of the life estate dies. Normally, the deed will name a person who gets the property upon the death of the life beneficiary. This person is referred to as the remainderman.

Creating a life estate can be a useful planning tool. For example, someone may wish to leave a property to his heirs, but may want to allow a friend to continue to enjoy the use of the property. By creating a life estate, the friend can enjoy the use of the property until he dies, but the owner can still leave the land to his children in the end.

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