A life estate is a limited form of property ownership in which the interest in a property is split. A person who has a life estate is entitled to enjoy full use of the property during his lifetime, but does not have the right to confer the property upon his death.
The simplest form of property ownership is a fee simple absolute. A fee simple absolute means that the owner has a 100 percent undivided interest in the property. He can use it, sell or convey it, and leave it to someone else in his will.
With a life estate, however, the person holding the life estate has only a partial interest in a property. That interest allows him to use the property in any way he sees fit, for the duration of his life. The owner of a life estate is also called a life tenant and he has full ownership benefits for as long as he is alive.
As a full owner, the life tenant can rent the property in order to enjoy income from it. He can live on the property, or build and improve upon it. He can also sell the property if he so desires, to anyone whom he chooses.
The term of the life estate, however, is measured by the life of the person who was granted the original interest. In other words, only the life tenant's life is used to measure the term. This is true even if he rents the property to another person or conveys his interest in the property to someone else.
The fact that the life tenant's interest ends upon his death means that if he sells the property to someone else, their interest ends immediately upon the life tenant's death. When a life estate is created, the documents thus must stipulate who the property will go to upon the life tenant's death. This person, who is vested with an interest in the property immediately after the life tenant dies, is called the remainderman.
When a life tenant dies, the remainderman's interest in the property immediately becomes active. This is true even if the life tenant attempted to will the property to someone else, or has sold the property. A life tenant is unable to grant a greater interest than he himself has in the property, so any attempt on the part of a life tenant to will the property to an heir is invalid.