A life estate is a concept used in common law and statutory law to designate the ownership of land for the duration of a person's life. In legal terms it is an estate in real property that ends at death when there is a "reversion" to the original owner. The owner of a life estate is called a "life tenant".
Although the ownership of a life estate is of limited duration because it ends at the death of the person who is the "measuring life," the owner has the right to enjoy the benefits of ownership of the property, including income derived from rent or other uses of the property, during his or her possession. Because a life estate ceases to exist at the death of the measuring person's life, this temporary ownership agreement cannot be left to heirs (intestate) or devisees (testate), and the life estate cannot normally be inherited (but see Life Estate Pur Autre Vie, and Estate for Term of years). At death, the property involved in a life estate typically falls into the ownership of the remainderman named in the life estate agreement.
A land owner of an estate cannot give a "greater interest" in the estate than he or she owns. That is, a life estate owner cannot give complete and indefinite ownership (fee simple) to another person because the life tenant's ownership in the property ends when the person who is the measuring life dies. For instance, if Bob conveyed to Ashley for the life of Ashley, and Ashley conveys a life estate to another person, Brenda, for Brenda's life [an embedded life estate], then Brenda's life estate interest would last only until whoever dies first, Brenda or Ashley. Then Brenda's interest conveys to the remainder interest or reverts to the original grantee. Once Ashley dies, however, whoever possesses the land loses it (with the land likely reverting to its original grantor). This is a life estate "pur autre vie", or the life of another. Such a life estate can also be conveyed originally, such as "to A until B dies."
Another limitation on a life estate is the legal doctrine of waste, which prohibits life tenants from damaging or devaluing the land, as their ownership is technically only temporary.
In the United States, a life estate is typically used as a tool of an estate planning. A life estate can avoid probate and ensure that an intended heir will receive title to real property. For example, Al owns a home and desires that Bill inherit it after Al's death. Al can effectuate that desire by transferring title to the home to Bill and retaining a life estate in the home. Al keeps a life estate and Bill receives a vested fee simple remainder. As soon as Al dies, the life estate interest merges with Bill's remainder, and Bill has a fee simple title. Such transfer of interests make unnecessary the use of a will and eliminates the need to probate the asset. The disadvantage to the grantor, however, is that the grant to the remainderman is irrevocable. "Beneficiary deeds" have been statutorily created in some states to address this issue.
It is less well known that the intestacy laws of certain American states, such as Arkansas, Delaware, and Rhode Island, still limit the surviving spouse's rights to the deceased spouse's real estate to a life estate (as shown by the programs linked to the state names). Louisiana employs a similar mechanism in successions called usufruct.
Life estates are measured either by the life of the property recipient, or by the life of some other person; these latter are called life estates pur autre vie (Law French, "for the life of another"). A life estate pur autre vie is most commonly created in one of two circumstances.
The early common law did not recognize a life estate in personal property, but such interests were cognizable in equity. Thus, although life estates in real estate are still created today, the life estate is more commonly used in trust instruments, typically in an attempt to minimize the effect of the inheritance tax or other taxes on transfers of wealth.
The law of England and Wales no longer recognises the life estate at law in relation to land; instead the holder of legal title to the land (whether the freehold fee simple or a lease) will hold that land on trust first for the life tenant and then for the remainderman.