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.
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.
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
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
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.
🗽🎶❤️ 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! 🗽🎶❤️
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.
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)
Hi Paul, is an 'ordinary life estate" the same as 'Life estate". Also, what is a 'legal Life estate". BTW, I love how thorough you are in your topics and the examples are simple and relatable.
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...
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.
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?
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.
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?
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.
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?
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....
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!
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?
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.
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?
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
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.
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.
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?
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.
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?
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...
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!
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!
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
@@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!
So when the property reverts to Tom (the remainder man) and the original owner passes, does Tom now have all rights to where he would be able to bequeath the property in his will upon his death?
Once the Life Tenant dies, then Tom (the remainderman) has fee simple title. This means he holds all the bundle of rights so he could will his interests to whomever he pleased
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?
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..
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?
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)
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?
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.
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.
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.
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!
@@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!
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
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.
More real estate exam prep materials at www.TheRealEstateClassroom.com
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.
Thank you, Gillian for your comment. That's why we have title searches and abstracts done 😁
Thank you for simplifying Freehold Estates which can be confusing. The visual demonstration and explanation made it easy to comprehend.
Hi Sophia... you're welcome! Glad we could be part of your study routine
I have read many different sources on this topic and have watched many videos. By far, you have explained this the BEST!
I appreciate your comment for sure! :o)
Paul you will get tired of me but you are amazing making sense of this new language I’m learning
Not at all... I love and appreciate the engagement
Thanks for the clarifications in a simple manner! My favorite part? "Sally is SOL."
You're welcome!
Agreed!
You are absolutely the best. God bless your knowledge. I appreciate your teaching from the bottom of my heart.
Wow, thank you... I appreciate you leaving such an awesome comment. Best of luck with your studies!!!
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.
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.
Thank you
This was a lot more helpful than what I was simply reading lol. Thanks!
Thank you!
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
Thank you!
Thank you for making sense of this. Your detailed explanation truly made this click for me.
Your welcome! :o)
thank you for clearing this up Paul, was having a tough time grasping the remainderman concept until this video.😁
You're welcome!
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
You're welcome... let us know how you do on the exam....
Best explanation I’ve heard by far! Thank you!
Thank you, Vivian!!! I appreciat you taken the time to drop me a comment on the channel. Best of luck!!!!
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.
Thank you, Paul very helpful
Thank you
Super helpful! Thank you so much!
You're welcome!
couldn't have explain it better thank you
Thank you, Sabit! I appreciate you leaving a comment😁
Love these vids! Gets right to the point
Thank you... I appreciate you taking the time to leave a comment! Best of luck!
Thank you, your videos helped me pass the exam
Thank you and congrulations on passing your exam! Best of luck!
Thank you for the detailed, super clear explanation 👍
Welcome!
Excellent explanation. Thank you!
Glad it was helpful! Keep on studying :o)
🗽🎶❤️ 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! 🗽🎶❤️
Hi Julia... that's really kind of you to say! I appreciate your comments. Keep studying... you got this!!!! 😁
@TheRealEstateClassroom 🗽🎶❤️ WOW!!! You responded so quickly! Thanks again, Paul! Which state do you teach in if it's not a secret?
@@juliar6874 I am in Omaha Nebraska
Very clear explanation 😊
Thank you!
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.
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!
So greatly explained! Thanks
Nicely explained!
Thank you!
Great video!
Thanks!
Why would sally buy the property at all if it was to go back to Tom when mm dies?
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)
LoL That is what I am thinking, Crazy stuff!! Hows these kind of things even legally allowed in real estate over here!
Hi Paul, is an 'ordinary life estate" the same as 'Life estate".
Also, what is a 'legal Life estate".
BTW, I love how thorough you are in your topics and the examples are simple and relatable.
Yes it is😁
I finally understand this😭 thank you
If you or Tom get the house as a remainderman does the property revert back to a fee simple absolute?
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...
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.
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?
Great question.
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.
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?
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.
When the property reverts to the remainderman, and the remainderman dies. What happens to the property?
The property will fall under the remainderman's estate...
It is a great Video, please advise me if you have all chapter's lesson available, what is the best way to listen to?
There is a playlist called "Principles & Practices" which is in chronological order. Here is a link... ua-cam.com/video/KmXiEgZf5AA/v-deo.html
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?
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....
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?
No, no permission is required and no the remainderman receives none of the proceeds
What happens when the remainderman dies. Does ownership then go to intestate?
If the remainderman dies prior to the life tenant passing, when the life tenant dies the title goes to the remainderman's estate
@@TheRealEstateClassroom thank you!
thanks alot
You're very welcome! Thank you for leaving a comment
Can you get title insurance on a life estate?
Sure can. Obviously the title binder will have some exclusions.
2. What is the original grantors incentive to do a Life Estate? Please provide another scenario.
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!
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?
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.
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?
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
What happens with lawsuits or IRS liens? Is the remainderman responsible if the life estate owner is sued? What about vise versa?
thank you
You're welcome
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.
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.
Is there a way to revoke a life estate if the sign was falsified?
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
So when mom dies, and the remainderman is Tom, Sally is SOL, what is SOL? and does Sally have to vacate the home?
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" 😉
@@TheRealEstateClassroom Would Sally get her money back?
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?
I saw a similar question but it asked what happens if the remainderman defaults….
If there's a mortgage against the property, it will be forclosed on :o)
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.
So basically the person that has reversionary interest will always be the remainderman?
Yep... The Remainderman has the reversionary interest :o)
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?
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...
I understand the concepts but I am really struggling With the who would die first and who would get the reversion or remainderman estate😩😩
It doesn't really matter who dies first. Because... even if the remainderman dies first, the revisionary interest would go to his estate
can owners of a business can get ownership as joint tenancy ?
In most states, yes.
Thanks
@@louismendoza1484 You're welcome :o)
Can Sally sell the property?
when mom passes away the property gets reverse so how does Sally benefit from buying the property? asking for a friend..
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!
1. What happens if the remainderman dies first?
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!
This video was so helpful. Thank You
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 ???
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
@@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!
@@andrewaldaco6243 Right on! :o)
So when the property reverts to Tom (the remainder man) and the original owner passes, does Tom now have all rights to where he would be able to bequeath the property in his will upon his death?
Once the Life Tenant dies, then Tom (the remainderman) has fee simple title. This means he holds all the bundle of rights so he could will his interests to whomever he pleased
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?
So what happeneds if the owner (who gave mom the house) dies and he was the remainderman? Assuming both parties are deceased
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..
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?
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)
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?
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.
When the life tenant dies do the remainder man gets a step up in basis
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.
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.
It actually appears on the test. They set an example and ask you to name the type of right the characters had
I shouldn’t have laughed at Bequeath if I’m really trying to understand this
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!
@@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!
A life estate cannot sell if there are remainderman!
Sure it can... HOWEVER, when the life tenant dies title will still pass to the remainderman... :o)
loan to value explain
Here is a video on the subject :o) ua-cam.com/video/HmCs1OW9hSg/v-deo.html
can the remainder man make someone else remainder man? can the life tenant change their minds on remainder mans?
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
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.
This helped me understand life estates immensely! Thank you!
You're welcome