Can Co-Owner of Real Estate Create a Life Estate?
If my sister and I inherited half of our dad’s house after he passed and then his wife went down to the courthouse and filed a life estate, is this legally binding? We had no knowledge of this and she is not our mother.
If your stepmother owns half the house, then she can create a life estate for her half, keeping for herself the right to live in the house for the rest of her life and then on her death, passing on her one-half interest to whoever she names on the deed. This does not affect your or your sister’s interest in the property. You each still own a quarter of the house and you also have the right to live there.
You, your sister, and your stepmother will have to work out together what this shared ownership means in terms of who actually does live in the property, who pays taxes, insurance, and maintenance costs. Typically since you all have equal rights both to live in the property and obligation to pay for its upkeep, the person actually living in the property covers these costs. If you were to rent out the property, you and your sister should each receive a quarter of the net rent after expenses. So you have an argument that your stepmother, if she’s living in the property, should pay you an equivalent amount.