Can Part Owner of Real Estate Create a Life Estate?
Question:
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. We live in Texas.
Photo by MJ Tangonan on Unsplash
Response:
Without seeing the deeds or your father’s will, I can’t respond for certain, but if you and your sister each own a quarter of the house and your stepmother owns the other half, she can create a life estate with respect to her half. That means that she will continue to have the right to live in the house during her life and to receive half of any rental income. Then at her death, her half will pass to whoever she named on the new deed.
The life estate deed does not affect your interest or your sister’s interest in the property. You and your sister also have the right to live there or to collect your share of any rental income. You can also convey your interest to someone else, just as your stepmother appears to have done. If one of the three of you wants to live in the house, she should work it out with the other two, perhaps agreeing to pay all of the expenses of maintaining the property in exchange for living there without the other two. Finally, any of you can force the sale of the house, though if there’s no agreement about this, it could take a court action that could be somewhat expensive.
Related Articles:
Is a Life Estate a Good Way to Avoid Probate?
Tax Implications for Growth of Life Interest in Real Estate in Trust
Solution for Siblings Who Co-Own Real Estate Where One Wants to Live
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