Life Estate Versus Lease
REM #A761
By Ilyce R. Glink
Summary: A ThinkGlink reader is thinking about purchasing his neighbor's home and giving him a life estate. Ilyce suggests looking into a long term lease.
Q: My elderly neighbor is thinking about selling his house and moving to a
smaller space. He doesn’t really want to leave the house. I’d like
to buy his house, so that I have control over the land.
Someone suggested that I buy the house from him at a reduced rate and create a life estate so that he can stay in the house and not have to worry about the upkeep or maintenance. I think this might work well for both of us, but I don't know how to go about it.
A: A life estate sounds like a great idea, as long as you have enough cash
to pay the maintenance, upkeep and cash to the seller.
A real estate attorney can draft up the paperwork. But before you start talking
about a life estate, you might want to consider other options. What about a
lease? He could lease the property from you for as long as you two agree.
A life estate may create issues that you might not want to deal with. He could have the life estate and not live at the property and you would have to wait for him to die before being able to do anything with the property.
The lease could be drafted that he would be the person allowed to live at the property and if the home ceases being his primary residence, the lease would terminate.
I'd sit down with your neighbor and see if he has any interest in selling his home to you and if he does what he would like to do. You first need to find out if he even wants to remain on the property if he sells it.
You will also need to talk to a real estate attorney to go over the various
issues and draft documents to help you through the purchase of the property
along with any other issues that need to be finished to allow the seller to
remain on the property.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Revocable Living Trust And A Life Estate Deed
100 Percent Investment Property Loans
Creditors "Charged Off" Credit Account
Why A Living Trust Is Worth The Cost
Understanding Construction-To-Permanent Loans
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
