One reader wrote:
My great grandfather left a will stating that his properties should go to his wife, and after she dies they should go to his daughter and granddaughter. After my great-grandfather died, my great-grandmother made a will leaving all her belongings to her grandson. What is the effect of the two wills?
The great-grandfather's will did not make an outright gift of the property to the great-grandmother. Instead, it gave her a life interest, and she is usually referred to as a life tenant. The simple explanation is that the great-grandmother could not dispose of the property under her will, because, after her death, the property would then go to the daughter and granddaughter (called the remaindermen) in keeping with the provisions of the great-grandfather's will. The grandson would only inherit belongings that the great-grandmother did not receive from the great-grandfather.
During her lifetime, she would have the right to use the property in much the same way the owner of the property would. She could rent and profit from it, as long as she did no damage to it. Interestingly, she could also transfer a portion of her life interest; but that interest would also come to an end upon her death.
The main obligation of the life tenant is to preserve the value of the property by not permitting 'waste'. Waste could fall into several categories, one of which is permissive waste.
An example of this occurred in a case where the life tenant failed to make repairs to a water pump, which resulted in dead trees and shrubs. This resulted in the life tenant having to pay damages to the remainderman. Other examples of permissive waste include the failure to pay insurance or property taxes.
The life tenant may even sell the property, but this would require the agreement of all the remaindermen, because in a true sense, they are all co-owners of the property. The only difference is that the remaindermen have no right to exercise any acts of ownership until the life tenant dies.
Without the guidance of an attorney-at-law in the preparation of a will, it is possible for a life interest to be (accidentally) created. For example, many persons believe that they can give a gift of property to A, while directing that B is to occupy a room at the back of the house. Perhaps without intending to do so, the testator would have given a life interest to B, who would then have the right to occupy and use the property for his lifetime. A will only get the gift absolutely after B dies.
The subject of life interests appears to be a simple issue on the surface, but it could easily become a legal nightmare without proper guidance.
Sherry Ann McGregor is a partner and mediator in the firm of Nunes, Scholefield, DeLeon & Co. Please send your comments and questions to email@example.com or firstname.lastname@example.org