Life Estates

There are a lot of nuances that are tested about life estates. But first, it's important to understand what a life estate is. 

A life estate is an estate measured by the life or lives of one or more people. The estate terminates upon the death of the holder(s) of the life estate. Often, a life estate is measured by the life of the grantee, but not always. A life estate may also be measured by a life other than the grantee's life. For example, a grantor can grant a life estate to x for the life of y. 

Nobody lives forever, at least not yet. For that reason, whenever a life estate is granted, a future interest is included with that life estate. For example, "to x for y and then to z" will grant to x a life estate, and to z a remainder. "From x to y for life" does not include a remainder, so that grant includes a reversion back to the grantor once y dies. 

Often tested in the context of life estates are the obligations that a life tenant has to those who will later receive the property (the future interest holders). In general, the life tenant is entitled to all ordinary uses and profits from the land held during the life tenant's life. But the life tenant must not commit waste. There are three types of waste. 

Voluntary waste occurs when the life tenant's actual, overt conduct causes the property value to drop. For example, if a life tenant depletes a property's natural resources, that might be deemed voluntary waste. Exploitation of natural resources is generally limited to situations in which such exploitation is necessary for repair or maintenance of the land, or when the land is suitable only to such use. It might also be proper if the grantor (who granted the life estate) expressly or impliedly permitted such use. If mining was done on the land prior to the life estate, the life tenant can continue to mine any mines that are already open. This is called the Open Mines Doctrine (not a lot of creativity in coming up with that name!) 

Permissive waste occurs when a life tenant fails to comply with their obligations to keep the land from falling into disrepair. The life tenant must preserve the land and keep all structures on the land in a reasonable state of repair. The life tenant also must pay ordinary taxes on the land, though this is limited to the extent of the total income/ profits generated from the land or the reasonable rental value of the property. 

The life tenant also must pay interest on mortgages burdening the land (distinguish this from the principal which is generally paid by the future interest holder), and pay special assessments for public improvements of short duration. Improvements of longer duration are generally apportioned among the life tenant and the future interest holder. A life tenant is not responsible for insuring the property for the benefit of the future interest holder, nor is a life tenant responsible for damages caused by third party tortfeasors. 

Ameliorative waste might be the most counterintuitive of them all. Ameliorative waste is a change to the property made by the life tenant that benefits the property economically. The life tenant cannot enhance the property's value in this way unless consent is given by future interest holders. The idea here is that there may be sentimental value lost even if property value increases. A change will not be deemed ameliorative waste, however, if the market value of the future interest is not diminished and either the future interest holders do not object or a substantial and permanent change in the neighborhood conditions deprives the property in its current form of reasonable productivity or usefulness. 

A final point is that a life tenant can renounce his/her interest in the life estate after receiving the interest by will or inheritance. If a life tenant renounces, the future interest following the life estate is generally accelerated so that the future interest becomes a present possessory estate.