Florida Real Estate Sales Associate Examination Content OutlineReal Estate Property and OwnershipMedium
A property owner wants to transfer their property to their daughter, but they want to retain the right to live on the property for the remainder of their life. Which type of estate should the owner create to achieve this goal?
- AReversionary Interest.
- BFee Simple Absolute.
- CEstate for Years.
- DLife Estate.
Show answer & explanationAnswer & explanation
Correct answer: D. Life Estate.
A life estate grants an individual the right to possess and use a property for the duration of their life, or the life of another designated person. Upon the death of the 'life tenant,' the property typically passes to a remainderman (in this case, the daughter).
Why the other options are wrong
- A. A reversionary interest is what the original grantor retains if no remainderman is named, not the estate the owner creates.
- B. Fee Simple Absolute is outright ownership with no life limitation.
- C. An estate for years is a leasehold estate for a fixed period, not a lifetime ownership interest.
Life Estate
An interest in real property that is held for the duration of the life of a designated person (the life tenant). Upon the death of the life tenant, the property reverts to the original grantor or passes to a designated third party (remainderman).
- Limited by a person's life.
- Life tenant has possession and use.
- Future interest held by grantor (reversion) or third party (remainder).
Memory trick: Life Estates are like 'Living' on borrowed time, then it's gone.