Life estate
A life estate divides ownership across time. One person — the life tenant — has the right to use and occupy the property for their lifetime. When they die it passes automatically to the remainderman.
What each party holds#
The life tenant has possession and use. They can live there, rent it out, and take the income. They cannot leave it by will, because their interest ends at death.
The remainderman holds a present, vested interest that becomes possessory later. They have no right to occupy now, and they do have a real interest in the property being preserved.
Why people create them#
Traditionally, to pass a house to children while a parent continues living there — avoiding probate, with the transfer happening automatically on death.
It works. It is also, in Minnesota, usually the wrong tool for that purpose.
The problem with it#
Loss of control. Once created, the life tenant cannot sell the property, or mortgage it, or change their mind, without the remainderman joining.
A parent who creates a life estate for their children and later needs to sell the house to fund care must persuade every remainderman to sign. If one refuses, or has died, or has divorced, or is bankrupt, the sale does not happen.
The remainderman's problems become the property's problems. Their creditors, their divorce, their bankruptcy can all reach an interest they hold now.
Irrevocable. Unlike a will, it cannot be undone unilaterally.
The better instrument in Minnesota#
A transfer on death deed under Minn. Stat. 507.071.
It achieves the same outcome on death — the property passes automatically to the named beneficiary, outside probate. And during life it achieves something a life estate cannot: the owner keeps complete control.
They can sell. They can mortgage. They can revoke the deed and name someone else. The beneficiary has no present interest, so their creditors cannot reach it and their divorce does not touch it.
The trade-offs that made life estates common are largely solved by an instrument Minnesota has had since 2008.
Where life estates still appear#
Existing arrangements created before transfer on death deeds were available, which are numerous.
Deliberate arrangements where the remainderman's fixed interest is the point — a second marriage where a spouse should occupy the home for life and children from a first marriage should receive it afterwards.
Occasionally in planning for reasons specific to the family's circumstances.
If you have one#
Understand who has to sign for any transaction, and confirm those people are findable and cooperative before you need them.
The most common failure is a life tenant discovering, at the point of needing to sell, that a remainderman cannot be located — which turns a house into a quiet title action.