Navigating the sale of property with a life estate can be frustrating. Many owners discover too late that they don’t have full control over their land, and uncooperative remaindermen or legal restrictions can stall or block a sale entirely. Whether you inherited a property with a life estate, created one for estate planning, or are simply trying to sell a piece of land, understanding your legal options is critical.
This guide breaks down, in plain language, how life estates work, why they complicate property sales, and the practical solutions available to move forward.
Quick Solutions Overview
If you’re dealing with a property encumbered by a life estate, you generally have four paths forward:
- Sell the property jointly — with both the life tenant and remainderman agreeing to the sale.
- Negotiate a buyout or use a partition action — when one party won’t cooperate.
- Sell only your interest — either the life interest or remainder interest.
- Sell the property as-is — to a buyer or company that can resolve the title issues for you.
The right option depends on your situation, your relationship with other parties, your timeline, and the property’s value.
Understanding Life Estates
What Is a Life Estate?
A life estate is a legal arrangement where property ownership is divided between two parties:
- The life tenant, who has the right to occupy or use the property during their lifetime.
- The remainderman, who holds a future ownership interest that becomes full ownership when the life tenant dies.
This division is established through a life estate deed, a document recorded in the property’s chain of title.
Why This Matters for Selling
Because ownership is split, neither the life tenant nor the remainderman can sell the property alone. A sale typically requires the consent of both, plus proper documentation to convey clear title to a buyer.
Have a different type of title problem? Check out our complete guide to selling land with title issues.
Selling Property Encumbered by a Life Estate
1. Joint Sale with Consent
The simplest approach is for the life tenant and all remaindermen to agree to sell the property together. A buyer receives full title, and the sale proceeds are divided between the parties based on the value of their respective interests.
Valuation is typically determined using actuarial tables (often IRS tables) that factor in the life tenant’s age and life expectancy. For example, an older life tenant usually receives a smaller share of the sale proceeds, reflecting their shorter expected lifetime interest.
2. When Consent Isn’t Voluntary: Legal Remedies
If the remaindermen refuse to sell, the life tenant may have legal options. A partition action is a common legal remedy, allowing a court to either physically divide the property or order a sale and distribute the proceeds. This is a more time-consuming and costly route, but it can resolve deadlocks.
3. Selling Only a Life or Remainder Interest
Either party can sell their own interest separately. A life tenant can sell their life interest, granting a buyer the right to use the property until the original life tenant passes away. A remainderman can sell their future interest, giving a buyer ownership after the life tenant’s death.
However, the market for partial interests is small, and valuation is complex, so this path usually appeals to specialized investors rather than traditional buyers.
4. Selling As-Is to a Problem-Solving Buyer
Some real estate investment companies specialize in buying properties with legal complications, including life estates. They handle title clearing, negotiations with remaindermen, or legal actions. This can be a fast, low-effort way to sell if you don’t want to navigate the legal process yourself.
Legal and Financial Complexities to Consider
Capital Gains Tax
Selling property can trigger capital gains tax. Your tax basis depends on how the property was acquired:
- Inherited property usually receives a step-up in basis to the fair market value at the time of the prior owner’s death.
- Purchased property uses the original purchase price plus improvements.
The capital gain is then allocated between the life tenant and remainderman according to their respective interests.
Liens, Mortgages, and Title Issues
If there are liens, judgments, or mortgages, these must usually be cleared before a buyer can receive clean title. Sale proceeds are typically used to pay these off first, which affects the net payout.
Mortgaging Property with a Life Estate
Obtaining a mortgage on property subject to a life estate is difficult because lenders prefer unified ownership. All parties must agree and sign, and any disagreement usually halts the process.
Medicaid Planning
Life estates are sometimes used in Medicaid planning, but selling the property can affect eligibility, especially within Medicaid’s five-year look-back period. Professional guidance is critical in these cases.
State Law Differences
Life estate laws vary by state. Some states may have unique rules about required consents, the partition process, or valuation methods. Always check your state’s specific laws or consult a local attorney.
DIY vs. Sell As-Is: Choosing the Right Path
When facing a property sale complicated by a life estate, you have two broad strategies:
Option 1: Resolve the Issues Yourself with Professional Help
This path makes sense if:
- The property value is high enough to justify legal and professional costs.
- All parties are cooperative, or at least open to negotiation.
- The legal issues are straightforward (e.g., simple consent documents, minor title corrections).
- You’re willing to work with attorneys, title companies, or tax professionals to properly handle the transaction.
Resolving the title yourself usually results in a higher sale price, since you’ll be marketing a clean, marketable property. But it can involve significant time, coordination, and possibly litigation if there’s conflict.
Option 2: Sell the Property As-Is to a Specialized Buyer
This approach is often better when:
- The legal situation is complicated or contentious (e.g., uncooperative remaindermen, multiple heirs).
- You need a fast sale and don’t want to manage legal processes.
- The property is lower in value, making professional fees harder to justify.
- You simply prefer to avoid the hassle and let someone else handle the resolution.
These buyers typically pay less than a fully marketed property’s retail value because they’re taking on the legal work and risk. But in exchange, you get a quicker, simpler closing with no need to fix issues yourself.
Need help with a life estate property sale? Get a cash offer from experienced buyers.
Conclusion: Choosing the Best Path Forward
Selling property encumbered by a life estate can feel overwhelming, but you have real options. Whether you work with professionals to resolve the legal complexities and secure a traditional sale, or decide to sell the property as-is to a specialized buyer, the key is understanding your rights, the roles of everyone involved, and the financial implications of each approach. With the right strategy—and, when needed, the right legal and financial support—you can move forward confidently and turn a complicated situation into a clear, actionable plan.
Frequently Asked Questions
How do you “get around” a life estate? You generally can’t bypass a life estate without the consent of all parties or legal action.
Can a will override a life estate? No. A properly recorded life estate deed typically controls over any conflicting will provisions.
How can I remove a life estate from a deed? This usually requires the consent of all parties. Sometimes a quitclaim deed or merger of interests can achieve this. Consult an attorney for the correct procedure in your state.
Does a life estate avoid probate? Yes. Upon the life tenant’s death, the property transfers automatically to the remaindermen without probate.
Please consult your financial advisor, accountant, real estate attorney, or tax specialist. This article is for informational purposes and is not tax or legal advice.
