Underwriting Manual: TX


Life Estates

State Supplements

View state supplements to the national underwriting manual.

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Underwriting Manual Subtopic

In General

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 A life estate is an estate in real property which is limited in duration to the life of its owner or to the life of some other designated person.

A life tenant is the person holding an estate in real property for the term of the life tenant's life or someone else's life.

A reversion is that portion of a whole estate continuing in the owner-grantor after the owner-grantor has conveyed a life estate. For example, when A conveys a life estate to B, the residue of the fee estate left in A is called reversion. When B's life estate ends, the right to possession will revert to A. A is both grantor and reversioner.

A remainder is a fee estate created in some person other than the grantor and limited to take effect in possession after the expiration of the life estate. For example, if A conveys a life estate to B and the remainder to C, C's fee estate would be a remainder. C is called the remainderman. Upon termination of B's life estate, the right to possession is vested in C.

A life estate pur autre vie (for another's life) is a life estate whose duration is measured by the lifetime of a person or persons other than the holder of the estate. For example, A conveys a life estate to B for so long as C shall live and at C's death to (1) revert to A or (2) to D.

A life estate is a freehold interest in land, but it is not an estate of inheritance. It does not survive the death of the person whose life span measures it. Upon termination of the life estate, the holder of the future interest, whether remainder or reversion, will be the owner of a fee simple estate.

Estates for life are either conventional or legal life estates. A conventional life estate is one created by grant from the owner of the fee simple estate. A legal life estate is one created by statute in some states and depends on the law of the state where the real estate is located. Examples of this type of life estate include curtesy and dower. (not applicable in Texas)

Underwriting Manual Subtopic

Creation Of Conventional Life Estates

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Life estates can be created in real property by any of the methods of voluntary ownership permitted by law. The creation may be effected by:

  • A conveyance of a life estate to the life tenant, with the remainder to another or others.

  • A conveyance of only a life estate to the grantor.

  • A conveyance of the fee, reserving a life estate to the grantor.

  • A devise in a will of a life estate confirmed by a decree of distribution of the estate of the testator.

Generally, no particular words or forms must be followed in order to create a life estate. All that is necessary is for the language of the instrument to manifest an intention to create a life estate. Furthermore, the fact that no provision is made for a remainder or reversion is not significant since there is no rule of law that requires disposition of the remainder interest by the same document that creates the life estate.

The following are examples of language sufficient to create a life estate:

  • To "A for life".

  • To "A for/during his/her life".

  • To "A for/during the life of X".

  • To "A for/during the lives of X and Y and of the survivor of them".

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 By The Life Tenant

A tenant of life estate may sell, mortgage, lease, or otherwise dispose of the tenant's interest providing there is nothing prohibiting that action in the instrument creating the life estate.

By The Remainderman Or Reversioner

The interest of the remainderman and the reversioner may also be transferred or encumbered in the same manner as a present interest, subject to the life estate.

By The Life Tenant Together With The Remainderman or Revisioner

The joint conveyance to a third party, unless otherwise provided in such conveyance, would effect the merger of the life estate with the fee estate.

Underwriting Manual Subtopic

Life Estates Coupled With Power To Sell The Fee

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The instrument that creates the life estate may also give the life tenant the right to convey or encumber the fee estate. This right cannot be assumed or presumed.  When existing, it must have been unequivocally granted or reserved in favor of the life tenant.

The conveyance made by a parent to a child in which the parent reserves a life estate in the parent's favor, and in addition, reserves the right to see or encumber the property typifies this situation.

We will not insure the sale of title derived by a life tenant of a power to sell without the joinder of the remainderman without approval of a Texas Underwriter.

The information to be considered includes:

  • Whether the power was properly and unequivocally created.
  • Whether the remaindermen are opposing the transaction and refusing to join in the execution.

  • Whether the remaindermen are all or some of the children of the life tenant.

  • Whether the proposed purchaser is a child or relative of the life tenant.

  • Whether the proposed purchaser is a bona fide purchaser for value.

The grantee must be:

  • A bona fide purchaser for value.

  • Totally unrelated, by blood or marriage, to the life tenant.
    See also Texas Bulletins Tx2015003 transfer on death deeds and Tx2013001 Elder Law Planning 

Underwriting Manual Subtopic

Termination Of Life Estates

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A life estate terminates upon the death of the person whose life measures the duration of the life estate. No probate proceedings are required to vest clear and marketable title in the reversioner or remainderman. However, the fact of the death of the life tenant must be made a matter of record through the recording of a death certificate, an affidavit of death, or a proper recital in a real estate instrument pertaining to the chain of title.  Note that under privacy laws, only a family may be allowed access to such records.

The Creating Instrument

A life estate may terminate, during the lifetime of the life tenant, when an act occurs as provided in the instrument creating the life estate.

Merger Through Conveyance

A life estate may terminate by the merger of the estate of the life tenant and the estate of the reversioner or remainderman.