Life Tenant's Rights

[sshouse]

My question involves real estate located in the State of: Kentucky

I purchased the family farm from my father a couple years ago. I wanted to go ahead and get it in my name to secure it for my kids. The agreement was to leave my father and step mom as life estate tenants, which I did. Now, my father has given my sister permision to build on the property. First off, can he do that without my consent? If he can, what legal liability do I have if the property were to get sued? Keep in mind that the mortgage on the property is in my name. The deed is in my name as well with the life estate for him and my step mom.

[Mr. Knowitall]

Now, my father has given my sister permision to build on the property. First off, can he do that without my consent?

She's building a home?

Your state has the following statute:

If any person, believing himself to be the owner by reason of a claim in law or equity founded on a public record, peacefully occupies and improves any land, and the land, upon judicial investigation, is held to belong to another, the value of the improvements shall be paid by the successful party to the occupant, or the person under whom and for whom he entered and holds, before the court rendering judgment or decree of eviction causes the possession to be delivered to the successful party.

You had best make clear to your sister that you hold the remainder interest in the property and that her improvements to the land will become your property upon your parents' death, lest she act in good faith upon your father's permission, believing that the home will be hers, and end up entitled to the value of her improvements. Even if you don't object to her gaining the value of her improvements or even of owning the home after the life estate ends, you would ideally have a contract spelling out your respective rights and duties, and addressing what will happen if disputes arise or if she (or you) wants to sell.

If he can, what legal liability do I have if the property were to get sued?

The life tenant has the responsibility to insure the premises. If the life tenant is not obtaining insurance you can take legal action, although I expect that would be awkward under the circumstances.

Keep in mind that the mortgage on the property is in my name.

That's not relevant to your respective rights.

The deed is in my name as well with the life estate for him and my step mom.

If you are the remainderman, you have a future estate while the life tenant has a present interest (and, unless the grant holds otherwise, the right of exclusive use and possession).

As an aside: Note that there may be issues down the road with Medicare, which could be impacted by whether this is a retained life estate or if your parents conveyed the property to you and you deeded back a life estate. Increasingly states are holding that Medicare liens apply to properties when there is a retained life estate, and the issue is working its way through the courts in a number of states.

[sshouse]

Thanks for the quick response. My main concern was my legal liability obligations.

The property was bought outright by me and I opted to leave him as life tenent on the deed so I am not sure where I fall concerning the medicare scenario.
Under what circumstances would she be entitled to the value of her improvements?

I am not sure what either of them are thinking at this point. I would not want to invest money in a property that was ultimately going to belong to someone else!