Buying a Home That Has a Life Estate

My question involves real estate located in the State of: New Jersey

Ok so I am trying to buy a home from a seller that is the remainder of a Life estate. (he is not family but just a the one who she sold it to originally )The Life tenant is still alive she is 95 living in a care facility. The seller went to the nursing home to have the women sign the deed with him to sell the property to me. The doctors there stopped him and said that she is not aloud to sign anything and that she is deemed incompetent. So now the bank that im getting my mortgage from says that i cant buy a house with a life estate because the title company wont transfer it unless both sign. So what do i do? if the life tenant cant sign or make decisions for herself then what? she does not live in the home and it has been empty for awhile. is my only option really that, it has to wait for her to die?

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Quoting KaitlynSatt

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My question involves real estate located in the State of: New Jersey

Ok so I am trying to buy a home from a seller that is the remainder of a Life estate. (he is not family but just a the one who she sold it to originally )The Life tenant is still alive she is 95 living in a care facility. The seller went to the nursing home to have the women sign the deed with him to sell the property to me. The doctors there stopped him and said that she is not aloud to sign anything and that she is deemed incompetent. So now the bank that im getting my mortgage from says that i cant buy a house with a life estate because the title company wont transfer it unless both sign. So what do i do? if the life tenant cant sign or make decisions for herself then what? she does not live in the home and it has been empty for awhile. is my only option really that, it has to wait for her to die?

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If she is incompetent to handle her own financial affairs then hopefully either (1) she executed a durable power of attorney while she was competent giving someone (known as her agent) the power to handle her finances or (2) a court has appointed a conservator for her. If you can find her agent or conservator and that person is willing to execute the deed transferring her life estate to you that may be sufficient to satisfy the title company’s concerns.

somebody is really miscommunicating with others

you can buy the property from the remainderman without any input from the current life tenant. The purchase will be subject to the same life tenancy the current remainderman is subject to but you can do it

no idea why anybody approached the current life tenant. She has to be willing to give up her tenancy if you are to assume possession of the house before her tenancy ceases (typically when she would die).

Many lenders will not lend to a purchase of the remainder because it is obviously not an owner occupied home purchase which makes it an investment purchase with very different rules for lenders.

Either you misunderstood what the title company meant or they did not understand what you are doing. There is absolutely no problem executing a deed transferring the title to you BUT it will be subject to the life tenancy as i said before. It has happened many many times before and it will happen many many more times in the future.

So, in other words; unless you are paying the life tenant for her remaining tenancy, leave the old woman or her agents of any POA alone. Otherwise you are free to purchase the remainder share at any time. The guy you are buying from does not need the life tenants signature on any deed to sell you what he owns.

the fact he is trying to get the current life tenant to relinquish her rights without any compensation is a real problem to me.

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Quoting KaitlynSatt

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is my only option really that, it has to wait for her to die?

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No.

Your other option is to walk away from the deal and find another house to buy.

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Quoting adjusterjack

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No.

Your other option is to walk away from the deal and find another house to buy.

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i really dont want to walk away from the house ive invested so much time and money into so far for estimates and my appraisal n surveys. i life tentant has no POA and as far as we know noone that really can sign for her shes alone in a nursing home that she was put in. I could take the life estate in my new title is i wasnt going through a lender to purchase but i am using a bank to do this. I was told that she had to sign the deed also but maybe that was wrong. its the title company thats stopping me. i still dont understand what i am to do to get this through.

Also when the house is sold some of the money does go to the life tenant so its not like shes being steamrolled. They say all we need to do is just have both parties sign it she is willing to sign but her doctors are the ones who are saying she cannot cause she doesnt know what she is signing that she is incompetent. can they really make decisions like that for her?

Unless the life tenant is a party to the sales agreement (given her incompetent status she obviously is not) then she is not a party to your contract with the remainderman. It sounds like the remainderman has come to self calculated amount he feels the life tenant is entitled to. The problem with that; its BS.

Since the life tenant is incapable of contracting anything, your only real option is to have the current remainderman file in court to terminate the life tenancy. Whether he is successful or not is up to facts not presented and the courts.

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Quoting jk

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So, in other words; unless you are paying the life tenant for her remaining tenancy, leave the old woman or her agents of any POA alone. Otherwise you are free to purchase the remainder share at any time. The guy you are buying from does not need the life tenants signature on any deed to sell you what he owns.

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The whole point, however, is that the title company will evidently not insure title (and perhaps the lender will not lend) if the property is subject to a life estate. Moreover, the purchaser may well want to have the rights of possession to the place before the life tenant dies. So it may well be that getting the life tenant to sign over the life estate is important for the deal.

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Quoting jk

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the fact he is trying to get the current life tenant to relinquish her rights without any compensation is a real problem to me.

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You are assuming that the life tenant would get no compensation. But we have no way to know that from the facts we have here. Moreover, whomever her custodian or agent is has a fiduciary duty to act in her best interests. Presumably he or she would ensure she got fair value for her life estate (which at age 95 won’t be worth much) before agreeing to the transfer.

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Quoting jk

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Since the life tenant is incapable of contracting anything, your only real option is to have the current remainderman file in court to terminate the life tenancy. Whether he is successful or not is up to facts not presented and the courts.

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If the woman has a custodian or agent then this is not the only option. Contacting the custodian or guardian to see if he or she would be willing to negotiate a sale of the life estate is also an option, and may be a much cheaper and faster way to go.

E=Taxing Matters;923928]The whole point, however, is that the title company will evidently not insure title (and perhaps the lender will not lend) if the property is subject to a life estate. Moreover, the purchaser may well want to have the rights of possession to the place before the life tenant dies. So it may well be that getting the life tenant to sign over the life estate is important for the deal.


there is no reason a title company would not provide insurance. At most they would except claims concerning the life tenant but for all practical purposes there is no difference between s property with a life estate and one without other the than the life estate. The remaindermen are already in title. The property has already been transferred to them via deed. It is simply encumbered by the life estate. We already know the lender won't lend and I suspect it is as i said before; due to the life estate this is considered an investment property Which usually means a lot of difference in the lenders activities and who may underwrite or purchase the loans.











You are assuming that the life tenant would get no compensation. But we have no way to know that from the facts we have here. Moreover, whomever her custodian or agent is has a fiduciary duty to act in her best interests. Presumably he or she would ensure she got fair value for her life estate (which at age 95 won’t be worth much) before agreeing to the transfer.

This whole thing sounds shady. The incapacitated woman is to sign a deed relinquishing her rights and she can't so how can she have entered into s contract to sell her interest? And with that, if she has already entered into a contract to sell her interest this can all be done, if necessary, without her participation if needed.


It it was stated she has no POA (and presuming the same with conservator) there is nodody that has the authority to make sure she gets anything here or that can authorize acceptance of a given offer. No POA means it has to go to court or somebody in a position to be granted guardianship gets powers of POA.


If the woman has a custodian or agent then this is not the only option. Contacting the custodian or guardian to see if he or she would be willing to negotiate a sale of the life estate is also an option, and may be a much cheaper and faster way to go.


If... Since the first place the seller headed was to the nursing home and after being rebuffed, it would appear seller is not aware of any POA, guardian, or other fiduciary that may be able to act on tenants behalf i wonder if there is anybody in such a position. Given it appears the nursing home did not refer seller to any such person that might be able to help, again, I would suspect there is nobody in such s position.


sorry about the lack of quote blocks. On my phone and a pain to make it work. Tried to color text but you see how that worked out too I'm sure

I see another possible wrinkle here. If she is being denied Medicaid because her assets have not been totally spent down and liquidated (the remaining value of her life estate) then that could be a factor in this whole mess as well. The OP certainly would not be aware of that if it was the case, but its a more than valid possibility.

I really hope that there is a POA out there that can sign off on this sale if that is the case. Not for the sake of the OP, but for the sake of the 95 year old woman.

All we know is that the the remainderperson and the OP do not know of any agent or conservator appointed for the woman. Maybe there isn’t one, or maybe they just have looked hard enough to find who it is. I wonder, though, how the nursing home, medical bills, and the like are being paid if there is no conservator or agent to authorize the payment.

If there is truly no agent or conservator and the woman is incompetent then until such time as a conservator is appointed or she dies there may be no good options to pursue here. They could try a partition action or action to terminate the life estate, but whether either of those would succeed is unclear on the facts we have and in any event in order to do either one the court would first have to appoint a conservator or guadian ad litem to act in her interests in the litigation anyway.

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Quoting llworking

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I see another possible wrinkle here. If she is being denied Medicaid because her assets have not been totally spent down and liquidated (the remaining value of her life estate) then that could be a factor in this whole mess as well. The OP certainly would not be aware of that if it was the case, but its a more than valid possibility.

I really hope that there is a POA out there that can sign off on this sale if that is the case. Not for the sake of the OP, but for the sake of the 95 year old woman.

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I would hope not given she has outlived the most lenient actuarial tables. In truth there is no actual value to her life estate

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taxing matters:

i think we have reached a basic agreement on the matter.