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  1. #1
    Join Date
    Mar 2008
    Location
    Florida
    Posts
    1

    Default How To Draw Equity Out Of A Life Estate

    I have been reading some of the thread's about life estates. Can someone please provide me with the legalities of what a life estate is. My mother has a life estate in "Florida", we want to take some of the equity out of the home, without having to go to the remaindermen for permission. From everything I have read we can do this, but everyone we have talked to so far, get all freaked out when you say the word "Life Estate". I need something to take to them to say that my mother has every right to take the equity out of this home. Any help with case sightings or articles pertaining to this topic would be very much appreciated.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: How To Draw Equity Out Of A Life Estate

    A life estate gives one person, the "life tenant", the right to exclusive possession of property for the rest of her life. She pays the costs of routine maintenance, taxes, mortgage interest, and insurance.

    The remaindermen have a future interest in the property, and get full ownership when the life title dies. During the life tenant's life, they pay toward the principal of mortgages.

    Few lenders will give the life tenant a mortgage without the consent of the remaindermen, as a life tenancy usually has very little market value, and they cannot put a lien against the remainder interest in the property without the consent of the remaindermen.

    If the life tenant did manage to take out a mortgage subsequent to the creation of the life tenancy, solely for her own benefit and to withdraw equity from the property, the remaindermen would not have to contribute toward principal. That would be different if the loan were for a capital improvement, and the remaindermen consented to the mortgage.

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