Lesson # 216 - Life Estates

Following gifts causa mortis, the Shulhan Aruch has a chapter on Life Estates and Wills. This lesson discusses the use of the life estate to transfer ownership to assets complying with halacha and legally avoiding the order of descent requirements, as stated in the Torah in Bamidbar 27. Unless otherwise noted, the owner of the life estate is designated as Reuven and the underlying owner is designated as Shimon.

The ownership of a thing, such as a parcel of real estate (Parcel A), can, for the purposes of this lesson, be divided into two simple components: (I) the ownership of the underlying real estate of Parcel A; and (2) the right to use Parcel A. Most often, both of these are merged so that the underlying owner and the user are the same person. But there are times when the two are not merged, that is, Shimon is the underlying owner and Reuven has the use of the real estate for a given period of time, as with a lease, or during his (Reuven's) lifetime, as with a life estate.

The life estate may be established in many ways. For example, Reuven, who is in good health, transfers to Shimon by a written deed, or some other valid method of transfer of real estate title, ownership of Parcel A, the transfer to take effect ''as of today, and after my death."

Shimon immediately becomes the underlying owner of Parcel A, and Reuven retains a life estate to use parcel A and retain the profits from the use.

The life estate includes the profits of the parcel. For example, the land produces apples. Although the apples are not in existence and a person cannot sell something not yet in existence, he may reserve the right to benefit from something not in existence. Since the land is in existence, Reuven may sell Shimon the land, although Reuven will only have the use of the land. After the death of Reuven, Shimon will have the use of Parcel A as well as the ownership of the underlying land; both the use and underlying ownership will merge in Shimon. There may be any combination of such estates.

Instead of using the term ''as of today," the life estate is established if the memorandum describing the gift that was transferred by an act of acquisition by Shimon (or a deed, if the deed is the method of transfer) had a date in it. Thus, a deed dated January 1, 2004, and stating that Reuven, the donor, "gives to Shimon parcel A upon the death of Reuven", establishes a life estate that remains with Reuven, and the underlying ownership of parcel A is transferred from the date of the deed or memorandum to Shimon. The fact that the document has a date when it is not needed indicates that the date is meant for the gift to take effect ''as of today." The date is not needed since the underlying ownership does not require a date; the date of death of Reuven is crucial to Shimon, for on that date he also owns the use of Parcel A. But that date cannot be put into the document, for no one knows when Reuven will die. Thus, the date takes the place of the words ''as of today".

If Reuven reserves for himself the right to live during his lifetime in the house he gives away by gift, he may reside there with his wife and all of his helpers. If he has no means to sustain himself from outside sources, Beth Din will use part of the gift to sustain him. This includes the wages of his servants, clothing for himself and his wife, and everything else that Beth Din deems essential.

If Reuven thereafter acquires funds, he need not repay Shimon for all of the essentials decreed by Beth Din. Reuven should not, in the first instance, sell Parcel A since he does not own the underlying land, and Shimon should not, in the first instance, sell Parcel A since he does not own the use of Parcel A during Reuven's lifetime. However, Reuven may, in the first instance, sell his right to use Parcel A during Reuven's lifetime, and Shimon may, in the first instance, sell the underlying parcel without the use thereof until Reuven dies. If Reuven does sell Parcel A to Levi, Levi has the use and profits of the parcel for the duration of Reuven's life. Upon the death of Reuven, Shimon or Shimon:'s heirs may evict Levi from Parcel A. If Levi was unaware that Reuven owned only the use of Parcel A, upon discovering this fact, he may rescind the sale and demand his money back. If he was aware of this fact, he cannot rescind the sale even if it was inaccurately described as a sale of "Parcel A," and not as it should have been described, as a sale "of the use and profits only of Parcel A for the duration of Reuven's life."

Also, if Shimon does sell Parcel A to Naftali, Naftali will not have the use or profits of Parcel A until Reuven dies. When Reuven dies, Naftali is the full owner of Parcel A, (the underlying parcel and the use of the parcel, both having merged in Naftali). This is true even if Shimon dies before Reuven and after having sold Parcel A to Naftali. If Naftali was unaware that Shimon owned only the underlying parcel, upon discovering this fact, he may rescind the sale and demand his money back. If he was aware of this fact, he cannot rescind the sale even though it was inaccurately described as a sale of "Parcel A' and not as it should have been described, as a sale "of the underlying Parcel A only during the lifetime of Reuven, and after Reuven's death to include the use of Parcel A."

Assume that Reuven, the owner of the life estate of Parcel A, sells the use and profits to Levi, and Levi thereafter purchases from Shimon the underlying interest in Parcel A. Or Levi first purchases from Shimon the underlying ownership of Parcel A, and thereafter purchases the life estate from Reuven. In both cases, the estates merge in Levi, who is now the complete owner of Parcel A. However, assume that Reuven sells his life estate in Parcel A to Levi, and thereafter, Reuven buys the underlying ownership from Shimon. Levi does not have any claim for the underlying estate. Similarly, if Shimon sells to Levi the underlying ownership, and thereafter Shimon purchases the life estate from Reuven, Levi does not have any claim for the life estate.

All profits collected from Parcel A before Reuven dies belong to the heirs of Reuven. All profits for the period after the death of Reuven belong to Shimon. What about profits that came into existence during the lifetime of Reuven but were not yet collected or harvested?

Regarding produce that is not yet fully ripe and not ready for harvesting but still needs the nourishment from the soil, there are opposing views. The first view holds that since it is not ready for harvesting, it belongs to Reuven, since his intent was not to give the fruits to Shimon. The second view holds that it belongs to Shimon, since it is still attached.

The subject matter of this lesson is more fully discussed in Volume VII Chapter 257 of A Restatement of Rabbinic Civil Law by E. Quint. Copies of all volumes can be purchased via email: orders@gefenpublishing.com and via website: www.israelbooks.com and at local Judaica bookstores.
Questions to quint@inter.net.il

[The Parshat Vayigash Homepage]
[The TORAH tidbits Homepage] [How to use TORAH tidbits]
[About The OU/NCSY Israel Center] [About TORAH tidbits]
[www.ou.org]