Detailed Answer
Under Michigan law, a testator can create a life estate by will. A life estate gives a life tenant an ownership interest in real property for the duration of the tenant’s life (MCL 700.7103). This interest includes:
- Possession and use: The life tenant may live on the property, rent it, or earn income from it.
- Maintenance duties: The tenant must maintain the property, make ordinary repairs, and pay property taxes and insurance.
- No waste: The tenant cannot commit voluntary or permissive waste, meaning no actions that damage or diminish the property’s value.
When the life tenant dies, the life estate ends automatically. At that point, full ownership passes to the remainderman, the person holding the future interest. A remainder interest is defined under Michigan’s Estates and Protected Individuals Code (EPIC) as a future interest in property that becomes possessory when a prior estate ends (MCL 700.1103).
Remainders are either:
- Vested: The remainderman is identified and no condition must be met.
- Contingent: The remainderman is not determined or must satisfy a condition precedent.
A will designates a remainderman and can specify whether the remainder is vested or contingent. The remainder vests upon the testator’s death if all conditions are met. Until the life estate ends, the remainderman has no right to possess or profit from the property.
If a life tenant commits waste, the remainderman may bring an action in probate court to stop waste or seek damages (MCL 700.7204).
Helpful Hints
- “Life tenant” means the person with the life estate interest.
- “Remainderman” means the person who receives full ownership after the life tenant’s death.
- Vested remainders are more secure because they are certain and unconditional.
- Contingent remainders can fail if the condition precedent does not occur.
- Life tenants can lease but cannot encumber the property beyond their lifetime.
- Clear language in the will helps avoid disputes between life tenants and remaindermen.
- Consult an attorney to draft or review life estates and remainder provisions.