Detailed Answer
Under Colorado law, a life estate grants the life tenant exclusive possession and use of real property during the tenant’s lifetime. A testator may create a life estate by will, giving the named life tenant rights to occupy, lease or collect income from the property. When the life tenant dies, the property passes automatically to the remainderman designated in the will.
Rights of the Life Tenant
- Possession and Use: The life tenant may live on, lease or rent the property and collect income (C.R.S. § 38-30.5-103).
- Income and Profits: The life tenant keeps all rents, crops or other earnings during the life estate.
- Transfer Rights: The life tenant may sell or lease their interest, but any buyer takes subject to the remainder interest.
Limitations and Duties
- Duty to Avoid Waste: The life tenant must preserve the property’s value and cannot commit voluntary or permissive waste (Common law principle).
- Maintenance and Taxes: The life tenant pays property taxes, insurance and ordinary upkeep.
- No Permanent Alterations: Major changes or removal of fixtures may require remainderman consent.
How Remainder Interests Work
A remainder interest is the future interest granted to a person (remainderman) who will receive full title when the life tenant dies. A will can create either a vested remainder or a contingent remainder.
- Vested Remainder: The remainderman is identified and has an immediate future interest not subject to conditions precedent.
- Contingent Remainder: The interest depends on a condition or on identifying the remainderman after the life tenant’s death.
Under Colorado’s Uniform Probate Code, testamentary interests must vest or fail within the rule against perpetuities time frame (lives in being plus 21 years). See C.R.S. § 15-11-201.
Relevant Colorado Statutes
- C.R.S. § 15-11-106: Rules for distribution and vesting of testamentary interests.
- C.R.S. § 15-11-201: Rule against perpetuities and vesting periods.
Helpful Hints
- Review the will carefully to confirm life tenant and remainderman names and conditions.
- Document maintenance and repairs to avoid disputes over waste.
- Obtain a title report to identify encumbrances before accepting the life estate.
- Consider liability insurance if leasing the property during the life estate.
- Consult a Colorado estate attorney when drafting or interpreting life estates and remainders.