Does a life estate have any value?
There is a value to a life estate. Upon sale, the life tenant is entitled to compensation for the sale of their interest. Life estates are valued using the age of the life tenant and the present fair market value of the property.
How does a life estate work in Minnesota?
The term “life estate” describes a kind of joint ownership of real estate, such as a house. You can sell or give your home to your children, but keep the right to live in or control the home until you die.
Can I sell a house with a life estate?
Can Someone With a Life Estate Sell the Property? A life tenant cannot sell the property or take out a mortgage loan against it without the agreement of the remainderman. The reverse is also true: The remainderman cannot sell or mortgage the property during the lifetime of the life tenant.
When to use a life estate in Minnesota?
A life estate works best when the parent knows that he or she doesn’t want to sell the property during his or her lifetime. The assets of life estates created after August 1, 2003 in Minnesota are subject to liens by the State of Minnesota if the life tenant receives any Medicaid or state medical assistance payments.
How is the value of a life estate determined?
The value of the property may be determined by a licensed real estate appraiser if the accuracy of the EMV is disputed. The value of a life estate interest at the time the property is sold is the sale price of the property multiplied by the person’s mortality figure as determined by the Life Estate Mortality Table.
When is the value of a life estate interest unavailable?
The value of a life estate interest is considered unavailable unless: n the remainderman purchases the life estate interest from the life estate owner. n the life estate owner and the remainderman sell both the life estate and the remainder interest in the property.
When do life estate interest and remainder interests merge?
If a person owns both the life estate interest and the remainder interest, the life estate and remainder interests merge into full ownership of the property. The property is evaluated as a non-life estate real property and the equity value of the property is a countable asset. Minnesota Statutes, section 256B.056, subdivision 1a