National Real Estate Practice Exam

What characteristic defines a Life Estate?

1. It can be inherited by heirs

2. It is temporary and cannot be passed to heirs

3. It allows for unlimited use and development

4. It is perpetual and includes multiple owners

The correct answer is: It is temporary and cannot be passed to heirs

A Life Estate is a type of property interest that is defined by its temporary nature, where the rights to the property are limited to the lifetime of a specified individual, known as the life tenant. Once the life tenant passes away, the property interest ends automatically, and the ownership reverts to the original grantor or passes to another designated party—an arrangement referred to as the remainder interest. This structure emphasizes that a Life Estate cannot be inherited by the heirs of the life tenant since their rights exist only during their lifetime and do not extend beyond it. The nature of a Life Estate makes it distinct from other forms of property ownership, where interests can extend beyond an individual's lifetime and can be passed on to heirs. Hence, the temporary aspect is central to understanding what constitutes a Life Estate.