Life Estate

AAA

DEFINITION of 'Life Estate'

A type of estate that only lasts for the lifetime of the beneficiary. A life estate is a very restrictive type of estate that prevents the beneficiary from selling the property that produces the income before the beneficiary's death. But the estate cannot continue beyond the life of the beneficiary.

INVESTOPEDIA EXPLAINS 'Life Estate'

Life estates are often created by donors who feel that their beneficiary will benefit more from the income from the estate than a lump-sum inheritance. Therefore these estates are invested in various income-producing instruments, such as bonds, CDs, oil and gas leases, REITs and other similar investments.

RELATED TERMS
  1. Estate Freeze

    An asset management strategy whereby an estate owner aims to ...
  2. Estate

    All of the valuable things an individual owns, such as real estate, ...
  3. Will

    A legally enforceable declaration of how a person wishes his ...
  4. Asset

    1. A resource with economic value that an individual, corporation ...
  5. Heir

    HeirA person who inherits some or all of the estate of another ...
  6. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
Related Articles
  1. Don't Put Off Your Year-End Tax Plan
    Taxes

    Don't Put Off Your Year-End Tax Plan

  2. Getting Started On Your Estate Plan
    Options & Futures

    Getting Started On Your Estate Plan

  3. Three Documents You Shouldn't Do Without ...
    Options & Futures

    Three Documents You Shouldn't Do Without ...

  4. An Estate Planning Must: Update Your ...
    Options & Futures

    An Estate Planning Must: Update Your ...

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center