Life Estate

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.

BREAKING DOWN '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.

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RELATED FAQS
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    This has been the topic of an ongoing debate in the financial community between estate planning attorneys and financial advisors. ... Read Answer >>
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