DEFINITION of Usufruct
Usufruct is a legal right accorded to a person or party that confers the temporary right to use and derive income or benefit from someone else's property. Usufruct is usually conferred for a limited time period. It can be granted to the usufructuary as a way to look after property until the death of a property owner and the estate can be settled if the property owner is in ill health. While the usufructuary has the right to use the property, he or she cannot damage or destroy it, or dispose of the property.
BREAKING DOWN Usufruct
Usufruct is only recognized in a few jurisdictions in North America, such as Louisiana. As an example, if a party has a usufruct in a real estate property, he or she has the full right to use it or rent it out and collect the rental income without sharing it with the actual owner, as long as the usufruct is in effect.
Example of Usufruct
For example Bert has been granted usufruct over Ernie's property. Ernie's property is a bed and breakfast with a large yard that needs tending. Ernie is in ill health and can no longer tend to the property and run the business. Bert, as the usufructuary, has the right to use the property and run the business on Ernie's behalf for the time the usufruct is in effect. The usufruct may be in effect until Ernie's death, when the estate will be settled and the property will be passed on per act of law or the directions in the estate.