Of the seven units of Legal English* that I teach in the Máster en Asesoría Jurídica de Empresas at the Universidad Carlos III in Madrid, each year my students unanimously vote “Property Law” as the one they find the most difficult to understand. All of my students are young lawyers, but they perceive Anglo-American property law as being far removed from the system of derechos reales that they studied in their courses on Derecho Civil. And the concept of “life estate” is perhaps the aspect that they find most challenging. In the event it may be of interest to readers of this blog, I’m reviewing below some of the concepts that we recently discussed in class.
First, an overview:
Life Estate—A life estate is an estate limited in duration to either the life of the owner or the life of another person. It may be created by deed (in this context, an instrument by which a grantor grants to a grantee some type of interest in land), by will, or by operation of law. If A grants a life estate to B and retains the fee, he or she is said to have a reversionary interest (a right to the future enjoyment of property that one originally owned). When B dies, the land will revert (go back) to A. If A grants real property “to B and on B’s death to C,” B will own a life estate and C will own a remainder interest (an interest that takes effect after another estate has ended) in fee simple. Life tenants may likewise convey their interest to others. Thus, if B conveys his or her life estate to D, D will own a life estate for the duration of B’s life, after which the property will belong to C, the holder of the fee. When a person holds property for the duration of the life of another, this is known as an estate pur autre vie.
Here, the initial problem may reside in grasping the meanings of “estate,” “interest” and “fee” as used in property law contexts. Perhaps we can explore these concepts further in a future blog post, but for now it will suffice to say that here “estate” denotes the amount, degree, nature and quality of a person’s interest in land; “interest” refers to a legal or equitable claim or rights in property; and “fee” is a heritable interest in land, “fee simple” being absolute ownership akin to dominio pleno in Spanish property law.
But although the specific meanings of “estate,” “interest” and “fee” seemed clear to my students and they realized that (salvando las distancias) “life estate” might be considered somewhat similar to usufructo vitalicio, they still struggled to understand the three traditional life estates: reversionary interest; remainder interest and estate pur autre vie. Placing these in a practical example was the key. When we looked at this from the perspective of four friends, the relationships became clearer:
Common Law Life Estates among Four Friends
(Paco, Javi, Manolo and Juan)
Paco is a generous guy who decides to grant his friend Javi a life estate in his beach house, while retaining the fee (ownership) for himself. After Javi dies the property will revert (return to; go back to) Paco, the original owner. Paco has retained a reversionary interest in the beach house over which he granted Javi a life estate.
Paco grants a life estate in his beach house to Javi, stating that when Javi dies the property will go to another friend, Manolo. Javi has a life estate in the property while Manolo has a remainder interest, an interest that only takes effect after another estate has ended (and in legal terms Manolo is a remainderman).
Paco granted Javi a life estate in his beach house, but Javi already has a bigger house on a nicer beach. So Javi decides to convey his life estate in Paco’s beach house to Juan. Juan will have a life estate for as long as Javi is alive. So, Juan enjoys a life estate, but only during Javi’s lifetime. Juan holds the beach property for the duration of another person’s (Javi’s) life (pur autre vie—for the duration of the life of another).
For another aspect of property law (easements–servidumbres) see here
For general comments on derechos reales, see here
For more on usufructo, see here and here
*Contracts; Corporate Law; Civil Procedure; Criminal Law and Criminal Procedure; Labor Law; Property Law and Tax Law