Jason Jones, a widower, died with three children. His two sons, Jerry, 59, and Jack, 55, are successful business men with families of their own. His daughter, Jane, 62, has never married, and has had, as her brothers put it, “difficulty being an adult.” Throughout her life, Jane has had periods of unemployment when she has been forced to live with her father. Afraid Jane might end up homeless, Jason included in his will a bequest of his homestead to “my daughter, Jane, for life with the remainder interest to my sons, Jerry and Jack, equally.” This provision created a life estate in the property in favor of Jane. After Jane dies, Jerry and Jack inherit the property outright. Since Jason’s will failed to designate the specific rights and responsibilities for Jane as the life tenant, those rights and responsibilities will be governed by Texas law.
What are Jane’s Rights as Life Tenant?
Jane is entitled to all the ordinary uses of the property as long as she lives. That means she can live there or lease the property and keep the rent as long as the lease doesn’t last longer than her life estate. She can make improvements on the property, if she so desires, but, if she does so, her brothers will not be required to reimburse her for those improvements.
What are Jane’s Responsibilities as Life Tenant?
Under the law, Jane is responsible for paying all the taxes and maintenance expenses, including the cost of repairs. She must not “commit waste” of the property. This means she cannot open new mines or wells on the property that would remove minerals. Also, she must make reasonable repairs to the property.
If the homestead had had a mortgage, which Jason’s did not, Jane would have had the responsibility to make interest payments that would preserve the estate. If there had been a mortgage and she had paid it off, she could seek reimbursement or contribution for that from Jerry and Jack.
Because of Jane’s circumstances, meeting these specified duties could present a problem if she lacks sufficient funds. Of course, it would be prudent for Jack and Jerry to pay the property taxes and maintenance expenses, if Jane does not. They are legally entitled to seek reimbursement from her for any expenses they pay. Practically speaking, however, they may not be able to recoup those amounts.
Is Jane Required to Maintain Insurance on the Property?
Jane, as life tenant, is not required to insure the property. Nor can she be required to repay amounts that Jerry and/or Jack have expended for property insurance. Clearly, Jerry and Jack would be wise to maintain insurance on the property to preserve the asset they will inherit when Jane dies.
Bequests Should Clearly Designate Rights and Responsibilities of Life Tenant
Jason could have avoided problems if he had spelled out Jane’s rights and responsibilities as life tenant. If Jason had the means, he could have anticipated Jane’s lack of funds and provided sufficient amounts to handle taxes, maintenance and repairs. He could have included funds for insurance premiums. Rather than give these outright to his daughter, given her history of irresponsibility, he could have established a trust funded for this purpose.
Jason, as anyone making a will which creates a life estate, should carefully consider the capabilities and resources of the life tenant and those receiving the remainder interest. Where possible adequate provision for expenses needed for preservation of the property should be made.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.