A life tenant owns the right to live in a property until she dies. At death, ownership reverts to someone else, usually the life tenant's children. The life tenant and the eventual owners, known as remaindermen, have a legally complex relationship. While they both co-own the property, their ownerships happen one after the other rather than simultaneously. This means that the life tenant cannot do anything to harm the remaindermen's ownership, such as selling the property or letting it fall into disrepair.
Duty-Bound to Repair
Simply put, a life tenant minds the store for the remaindermen until such time as the remaindermen take over ownership. Thus, the life tenant must maintain the property and stop it from falling into disrepair. She must, for example, fix a leaking roof, as failure to do so would cause long-term damage to the property. However, the life tenant does not have to carry out extraordinary repairs that improve the property, such as replacing a reparable roof. Extraordinary repairs are the job of the remaindermen.
Taking Care of the Taxes
The life tenant is responsible for paying property taxes and utilities during her lifetime. Her name should appear on the bills as if she owned the property outright. The life tenant can negotiate with the remaindermen to pay some or all of these costs. However, if they do not pay, the life tenant must. A remainderman who steps in to pay bills that are the life tenant's responsibility can sue the life tenant for reimbursement.
Mortgage Payments Map Respective Interests
If the property has a mortgage, the life tenant is responsible for paying the mortgage interest until the expiration of the mortgage term, or until the life tenant dies, whichever happens first. The remaindermen, as ultimate owners, are responsible for paying the mortgage principal. Similarly, the life tenant should insure her life interest in the property, while the remaindermen are responsible for insuring their reversionary interest. This requires specialized homeowners' insurance -- an insurance carrier should be able to help.
Selling Is Not Straightforward
Life tenants can sell the property but the buyer would only get the right to live in the home until the original life tenant -- the seller -- dies. Few third-party buyers would accept such a limited interest. Therefore, the only way to sell the home is jointly with the remaindermen, so that all owners divest themselves of their respective interests in the home. The life tenant is allowed to rent the property without the remaindermen's consent. Because the rental income accrues during the life tenant's lifetime, it is hers to keep.