Detailed Answer
Under Arizona law, a life estate gives a person (the life tenant) the right to possess, use, and enjoy real property during their lifetime, subject to restrictions against waste. At the life tenant’s death, the property passes automatically to a named remainderman. Key aspects include:
1. Rights of the Life Tenant
- Possession and Use: The life tenant may occupy, rent out, or otherwise use the property for life. (See ARS §14-101 for definitions: https://www.azleg.gov/ars/14/00101.htm.)
- Income Generation: The life tenant can collect rents, profits, and other income from the property.
- Maintenance Obligations: The life tenant must keep the property in reasonable repair and pay property taxes and insurance premiums to prevent waste.
- Limitation on Transfer: The life tenant cannot transfer a greater interest than what they hold; they may sell or mortgage only their life interest, which ends at death.
- Prohibition on Waste: The life tenant must avoid voluntary or permissive waste—no damaging alterations, demolition, or neglect that devalues the estate. (See ARS §33-282(A) on waste restrictions: https://www.azleg.gov/ars/33/00282.htm.)
2. Determining the Remainder Interest
When a will designates a remainderman, the future interest vests according to these rules:
Vested Remainders
A vested remainder exists if the remainderman is identified and certain to inherit (for example, “to Alice for life, then to Bob”). Bob’s interest is vested; he will receive full ownership when Alice dies.
Contingent Remainders
A remainder is contingent if the beneficiary is unborn, unascertained, or subject to a condition precedent (for example, “to Alice for life, then to Bob’s first grandchild”). If no grandchild is born, the remainder may revert to the estate or pass under a residuary clause. (See ARS §14-2101 on residuary gifts: https://www.azleg.gov/ars/14/02101.htm.)
How It Works at Death
Upon the life tenant’s death:
- Any vested remainderholder obtains immediate fee simple ownership without probate intervention.
- If the remainder is contingent, it may require a court determination or pass under alternate clauses in the will.
- If no valid remainder exists, the property may pass as part of the residuary estate or via intestate succession under ARS Title 14, Chapter 2.
Helpful Hints
- Review your will’s language carefully. Clear wording avoids unintended contingent interests.
- Consult a probate attorney if a remainder is contingent to confirm who takes ownership at the life tenant’s death.
- Keep property insurance and tax payments current to prevent life-tenant waste claims.
- Document any improvements made by the life tenant to adjust value between life tenant and remainderman if a dispute arises.
- Include a residuary clause in your will to handle unexpected gaps when contingent remainders fail.