Abandoned life estate1/27/2024 ![]() ![]() Abandoned property - Demutualization or related reorganization of insurance company. male’s life expectancy of 84.3, “a lot can happen before possession of the property is actually conveyed. Remainder in fee to heirs after life estate. And even though the mansion is a decent candidate for a tear-down, “don’t start spending money on plans for the property,” Reiss adds.Įven though Hef is already past the average U.S. “After all, it is known as a party house.”Īll in all, if you’re salivating for a piece of Playboy history, make sure to man up your legal team to protect you from all that could go wrong before you’re able to take possession. Some people who are on their second (or more) marriage bequeath a life estate to their new spouse. “What if there’s a fire and the place burns down? What if Hefner falls down and breaks his hip?” asks Wendy Flynn, a Realtor® in College Station, TX. A life estate can be a useful estate planning tool, especially for couples who re-marry and want to preserve an inheritance for children from a previous marriage. “Moreover, the purchaser must deal with the uncertainty of the life estate: Will it end in a year or in 10 years?”Īnd aside from these uncertainties, there’s the question of liability. Without adequate legal protection, the owner could be responsible for any damage to the property or its inhabitants. Granted, Hef is 89 and probably passes his days playing chess, but if Playboy bunnies continue to hop in and out, anything could happen. “The life estate would likely significantly reduce the fair market of the property, because the purchaser must defer taking possession as well as other aspects of ownership-renovating it, for example-until the death of the life tenant,” Reiss says. While the listing price may be $200 million, most experts say that $80 million to $90 million is more realistic. “This seems like a version of a reverse mortgage, because it frees up equity in the home during the owner’s lifetime without interfering too much with his use and enjoyment of the property,” Reiss continues.īut this privilege will likely drag down the asking price, a lot. A common example would be where a husband bequeaths a life estate in the home to his wife, with the remainder to his children upon her death.”īut Hefner’s deal differs in one key way: He’s not bequeathing his home to family members or even a deserving Playboy bunny, but to an as-yet unknown third party who’ll be forking over millions to move in once Hef passes on. Upon death, complete ownership of the property can pass to another. “Effectively, a life estate grants the many of the indicia of full ownership for the rest of his life. “Life estates go way back to the earliest roots of the common law, and they are great for providing for someone to live in his or her own home until death,” says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School.
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