That includes paying property taxes, homeowner insurance, utilities, maintenance, repairs and any other expenses connected to the property. The life tenant receives any tax breaks related to their property, not the remainder owners. This includes a homestead exemption in states that offer it. Remainder owners, named in the life estate transfer, are often the children or other relatives of the life tenants. The downside is that the life tenant cannot change the remainder owner if they know it is likely the person will lose the property when they die.
Life means exactly that, and while the life tenant is still alive, he or she can rent the property and receive the rental income. Most life tenants are older individuals who want to stay in their homes. Generally speaking, any form of rent is income payable to the life tenant.
Bonuses and royalties are a little more complicated. Strictly speaking, bonuses and royalties are payments for depletion of the property and thus are ultimately payable to the remaindermen. However, the life tenant is entitled to the income from those royalties. Consequently, in the absence of any other arrangement, bonuses and royalties should be invested and the income paid to the life tenant.
One extremely important point: all of these general rules are subject to any agreement among the parties to the contrary. Lessons to be learned: when faced with a life estate, you should obtain an agreement among all of the parties stipulating how the bonus, rentals and royalties will be paid.
Least convenient? Least convenient. What does this have to do with oil and gas? All existing CTs have been cancelled and CTs will no longer be issued. Existing CTs will not need to be produced, and CoRD holder consent will not be required, for a dealing or plan to be registered. All existing Guidelines subject to this change are currently being reviewed and will be updated to reflect these changes.
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