A life estate is an interest or right in land subsists for the life of the grantee only. A variant is an estate which lasts for the life of a third-party, and which is measured by that life, and a life estate pur autre vie, in the Norman French. Life estates may subsist only as an equitable interest under and express or deemed trust after the 2009 land law reforms.
Prior to the 2009 reforms, a life estate could take effect as a legal interest in itself. Life estates have been subject to special legislation since the nineteenth century, which granted the life estate owner powers to sell and otherwise deal with a property. The right of the persons who would otherwise have succeeded him, attach to the proceeds of the sale and to substitute reinvested assets.
Life estates were a common feature of landed estates. The landed estate itself was typically “settled” and resettled, generation after generation so that the current owner typically held it for life owned with subsequent interests vested in his children.
Until relatively recent times, widows were commonly granted life estates in their deceased husband’s property with the remainder (future interest) vesting in the eldest son or children of the marriage.
Dower and Curtesy
Prior to modern succession legislation, a widow was entitled to a life interest in one-third of her husband’s freehold land under the Dower Act 1833. Prior to 1833 a widow was entitled to a right of Dower over lands sold or given away by the husband during marriage, but was not entitled to an interest where he did not hold the legal interest.
On marriage, the woman’s legal personality merged with that of her husband for mmost purposes, and he was given effective control over her assets. Dower extended to one-third of the lands seised in fee by the husband during the marriage. A wife might bar her right to dower in advance under a marriage settlement, under which she agreed to take instead to take a jointure.
A jointure was an interest in her husband’s property, either a particular share, or a life interest in a particular part of the land, or an annuity. Strictly dower was only available from land that her husband owned, but a life tenant under a settlement was often given the power to appoint a jointure for his wife. A wife retained her right to dower (if not barred by a settlement) even if her husband sold the property; however, this right could also be barred by a fictitious court proceeding known as levying a fine.
The male equivalent of dower was curtesy, which is the life estate of a widowed male in all of the land in which his wife had a freehold interest. It was a condition that there was a child of the marriage. rovided that children of his couldn’t hurt. With both Dower and curtesy it was a condition that children who couldn’t hurt survived.
Both Dower and curtesy were abolished by the Succession Act 1965.
Rights and Liabilities
A life estate is a very tenuous interest in that it subsists, only for the life of the grantee. In the case of an estate pur autre vie, the interest is measured by the life of the named third-party. The interest of the life estate holder terminates on the death of the person whose life measures the estate.
The life tenant had power at common law to grant leases. However, but these ended on the tenant’s death so that they were unsatisfactory from the tenant’s perspective.
Because of the limited nature of the life interest, the life tenant was subject to restrictions on how he might deal with the lands.
The principle of waste generally permitted improvements to the land. However, certain improvements were not permitted, if they damaged the environment at the expense of the future interest holders. The life tenant was not generally responsible for failing to preserve the value of the land, but for failure to repair. The terms of the trust of the settlement under which he held a life tenant might oblige him to repair.
If the life tenant took some action which reduced the value of the land, the tenant for life was liable for waste, unless the settlement or trust exempted him.
The life tenant was entitled cut wood purpose of fuel, repairs and the current land uses. Dead wood should be cut where available. There was a right to cut turf or fuel, where the land included a bog.
The 18th century Timber Acts allowed tenants for life to register trees. He then became entitled to cut and sell them. The right was withdrawn in 1791 but was preserved for the lessees under leases for lives renewable for ever.
A life tenant was liable to future interest holders, for acts of destruction or so-called equitable waste, unless specifically exempted by the trust or settlment. Being made unimpeachable for waste would be sufficient to exempt the life tenant from liability for acts which reduced the value of the property.
Equitable waste refers to wanton waste or destruction. Non-impeachability for waste under the settlement/trust would not exempt the life tenant from liability to future owner for equitable waste.
In the case of agricultural lettings of land held by life tenants, the tenants had right of emblements, which is the rights to enter the land to remove crops sown during the tenancy after its termination, such as on the death of the life tenant.
Lease for Lives Renewable
Leases for lives renewable for ever are a uniquely Irish interest and were the product 18th-century penal legislation. On a superficial level, they had features of the life estate, being for the life of another. The interest was not a life estate but a lease. A rent was paid. However, there was freehold tenure, by reason of their potentially perpetual nature.
The attraction of the interest in the 18th century was that it created some of the benefits of freehold tenure such as the franchise (the vote) in some cases while permitting the landlord the degree of control of a lease. Other motivations included the circumvention of some aspects of the penal laws such as legislation which required the fee-simple or fee tail to pass to the sons of a Catholic land owner collectively. In earlier times it was used in plantor communities in that it centralised control and requirements in relation to the land while granting a potentially perpetual interest.
Lease for lives renewable for ever contained a clause providing that if any of the lives with reference to which the estate was measured died, it could be replaced with another life, on payment of a fine. A fine is a lump-sum payment to the original grantor.
The courts of equity allowed an equitable right to renew the lease even where the contractual right failed. The courts of equity allowed late renewal, even where all the relevant lives had died on payment of an additional fine. Renewals would be allowed when several lives have died provided the fines of fine equivalent was paid.
The equity was recognised by the House of Lords in 1722. It might be refused in the case of a very substantial delay other than cases of fraud or accident. The Tenancy Act 1779 reversed this latter position and further confirmed the right of late renewal on payment of compensation. By the end of the 18th century, the Irish House of Lords had been restored, and it fully upheld the principle of renewal.
Leases for lives renewable forever could be (and were in most cases) converted into fee farm grants by the Renewable Leasehold Conversion Act, 1849. This entitled the holder to apply for a grant from the grantor. The fee farm grant was effectively a lease for ever on the terms of the original lease. The Landlord and Tenant Act 1980 converted the all-existing leases for lives renewable for ever into fee farm grants.
Leases for lives could be created in such a way, as to be the equivalent to a fee tail. The Fines and Recovery Act 1834 did not apply. However, the courts by analogy allowed a similar procedure, in order to bar the quasi-entail.
The 2009 land law reforms provide (Section 14) that a lease for lives may no longer be granted at all. Existing fee farm grants, leases for lives and for lives and years are not affected.
A lease for a period of years or for so long as the named person shall live is a leasehold estate. A lease for lives and years is a freehold estate while the lives are in being. It then becomes a leasehold estate for the remainder of the term.
There was a tension between the desire of landowners to keep land in the family and the public policy of allowing land to be saleable. Attempts were commonly made by the current generation to resettle land on terms that restricted their successor from sale, at least without the consent of future generations.
The rules against perpetuities limited the extent to which future interests could be created. The existence of future interests practically guaranteed against the possibility that the current life owners, even together with their immediate successors, could sell the settled property. Attempts were made to avoid these restrictions. Certain legal fictions were used in order to destroy contingent remainder interests. The current owner undertook a conveyance to another on trust for himself or to his own use.
Attempts to undermine future contingent remainders were countered by the device of creating a trust to preserve contingent remainders. Ultimately the Real Property Act 1845 prevent the destruction of contingent remainders.
Land could be restricted for lives of being plus 21 years, effectively until a grandson of the current life tenant and remainderman (the future interest holder; usually his son) attained the age of 21 years. The father would typically have a life estate, his son a remainder interest, which contingent remainders for the next generation contingent on reaching the age of majority.
Under family settlements, there was commonly provision for other family members, by way of pin money or jointure. Pin money provided the wife with an independent income. After the death of her husband, a provision would be made for the widow by way of jointures, being charges on the estate, secured by rent charges. Younger family members might be given lump-sums called portions, raised by the trustees from cash and /or by a mortgage.
Classically, the process was repeated successively. When the grandson reached the age of majority (but had not yet inherited the land), he might in return for an annuity charged on the land, agree to bar the entail thereby producing a fee-simple. There followed a new settlement by which he and his father would take life estates, with a contingent further entail to the grandson’s unborn son. This would tie the land for another generation.
This process, which was common amongst landed families both in England and Ireland, tied up the land. The current owner held a life estate only. It was difficult to raise money as the only security that could be granted, was limited to his life rather than the fee-simple. A more chronic problem was often the accumulation of portions, jointure, rent charges and other debts on the property, charged to meet obligations to various family members.
Over time, some settlements gave increased powers to the life tenants. The tenant for life or trustees might also be given the power to charge land and grant leases. The trustees, or tenants for life with their consent, might be given the power to sell the fee-simple, overreaching the rights of future and contingent owners. The rights of the latter instead attached to the proceeds of the sale.
Private Acts of Parliament and ultimately more general Acts were enacted, in order to allow owners of land settled in this way to give greater control and economic power to the current tenant for life.
In Ireland, much land was sold under the Encumbered Estates Act by a special court established by the act. The court itself undertook the sale, free from encumbrances The various rights interests and other encumbrances, attached to the proceeds of the sale.
The Settled Estates Act 1856, 1857, which was ultimately consolidated in 1877, allowed the tenant for life to sell with the consent of the court. Various other parties’ consents might be required, depending on the circumstances.
Ultimately, the Settled Land Acts 1882 to 1890 were passed in order to provide a general mechanism to make it possible to deal with and sell settled estates. The Acts applied to legal settlements with successive legal interests such as life estates, remainders and future contingent interest.
Settled Land Acts
The Settled Land act and the powers it granted, applied once there were successive legal or beneficial interests in land. It covered the classic life estate, with a remainder (future interest). It also applied to more complex settlements, with all multiple present and future interests, vested or contingent.
The Settled Land Acts applied to interests under trusts, where the land was held on trust for persons successively. It also applied where land was vested in a minor, irrespective of whether there was any “settlement”. The Acts did not apply to other types of trust. They did not apply to fee farm grants or leases for lives renewable for ever in themselves, notwithstanding that in one sense, there was a succession of successive interests. Rights of residence and equivalent rights, ere outside the legislation, as they did not confer an interest in land.
The Settled Land Acts conferred its principal powers on the tenant for life. The tenant for life was defined and was typically the current principal owner/life tenant or the beneficiary for life under a trust. In some cases, the consent of the so-called trustees of the settlement was required for the exercise of the powers. In most cases, the capital proceeds were required to be lodged with them.
The Settled Land Act gave the life tenant the right to sell the land by private treaty or auction at the best price reasonably obtainable. He could not buy the land himself. The life tenant could grant leases up to 35 years and building leases for up to 99 years. He was given the power to create mortgages which were binding on later owners.
In the case of a sale or equivalent transaction, the money received had to be treated as capital money and paid to the trustees. The power of mortgage could be exercised to pay off other encumbrances. Capital money would be spent for the purpose of effecting improvements. This could include the purchase of other lands.
The consent of the trustees of the settlement was required for the sale of the principal mansion house. Alternatively, a court order was acquired. Heirlooms could not be sold, without an order of the court.
The tenant for life was required to have regard to the interests of all parties with an interest in the land. He was deemed a trustee in relation to the exercise of the powers but was not so deemed generally.
The powers under the Acts could not be contracted away. Clauses in settlements which purported to restrict the statutory powers were invalidated. Greater powers could be granted provided they did not conflict with the provisions of the act.
As long as the settled land was sold or value, the courts would not generally question the motive for the sale. A notice was required to the trustees when exercising any of the key powers including that of sale, leasing or mortgaging. If there were no trustees in existence, an application was required to court.
The life tenant had the power to give directions to the trustees in relation to how the capital monies were to be invested. This included reinvestment in substituted assets. This ran contrary to the basic principle that a beneficiary would not generally have the power to direct trustees.
Trustees for Sale
The Act required that there be trustees of the settlement. It set out a number of tests and mechanisms to determine who was deemed trustees of the settlement. Persons specifically so appointed were, of course, trustees of the settlement. However, where none such were appointed or where the settlement pre-dated legislation, other persons were deemed to be trustees of the settlement.
- persons who were appointed trustees with the power of sale or power to consent to an exercise of the power of sale were deemed trustees; these persons were deemed trustees in priority to persons declared to be trustees of the settlement;
- persons who were trustees under the settlement with power or trusts for sale of other lands in the settlement or power to consent to the exercise of such power;
- persons with future trust or power of sale or power to consent to the exercise of such a power.
If there were no persons falling into the above categories, an application to court was required for the appointment of trustees.
The purpose and role of the trustees of the settlement were to protect the interests of the holders of future owners. Upon sale, the capital money had to be paid to two trustees, unless the settlement otherwise permitted. Their consent was required for the sale of the principal mansion. Capital money from a sale or remortgage had to be paid to them. Although rent on leases was payable to the tenant for life, capital sums received were required to be paid to the trustees of the settlement.
The trustees of the settlement could be given additional powers.
On a sale by the tenant for life with the consent of the trustees, the purchaser took title free from all interest created under the settlement. The beneficiaries’ rights attached to the proceeds of the sale. Their right continues to subsist in relation to the purchase monies. They were not deemed converted so were treated as real property.
Trust for Sale
The legislation as originally passed in 1882 applied to trusts of the sale of land. This was particularly surprising and anomalous as a trust for sale was designed to give the trustees a power of sale of the land. The legislation applied to the trust for sale whether there is a trust for persons in succession.
There are no problems of alienability, which was the difficulty which the Acts themselves sought to remedy. The effect of the legislation would have been to give greater control to the tenant for life in place of the trustees for sale who had been specifically appointed by the settlor for such purpose.
The Settled Land Acts were therefore amended, in order to provide that the trustees for sale retained their powers, unless a tenant for life obtained a court order, providing to the contrary. The life tenant enjoyed no powers of leasing or mortgage unless the trust for sale expressly allowed it.