REAL (estate) TALK: Can an Individual Holding a Life Estate Claim a Homestead Exemption?
Conversations regarding homesteads and claiming a Homestead Exemption are popular conversations around the closing table. “Are we eligible for a homestead exemption?” “When and how can we apply for a homestead exemption?” These are all very frequently asked questions. Yet, every once in a while, we get a question about Homestead Exemptions that isn’t as common such as, “Can an individual with a life estate claim a Homestead Exemption? Short answer – Yes! Long answer – KEEP READING.
The general rule regarding interests sufficient to maintain a homestead exemption is that a claimant must have at least a possessory interest in the land coupled with a present right of occupancy. This rule is established by a long line of Texas case precedent.
Does an individual holding a life estate interest in a property meet this criterion? In order to answer this question, we must first establish what a life estate interest is. A life estate is an interest in real property which may last during the life or lives of one or more persons in being. Generally, a life estate is created by instrument, such as a deed or will, where the language of the instrument manifests an intention on the part of the grantor or testator to pass to a grantee or devisee a right to possess, use, or enjoy property during the period of her life. Thus, for example, a devise of the possession, use, rent, or revenue of property during a life in being creates a life estate.
Now, let’s analyze whether this meets the criteria set out by Texas case precedent – does the definition of a life estate interest stated above show: (1) a possessory interest; and (2) a present right of occupancy? We argue yes, and Texas Courts agree. Because a life tenant has the right to possess, use, rent, or revenue from the property, an individual with a life estate may and should claim a Homestead Exemption – if he occupies the property as his primary residence, of course!
Title Tip: If you purchased and currently own a home, which is your primary residence as of January 1, you can apply for a Homestead Exemption. You can apply as early as January 1 and no later than April 30. If you qualify for a homestead exemption, visit your local County Appraisal District website and download the form. If you are a resident of Harris County, visit www.hcad.org to download the Homestead Exemption form. If you have any questions concerning Homestead Exemptions please don’t hesitate to contact us at firstname.lastname@example.org or (713) 227-7500.