Legal Question in Real Estate Law in New Jersey

Life Estate Valuation of Vacation Property

My mother (age 73) owns outright a vacation home that my wife and I spend the summer at with her. My mother is in the house from May to Oct each year. I have helped her maintain the home but the burden of ownership is too much for her now and I would like to buy the home from her. I have two brothers who are in favor of me purchasing the home and her will divides her estate between us three. I have gotten the home professionally appraised. She would like to continue to spend summers (May to Oct) in the home and we will continue to be there June and July. I want to give her a life right to the house. What value would be placed on her life right and therefore deducted from the purchase price when I buy it? THANKS


Asked on 8/17/03, 8:56 am

1 Answer from Attorneys
Benjamin Laves Benjamin S. Laves, Esq.

Re: Life Estate Valuation of Vacation Property

If you purchase the home from your mother as you describe you will be buying what is called a remainder interest since your mother will be retaining what is called a life estate. A current appraisal is required. This will be used to determine the values of the remainder interest and the life estate. The IRS publishes materials that we use to allocate the appraissed value between the two interests. This is a more complex transaction and must be reduced to writing and properly documented and recorded. If you wish to proceed, please give me a call at 973-731-5110

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Answered on 8/18/03, 11:10 am


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