How to Sell Land With a Life Estate
Key Takeaways
- You can sell land subject to a life estate, but the life tenant and every remainderman must sign the deed to convey full fee simple — according to the Maryland People's Law Library, neither the life tenant nor the remaindermen can sell the property without the cooperation of the other, because they all must sign the deed; a buyer who wants clean, insurable title needs every signature on the page
- When the property is sold during the life tenant's life, the proceeds are split between the life tenant and the remaindermen using IRS actuarial tables — under IRC Section 7520, per the IRS actuarial tables, each interest is assigned a present-value factor driven by the life tenant's age and the applicable interest rate, and the sale price is divided accordingly
- A retained life estate pulls the land back into the life tenant's taxable estate, so the remaindermen get a step-up in basis at death — but selling during life forfeits that step-up — per IRC Section 2036 and IRS Publication 551, the full value is included in the estate (yielding a stepped-up basis at death), whereas a sale before death uses the original carryover basis and can trigger capital gains for both parties
How Do You Sell Land With a Life Estate?
A life estate splits ownership of a parcel across time. One person — the life tenant — has the right to use and possess the land for the duration of a "measuring life" (usually their own). Everyone else named on the deed — the remaindermen — holds a future interest that only becomes possession when the life estate ends, typically at the life tenant's death. According to Cornell Law School's Legal Information Institute, a life estate is a present possessory interest measured by a life, while the remainder is the future interest that follows it. The land can absolutely be sold before that death — but because no single party owns the whole thing, conveying full ownership to a buyer requires the life tenant and all of the remaindermen to join the same deed. This guide walks through who signs, how the money is divided, the enhanced "Lady Bird" variant that changes those rules in a handful of states, and the tax and Medicaid consequences of selling now versus waiting.
If the land came to you through an estate or a trust rather than a life-estate deed, start instead with our guides to selling land held in a trust and how to sell inherited land. For more guides on selling land in complex ownership situations, visit our blog.
What Is a Life Estate, and Who Actually Owns the Land?
A life estate divides one title into two coexisting interests that are both real, present ownership rights — they simply mature at different times.
Present Interest vs. Future Interest
The life tenant holds a present interest: the right to possess, use, live on, farm, or lease the land right now, for as long as the measuring life lasts. According to Cornell Law School's LII, that interest is measured by a life — most often the life tenant's own, though a deed can measure it by someone else's life ("for the life of X").
The remaindermen hold a future interest called the remainder. Per Cornell's LII, a remainder is a future interest that becomes possessory when the prior estate (the life estate) naturally ends. Until then, the remaindermen own something real and transferable — they just cannot take possession or evict the life tenant. When the measuring life ends, the life estate simply extinguishes, and the remaindermen automatically own the full fee simple with nothing more to sign.
How Land Ends Up in a Life Estate
Most life estates on land are created deliberately, usually for estate planning. A common pattern: an aging parent deeds the family land to their children (the remaindermen) but reserves a life estate for themselves, keeping the right to use the land for life while ensuring it passes to the kids without probate. Life estates also appear in wills ("to my spouse for life, then to my children") and in Medicaid planning. The key point for a sale is that a life estate is a form of shared ownership across time — and selling the whole parcel means dealing with everyone who owns a slice of it.
Who Has to Sign the Deed to Sell Land With a Life Estate?
This is the question that trips up most life-estate sales. The short answer: to convey full, insurable fee-simple title to a buyer, the life tenant and every remainderman must sign the deed.
Everyone Must Join the Deed
Because the life tenant owns only the "for life" slice and the remaindermen own the "after death" slice, neither side alone can hand a buyer complete ownership. According to the Maryland People's Law Library, neither the life tenant nor the remaindermen can sell or mortgage the property without the cooperation of the other, since they must all sign the deed. A title company will not insure the transaction unless the signatures add up to the entire fee simple — so a missing remainderman, an unknown remainderman, or a deceased remainderman whose interest has passed to their heirs can stall the closing until the chain is traced and every current owner signs.
Practically, that means before going under contract you should:
- Read the original life-estate deed to identify the exact life tenant and all named remaindermen
- Confirm whether any remainderman has died (if so, their remainder interest may have passed to their own heirs or estate, who must now sign)
- Locate and get commitment from every current owner before accepting an offer, not after
What Each Party Can (and Cannot) Do Alone
A life tenant acting alone can sell or lease only their own life interest — meaning the buyer would own the right to use the land only until the life tenant dies, then lose it to the remaindermen. That is nearly worthless to an ordinary buyer. Likewise, a remainderman can sell only their future interest, which a buyer cannot possess until the life tenant dies. Neither partial interest gives a buyer what they actually want, which is why a normal sale requires everyone together.
If a Remainderman Won't Cooperate
When one remainderman refuses to sign, the sale of the whole parcel stalls — and the options are limited. Importantly, a remainderman generally cannot force a sale either: according to Margolis Bloom & D'Agostino, a holder of a remainder interest may not maintain a partition action, because the life tenant's right to occupy the premises defers the remaindermen's possessory rights. So no one can strong-arm the other through the courts during the life tenancy. That leaves negotiation: buying out the holdout's remainder interest, selling only the cooperating parties' interests to a specialized investor, or waiting. If your situation looks more like co-owners who inherited the land and disagree, our guide on what to do when one heir refuses to sell covers the mechanics of uncooperative co-owners in more depth.
How Are the Sale Proceeds Split Between the Life Tenant and Remaindermen?
When everyone agrees to sell, the next question is how to divide the money. The life tenant and the remaindermen each own a genuine slice of value, and the split is not 50/50 — it is calculated actuarially.
The IRS Section 7520 Valuation Tables
The value of a life estate versus a remainder interest is determined by two inputs: the age of the person whose life is measuring the estate, and an interest rate. According to the IRS actuarial tables published under IRC Section 7520, each interest is assigned a present-value factor. As the IRS explains in Publication 1457, actuarial factors for a life estate and a remainder appear in the columns of Table S, keyed to age and the Section 7520 interest rate (which is set monthly at 120% of the applicable federal mid-term rate). The younger the life tenant, the larger the life-estate share (they are expected to enjoy it longer); the older the life tenant, the larger the remaindermen's share.
The practical effect: if the tables assign, say, a 0.35 factor to the life estate and 0.65 to the remainder for a given age and rate, then 35% of the net sale proceeds go to the life tenant and 65% is divided among the remaindermen. This actuarial split is a valuation-table concept — it allocates a known sale price between the two interests. It is not a discount on what the land is worth, and it does not set the price of the land itself.
Who Reports the Gain
Because the sale happens during the life tenant's life, both sides may owe capital gains tax on their respective shares. According to Iowa State University's Center for Agricultural Law and Taxation, when a life estate property is sold before the life tenant's death, the parties use the property's existing (carryover) basis rather than a stepped-up basis, and the resulting gain is divided between the life tenant and remaindermen according to their actuarial interests. The life tenant may be able to shelter part of their share (for example, a primary-residence exclusion, if the property qualifies — less common for raw land), while remaindermen typically cannot. For the general mechanics of how that gain is taxed once it lands on each person's return, see our guide to capital gains tax when selling land.
Traditional Life Estate vs. Lady Bird Deed vs. Selling a Remainder Interest
Not every "life estate" imposes the same signing rules. A handful of states recognize an enhanced life estate deed — commonly called a Lady Bird deed — that changes who has to sign, and the tax outcomes differ depending on whether you sell now or at death.
The Enhanced Life Estate ("Lady Bird") Deed
In a traditional life estate, the life tenant cannot sell the whole property without the remaindermen joining the deed. A Lady Bird deed flips that. According to DeedClaim's overview of Florida enhanced life estate deeds, the life tenant retains the right to sell, mortgage, lease, or even revoke the deed during their lifetime without the remainder beneficiaries' consent — the remaindermen's interest can be fully divested by the life tenant's own action. Per Medicaid Planning Assistance, enhanced life estate deeds are currently recognized in only a small number of states — Florida, Michigan, Texas, Vermont, and West Virginia. A closely related, more widely available tool is the transfer-on-death (TOD) deed (also called a beneficiary deed), which similarly lets an owner name who inherits the land at death while keeping full control — including the right to sell — during life. If you hold a Lady Bird or TOD deed, you generally can sell on your own signature; if you hold a traditional life-estate deed, you cannot.
Comparison at a Glance
| Structure | Who must sign to sell the whole parcel | Owner's control during life | Basis outcome | Where it's available |
|---|---|---|---|---|
| Traditional (reserved) life estate | Life tenant and all remaindermen | Life tenant cannot sell/mortgage alone | Included in life tenant's estate → step-up at death; carryover basis if sold during life | All states |
| Enhanced life estate (Lady Bird) deed | Life tenant alone (can divest remaindermen) | Full control — sell, mortgage, or revoke without consent | Generally included in estate → step-up at death | FL, MI, TX, VT, WV (per Medicaid Planning Assistance) |
| Transfer-on-death (beneficiary) deed | Owner alone during life | Full control; beneficiary has no present interest | In owner's estate → step-up at death | Many states (varies) |
| Selling only a remainder interest | The remainderman(s) selling their slice | N/A — buyer gets no possession until life tenant dies | Depends on holding period; no step-up | All states |
Because the rules vary so much by state and deed type, confirm exactly which instrument created your life estate before assuming who has to sign.
Should You Sell Now, or Wait?
The single biggest financial trade-off in a life-estate sale is basis — and it turns on timing.
The Step-Up at Death
A retained life estate causes the full value of the land to be included in the life tenant's gross estate at death. According to IRC Section 2036 and its regulation at 26 CFR § 20.2036-1, property the decedent transferred but kept a life interest in is pulled back into the taxable estate. And per IRS Publication 551, property included in a decedent's estate gets its basis stepped up to fair market value as of the date of death. The result: if the remaindermen wait until the life tenant dies and then sell, they take the land with a fresh, stepped-up basis — often wiping out the capital gain on decades of appreciation.
The Cost of Selling During Life
Sell while the life tenant is alive and that step-up disappears. As Iowa State's agricultural law center explains, a sale before death uses the original carryover basis, and the gain is split between life tenant and remaindermen by their actuarial shares — with the remaindermen generally unable to claim any exclusion. So the same parcel can carry a meaningfully different tax bill depending only on whether it sells before or after the life tenant's death. That is a conversation to have with a CPA before signing anything.
Medicaid Estate Recovery
Life estates are frequently created for Medicaid planning, which adds a wrinkle. According to the New York State Bar Association, because the remainder interest passes outside probate at the life tenant's death, it may fall outside a state's Medicaid estate-recovery reach in states that limit recovery to the probate estate — though rules vary and some states pursue expanded recovery, as Medicaid.gov notes states may do. If the life estate was created inside Medicaid's look-back period, the protection can be undone entirely. None of this stops a sale — but selling during life converts protected real estate into cash proceeds, which can change eligibility and recovery exposure. Coordinate with an elder-law attorney before selling if Medicaid is in the picture.
Your Options for Selling Life-Estate Land
Selling a parcel encumbered by a life estate is harder than selling land you own outright — every interested party has to be found, agree, and sign, and the money has to be split. That narrows the pool of buyers willing to take it on.
Option 1: List with a land-specialized agent. A good agent can market the parcel, but life-estate deals scare off many retail buyers and their lenders, who don't want to chase multiple signatures. Expect a longer timeline while all parties coordinate.
Option 2: Buy out or sell individual interests. If one remainderman won't sell, the cooperating owners can sometimes buy out the holdout's remainder interest, or an investor can buy the interests of the willing parties. These are niche transactions that most buyers won't touch.
Option 3: Request a direct cash offer. A cash buyer like Jerez Land is comfortable working through life-estate title, coordinating every required signature with the title company, and closing without the financing contingencies that complicate multi-party deals. We make a parcel-specific, firm written offer on your specific piece of land and absorb the closing and resale risk that comes with a harder-to-convey title. Because a life-estate parcel needs every signature to convey clean title — which narrows who will buy it — having a buyer who handles that complexity directly can be the difference between a stalled listing and a closed sale. Request a no-obligation cash offer and we'll walk through the deed and signature requirements with you.
There are no commissions or listing fees with a direct cash sale, and we can work on a timeline that fits every party's schedule. For the broader document package any land sale needs, see our guide to the paperwork needed to sell land, and if you're wondering where to even start on price, read how much is my land worth. If you're weighing whether to transfer the land to family instead of selling, our guide on how to gift or transfer land to family covers that path.
Frequently Asked Questions
Can I sell land that has a life estate on it?
Yes. Land subject to a life estate can be sold, but to give a buyer full, insurable ownership, both the life tenant and every remainderman must sign the deed. According to the Maryland People's Law Library, neither side can sell the property without the cooperation of the other because they must all sign. The life tenant alone can convey only their "for life" interest, and a remainderman alone can convey only their future interest — neither of which is what a normal buyer wants. Locate and get agreement from every current owner before going under contract.
Who signs the deed when land is held in a life estate?
In a traditional (reserved) life estate, the life tenant and all remaindermen must sign the deed to convey full fee simple. If a remainderman has died, their interest may have passed to their own heirs or estate, who then must sign. The exception is an enhanced life estate (Lady Bird) deed or a transfer-on-death deed: in the states that recognize them, the life tenant or owner can sell on their own signature and divest the remaindermen. Check which type of deed created your life estate to know who must sign.
How are sale proceeds divided between the life tenant and the remaindermen?
The proceeds are split actuarially, not evenly. Under IRC Section 7520, the IRS actuarial tables assign a present-value factor to the life estate and to the remainder based on the life tenant's age and the applicable interest rate. The younger the life tenant, the larger their share; the older they are, the larger the remaindermen's share. The net sale price is then divided in those proportions. This is a valuation-table concept for allocating a known price between the two interests — it does not set what the land is worth.
Does life-estate land get a step-up in basis?
If the property stays in place until the life tenant dies, yes. A retained life estate causes the full value to be included in the life tenant's gross estate under IRC Section 2036, and property included in the estate receives a stepped-up basis to fair market value at death under IRS Publication 551. But if the land is sold during the life tenant's lifetime, that step-up is lost — the sale uses the original carryover basis, and the gain is split between the parties, potentially creating capital gains tax for both. Timing matters; consult a CPA.
What is a Lady Bird deed and how is it different?
A Lady Bird deed — also called an enhanced life estate deed — lets the life tenant keep full control during life, including the right to sell, mortgage, or revoke the deed without the remaindermen's consent, according to DeedClaim. That is the opposite of a traditional life estate, where the remaindermen must join any sale. Per Medicaid Planning Assistance, enhanced life estate deeds are recognized in only a few states — Florida, Michigan, Texas, Vermont, and West Virginia. A transfer-on-death deed offers similar lifetime control in many other states. Which one you have determines whether you can sell on your own signature.
What happens if one remainderman refuses to sell?
The whole-parcel sale stalls, because every remainderman's signature is needed for clean title — but the holdout cannot force a sale either. According to Margolis Bloom & D'Agostino, a remainderman generally cannot bring a partition action while the life tenant is alive, since the life tenant's possessory right defers the remaindermen's rights. That leaves negotiation: buying out the holdout's remainder interest, selling only the willing parties' interests to a specialized investor, or waiting until the life estate ends. Our guide on selling when one heir refuses to sell covers similar co-owner dynamics.
Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or tax advice. Life estate, property, tax, and Medicaid laws vary significantly by state and change over time. Always consult a licensed estate planning or elder-law attorney and a tax professional before making decisions about land held in a life estate. Jerez Land is not responsible for actions taken based on this information.