In this post we will be breaking down two different types of estates that come along with owning real property. Real property (aka real estate) is immovable property that most commonly is land and buildings. These types of estates will all be possessory interests. Possessory interest is the intent and right of a party to own and control a particular plot of land.
The first type of estate, Fee Simple Absolute (aka fee simple estate, fee ownership, is the most common type of ownership on a real property. Not only is it the most common but it is also the highest type of ownership in that in entitles the owner to all right in the land. With this type of ownership, you may do whatever you please with the land. You have the right to sell the house, you have the right to pass along to heirs, and you are even allowed to make changes to the property even if you still owe money on your mortgage. Zoning laws and similar restrictions are the only limitations of this type of estate.
Another type of estate is Life Estate. With this type of estate you are only allowed to use the property during your life time. As the owner of this type of estate, you can not sell, give or leave the property to anyone. These owners of life estates are called “life tenants.” The life estate ends when the life tenant dies. Ownership of the property then either goes back to the previous owner or to the person that was designated to hold the future interest of the property. An example of this type of estate would be you giving your great aunt. She would then have almost of the rights as if it were a fee simple absolute but the difference is that once she would pass away, the property would be returned to you or to your heirs, not your great aunts.