PS 01815.028 Missouri

A. PS 00-461 Eula K~ Warranty Deed; Quitclaim of a Life Estate in Missouri

DATE: March 2, 1999

1. SYLLABUS

This opinion answers the question whether an individual can legally quit claim a life estate interest in a tract of land. The opinion states that Missouri law permits an individual to lease, mortgage, or sell his or her life estate interest to a third party. The opinion further states that, under Missouri law, a quit claim deed is an appropriate vehicle for transferring a life estate. Thus, if the individual quit claims a life estate to a third party, it would not be a resource for SSI purposes.

2. OPINION

The Lebanon, Missouri Field Office has asked for legal advice on whether Ms. Eula K~ can legally convey to her children, Ellis K~ and Louise A~, her life estate interest through a quitclaim deed.

Background

According to the documentation submitted to our office, on September 4, 1964, by General Warranty Deed, Eula K~ conveyed to Ellis K~ and Louise A~, their heirs and assigns, a tract of land located in Laclede County, Missouri, reserving a life interest in herself. An unsigned Quitclaim Deed, which has been prepared for Eula K~'s signature, purports to convey to Ellis K~ and Louise A~ the life estate which Ms. K~ reserved to herself in the September 4, 1964 deed.

Discussion

A life estate is an estate which is not terminable at any fixed or computable period of time and has its duration measured by the life or lives of one or more persons. Cornelius J. M~, Introduction to the Law of Real Property § 9 Life Estates at 43 (2nd ed. 1988). A life tenant possesses only the right to the beneficial use and income from the land. Miller v. Bowen Coal & Mining Co., 40 S.W.2d 485, 489 (K.C. Ct. App. 1931); see Beauchamp v. Beauchamp, 381 S.W.2d 804, 806 (Mo. 1964). A life estate has the quality of alienability and the life tenant can convey his or her estate to a third person, mortgage it, lease it, or sell it for a term of years no greater than the duration of the life estate. Cornelius J. M~, Introduction to the Law of Real Property § 12 Characteristics of a Life Estate at 53 (2nd ed. 1988); see Root v. Mackey, 486 S.W.2d 449, 452 (Mo. 1972) (citations omitted); Beauchamp v. Beauchamp, 381 S.W.2d 804, 806 (Mo. 1964) (citations omitted); Miller v. Bowen Coal & Mining Co., 40 S.W.2d 485, 489 (K.C. Ct. App. 1931) (citations omitted).

Based on the foregoing, Ms. K~ can legally convey her life estate interest to a third party.

Whether Ms. K~ can convey her life estate by way of a quitclaim deed can only be answered by defining the characteristics of a quitclaim deed. A quitclaim deed is a deed of conveyance operating by way of release; that is, intended to pass any title, interest, or claim which the grantor may have in the premises, but not professing that such title is valid, nor containing any warranty or covenants for title. Black's Law Dictionary 651 (abr. 5th ed. 1983). Under Missouri law, a quitclaim deed passes the whole of a grantor's interest in the property. Jamieson v. Jamieson, 912 S.W.2d 602, 605 (Mo. Ct. App. 1995); see Mo. Ann. Stat. §442.460 (1986). For purposes of transferring title, a quitclaim deed is as effective as any other deed. Id. at 605-06 (citing Humphrey v. Sisk, 890 S.W.2d18 (Mo. Ct. App. 1994)).

Because a life estate can be conveyed to a third person, and because a quitclaim deed is as effective as any other deed, it is our opinion that Ms. K~ can legally quitclaim her life estate interest to Ellis K~ and Louise A~. Accordingly, such interest would not be available as a resource to Eula K~ for SSI purposes.

20 C.F.R. §416.1201(a).

B. PS 00-460 J.P. J~ Warranty Deed; Missouri Life Estate as a Resource for SSI Purposes

DATE: March 2, 1999

1. SYLLABUS

This opinion discusses whether conveyance of a tract of land in Missouri created a life estate interest or a remainder interest for the individual who conveyed the land and whether his interest is a resource for SSI purposes. The individual conveyed land to 3 persons as joint tenants in fee simple, and retained a life estate interest for himself. The individual who conveyed the land is not a joint tenant with the other persons. He has a life estate interest only, and does not have a remainder interest. He has a right to use the property and convey his life estate interest to a third party, but he does not have the right to dispose of the property itself. If he uses this property as his home, his life estate interest would not be counted as a resource because the individual's home is excludable. If he does not use this property as his home, the life estate can be considered a resource.

2. OPINION

You have asked for legal advice on issues regarding a Warranty Deed executed on December 6, 1983 by J.P. J~. Specifically you have asked: 1) Does Mr. J~ retain ownership as a joint tenant, along with the other individuals identified in the Warranty Deed?; 2) Does Mr. J~ have a life estate (or remainder) to the property without ownership rights?; 3) Are Virginia M~, Jerry J~, and Zebedee J~ the owners of the property, remaindermen, or both owners and remaindermen?; and 4) Does J.P. J~ retain ownership rights to the property while having a life remainder?

Background

In a Warranty Deed executed on December 6, 1983, J.P. J~ conveyed a tract of land located in New Madrid County, Missouri to himself for life with the remainder in fee simple to go to Virginia M~, Jerry J~ and Zebedee J~, as joint tenants and not as tenants in common.

Discussion

1. With respect to your first question, we conclude that Mr. J~ is not a joint tenant with the other named individuals. As noted above, Mr. J~ conveyed to himself a life estate, and to the other named individuals a fee simple estate. A life estate is an estate which is not terminable at any fixed or computable period of time and has its duration measured by the life or lives of one or more persons. Cornelius J. M~, Introduction to the Law of Real Property § 9 Life Estates at 43 (2nd ed. 1988). On the other hand, a fee simple estate is the largest estate known to the law: it denotes the maximum legal ownership, the greatest aggregate of rights, powers, privileges and immunities which a person may have in land. Id. § 2 The Fee at 26. It is an estate of general inheritance and it is of potentially infinite duration. Id. §3 Modern Law-Creation and Characteristics of a Fee Simple at 31. In order to have a joint tenancy, the following four essential elements must exist: 1) the joint tenants must have one and the same interest (unity of interest); 2) the interests must accrue by one and the same conveyance (unity of title); 3) the interests must commence at one and the same time; and 4) the property must be held by one and the same undivided possession (unity of possession). In the Matter of Mattie L. Robinson v. Western Surety Company, 791 S.W.2d 844, 848 (Mo. Ct. App. 1990). Because the interest in a life estate is by definition, less than the interest in a fee simple estate, it naturally follows that Mr. J~ is not a joint tenant with Virginia M~, Jerry J~, and Zebedee J~, all of whom received an undivided fee simple interest. As such, no further discussion is needed on this issue.

2. With respect to your second question, as noted above, Mr. J~ has a life estate instead of a remainder interest. However, in order to answer your question with respect to Mr. J~ ownership rights, we must examine the characteristics of a life estate. As previously noted, a life estate is an estate which is not terminable at any fixed or computable period of time and has its duration measured by the life or lives of one or more persons. Cornelius J. M~, Introduction to the Law of Real Property § 9 Life Estates (2nd ed. 1988). As between a life tenant and a remainderman, the life tenant alone enjoys the right to possession and enjoyment (to the exclusion of the remainderman). Mathis, et al. v. Melton, et al., 238 S.W. 806, 808 (Mo. 1922); Bryan M. D~, Planning with Life Estates 6 Probate and Property 38 (July/Aug. 1992). A life tenant possesses only the right to the beneficial use and income from the land. Miller v. Bowen Coal & Mining Co., 40 S.W.2d 485, 489 (K.C. Ct. App. 1931); see Beauchamp v. Beauchamp, 381 S.W.2d 804, 806 (Mo. 1964). A life estate has the quality of alienability and the life tenant can convey his or her estate to a third person, mortgage it, lease it, or sell it for a term of years no greater than the duration of the life estate. Cornelius J. M~, Introduction to the Law of Real Property § 12 Characteristics of a Life Estate at 53 (2nd ed. 1988); see Root v. Mackey, 486 S.W.2d 452 (Mo. 1972) (citations omitted); Beauchamp v. Beauchamp, 381 S.W.2d 804, 806 (Mo. 1964) (citations omitted); Miller v. Bowen Coal & Mining Co., 40 S.W.2d 485, 489 (K.C. Ct. App. 1931) (citations omitted).

Nevertheless, the life tenant has a legal duty to preserve the corpus of the estate for the remainderman in the condition in which he or she received it. Muzzy v. Muzzy, 261 S.W.2d 927, 931 (Mo. 1953). According to the foregoing, Mr. J~ has an interest in the property which includes the right to convey his interest to a third party, but he does not have ownership rights which permit him to dispose of the property itself.

3. In response to question number three, Virginia M~, Jerry J~, and Zebedee J~ are both owners and remaindermen. "'A gift or grant of a life estate with remainder to a named person on the death of the life tenant creates a vested remainder on the death of the testator.'" Harlow v. Benning, et al., 207 S.W.2d 471, 473 (Mo. 1948) (citing 33 Am. Jur., Sec. 115, p. 573; Annotation 128 A.L.R. 306). "Or to put it another way, a remainder is vested when it is limited to an ascertained person or persons with no further or other conditions imposed upon the taking effect in possession than the determination of the precedent life estate."

Id. (citing Norman v. Horton, 126 S.W.2d 187 (Mo. 1939)). It is characteristic of a vested remainder that the legal title comes to reside at once in an identifiable person or persons, although his or their possession may be postponed until termination of the preceding estate. Graves v. Hyer, 626 S.W.2d 661, 664 (Mo. Ct. App. 1981). Because the deed limited the remainder to Virginia M~, Jerry J~, and Zebedee J~, all of whom were ascertainable individuals at the time of the grant, they have a vested remainder. Consequently, the remaindermen, and not Mr. J~, are the owners of the property in issue because title to the property vested in them at once even though they are not entitled to possession until the death of J.P. J~.

4. With respect to question number four, Mr. J~ does not have a "life remainder." No such an interest exists. As pointed out above, Mr. J~ merely received a life estate in the property in question and the other three named individuals received a remainder interest in fee simple. The confusion comes because the person drafting the deed left out a comma. The Deed should read as follows: ". . . J.P. J~ for life, remainder in fee simple to Virginia M~, Jerry J~ and Zebedee J~."

In response to your ultimate question of whether Mr. J~ life estate can be considered a resource for purposes of SSI, we are of the opinion that if he uses the property as his home, his life estate interest cannot be counted as a resource. In determining the resources of an individual, the home is excluded. 20 C.F.R. § 416.1210 (a). However, assuming that Mr. J~ does not use the property in question as his home, his life estate interest can be considered as a resource. 20 C.F.R. § 416.1201(a).


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PS 01815.028 - Missouri - 07/24/2008
Batch run: 01/27/2009
Rev:07/24/2008