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value of life estate - selling home

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  • value of life estate - selling home

    my uncle was given a life estate in my aunt's home in her will, meaning he could live there until he died. however, me and my cousins, heirs to the home, now want to sell it (uncle agrees its OK) and we want to compensate him fairly. the house will be sold for $ 375,000. my uncle is 80 yrs old, and in fair health. what percentage of the sale would be fair to give him? or how in the world can i find this info out?

  • #2
    Life Estate Valuation question?

    Originally posted by caycefan View Post
    my uncle was given a life estate in my aunt's home in her will, meaning he could live there until he died. however, me and my cousins, heirs to the home, now want to sell it (uncle agrees its OK) and we want to compensate him fairly. the house will be sold for $ 375,000. my uncle is 80 yrs old, and in fair health. what percentage of the sale would be fair to give him? or how in the world can i find this info out?
    I have a similar valuation problem. Did you ever get an answer as to how to establish a value for your uncle's life estate? If so where can I find the information.

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    • #3
      decide what you would feel was a fair amount if you were in his shoes. double that. die happy sorry I know it isn't a real answer--I just couldn't help myself!

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      • #4
        I have a simple idea. Your uncle has the right to live in the house until he dies. Then he should have a similar house to live in after you sell out the house. How much should you compensate him fairly? It should be enough for your uncle to rent a similar house to live in.

        According to this idea, you should estimate the house renting costs for your uncle, taking into consideration the inflation in the future, the future interest rates, the population health improvement, etc. The renting costs can be a fair compasation for your uncle, I think.

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