[slowandeasy]

Hello

I was asked this question by my neighbor and I have no clue about this so I am throwing it to you guys in hopes of getting an aswer for her. If someone is on a will that says life estate and the owner of that house { house is paid off} wants to get a line of credit to do some remodeling on the house why would the attorneys office call at closing and tell them they needed to have their signature as well when they did not know they were on as a life estate to begin with? This happened to her and she says she does not understand why she would have to sign when she knew nothing about it to begin with?

[ebaines]

It is strange that your neighbor knows nothing of this. A life estate is usually used to pass property upon death without having to go through probate. The owner transfers title to an heir (your neighbor?) but stipulates that he retains a life estate in the property, which means he has use of it only as long as he lives, and at his death ownership passes to the beneficiary. This means the his ownership is temporary, which also means he can not sell the property and also that he cannot pledge the property as collateral. The bank needs the house as collateral for the line of credit to protect their interests. So my guess is that somehow the bank knows that your neighbor is the heir who will inherit the property once the life tenant dies, and for them to grant a loan they want her signature pledging the property as collateral.