In short, yes. A will (or testamentary trust) may create a life estate in property without the magic words “for life” in a bequest a beneficiary.
In the case of Freeney v. Freeney, No. 170031 (Va. Apr. 12, 2018), the Virginia Supreme Court determined that a will’s residuary clause granted the testator’s wife a life estate by implication and not with any magic words. There, the testator made a will, which gave the residue of his estate to his second wife, Marjorie. That clause read, “It is my intention that she use the assets of my estate to provide for her health and support, and to continue providing for the health, support and education of my son SEAN [sic] while he is a minor, and in matters past the age of eighteen (18) at her discretion; and that upon her death any remaining assets of this estate pass to him, IN TRUST, per stirpes.” The will further limited the use of the residuary from being used for the benefit of three other family members. Some of those beneficiaries sued, arguing that this clause created a life estate in which they would share after Marjorie’s death. Both they and Marjorie agreed that the language was unambiguous, the meaning of which could be determined by a judge.
The circuit court held that the language did not create a life estate. The Virginia Supreme Court disagreed and reversed. Although a will is generally construed to pass the greatest estate which the language employed is capable of conveying, indicia of a contrary intent (such as restrictions on a beneficiary’s use of the estate and plans for its use after a first beneficiary dies), can manifest an intention to create a life estate by implication. Edwards v. Bradley, 227 Va. 224, 229, 315 S.E.2d 196, 199 (1984). On these facts, the Court found that “the residuary clause in this case places limitations on Marjorie’s use of the property during her life.” Freeney at 7. It concluded on this issue by holding that these “limitations on Marjorie’s ability to use the estate … demonstrates that the residuary clause grants Marjorie a life estate by implication in the residual property....” Id at 8.
In summary, a will or trust whose terms impair a primary beneficiary’s ability to use and dispose of the estate can demonstrate an intent to create a life estate without adding the magic words “for life” as qualifiers to a bequest.
The EFM Lawyer.