What is a life estate and when might it likely be used?

What is a life estate and when might it likely be used?

A life estate is a form of joint ownership that allows one person to remain in a house until his or her death, when it passes to the other owner. Life estates can be used to avoid probate and to give a house to children without giving up the ability to live in it.

What does it mean to have a life estate deed?

Life Estate Deed A life estate deed permits the property owner to have full use of their property until their death, at which point the ownership of the property is automatically transferred to the beneficiary.

Who is the remainderman on a life estate deed?

A life estate deed is a transfer of the ownership of the real property that is the subject of the deed to one or more persons (the “remainderman”), while retaining ownership of a life estate in the property by the person(s) transferring the property (the “life tenant”).

Can a mom reverse a life estate deed?

No easy reversal. A life estate deed is a legal transfer of title in the property. Mom can’t undo it if she changes her mind, unless Son agrees to transfer it back to her. Property taxes. Mom must continue to pay property taxes on the home during her life, which would not be the case if she gifted or sold the property to Son during her lifetime.

What is a living deed?

A life estate deed is a legal document that changes the ownership of a piece of real property. The person who owns the real property (in this example, Mom) signs a deed that will pass the ownership of the property automatically upon her death to someone else, known as the “remainderman” (in this example, Son).

Life Estate Deed A life estate deed permits the property owner to have full use of their property until their death, at which point the ownership of the property is automatically transferred to the beneficiary.

What happens if the remainderman in a life estate deed passes away?

However, if there is more than one remainderman identified in the life estate deed, what happens next depends on the terms and conditions of their ownership. To understand what happens if the remainderman in a life estate deed passes away, it is important to understand certain terms commonly used in property law.

How to avoid probate of real estate after death?

Life estate deeds are designed to transfer the property at death without losing the ability to use the property during life. As discussed in How to Avoid Probate of Real Estate, a life estate deed is a popular estate planning tool. Life estate deeds are the oldest form of deed for avoiding probate at death and are well-established in most states.

What happens to the property in a life estate?

  The deed includes a provision stating that the parents “retain the right to use and occupy the property during their lifetimes,” a so-called “life estate” in the property. Upon the death of the parents, the life estate ceases to exist and the children own the property free and clear of any lien for long-term care costs.