September 1, 2011
Your home is typically the most valuable asset that you own. Estate-planning and elder-law attorneys are frequently asked how one's home can ultimately be transferred to a client's children without the necessity of probate or exposure to long-term care expenses.
One particularly useful and common document for this is called a deed with life estate. It has many advantages; however, there are some issues that must be discussed and resolved prior to the transfer to ensure that it will be in the best interests of all those involved.
Demystifying the Deed
A deed with a reserved life estate is used when you wish to both pass your real property to someone upon your death and also protect the property from nursing-home liens. This document may also make it possible for you to live in and maintain control of the property until your death.
The individual or individuals reserving the life estate are referred to as life tenants. The individual or individuals that receive a future interest in the property are referred to as remaindermen. The procedure to complete this transaction involves the execution of a deed, which is recorded in the appropriate Registry of Deeds.
The life tenant has certain duties and obligations to fulfill, including responsibility for paying real-estate taxes and homeowner's insurance, and making all repairs and performing all maintenance required to keep the property in good working order.
There are significant potential benefits when utilizing a deed with life estate.
Probate avoidance: Upon the death of the life tenant, the life estate is extinguished. The remaindermen become the...
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by: Todd C. Ratner