The Life Estate Deed – One Option for Protecting Your Home
September 1, 2009
Gina M. Barry, Esq.
After spending many years raising a family in the family home, the home is commonly the family’s largest and most cherished asset. As such, protecting the home from nursing home costs is often on the forefront of the family’s concerns. Fortunately, it is possible to avoid the need for a sale of the family home upon a nursing home admission, especially when planning begins early.
When there is no nursing home admission in sight, a very common technique for protecting the home is a deed reserving a life estate. This is a deed in which you transfer your home (or other real estate) to the persons whom you want to have it after you pass away (remaindermen), but reserve unto yourself the right to live in, occupy and have the benefit of your home until you pass away. Typically, the remaindermen are your children. The life estate is held by you (life tenant) and carries with it the responsibility of paying the ongoing expenses of the home, such as taxes and maintenance costs. The life estate interest guarantees the life tenant the right to exclusive possession of the property, even to the extent of being able to exclude the remaindermen during the life tenant’s lifetime. This exclusivity also allows the life tenant to retain any tax abatements that are available to the life tenant.
After signing a deed reserving a life estate, you will have given an actual interest in the property to the remaindermen. Thereafter, should you ever wish to sell or mortgage the property, ...
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by: Gina M. Barry
Prime
September 2009
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