A life estate is a legal arrangement where the owner of a property (the grantor) gives the house, structures and/or land to another person while retaining the right to live and use it while they remain alive. Life estates are a great way for people who are aging, or that have terminal illnesses to gift their property to their heirs while getting to use it, and avoid hassles after they pass.
Best of all, a will may not be needed for the property transfer because of the joint ownership. In addition to having less issues with the transfer after you die, a life estate protects your home from Medicaid estate recovery.
There are both pros and cons with a life estate, but whether or not it is advantageous for you depends on your circumstances.
In many situations, life estates are helpful. However, when things are complicated, a life estate can create problems for everyone involved. Here are the pros and cons to life estates so you can apply the benefits and negatives to why you’re looking into creating one.
Life estates are a good idea when you:
The downsides of a life estate include:
If you are considering creating a life estate, here is how the process works:
Now that you’ve decided a life estate is what you need, there are only three steps you’ll need to follow:
Owning your own home, and being able to pass it onto your loved ones is the American dream. And life estates can help take the stress from any complications after you die, and protect you while you’re living. And when you’re ready to close, we’re ready to be your title company, or do a title search after to make sure everything has been recorded properly.
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