Do you own a property that you don’t want to sell but also don’t want to have to worry about in the future? If so, a life estate might be the right solution for you.
What is a life estate?
A life estate is a type of ownership that allows you to keep your property while someone else receives the benefit of it. The “life” in life estate refers to the lifetime of the person who holds the benefit, known as the life tenant. Once that person dies, the property goes to whoever owns the remainder interest. In other words, a life estate is a way to partially give away your property while still retaining some control over it.
How does a life estate work?
To create a life estate, you (the owner of the property) must convey the property to another person (the life tenant) by deed or will. The deed or will must state that the life tenant has the right to live on or use the property for the rest of their life. Once the life tenant dies, the remainderman (the person who owns the remainder interest) receives the property.
A life estate is not the same thing as a trust. With a life estate, you give up ownership of the property but retain the right to live on or use it for the rest of your life. With a trust, you can retain control over the property even after you die.
Probate is a legal process that can be time-consuming and expensive. A life estate can help avoid probate because the transfer of ownership happens outside of probate. Also, a life estate allows you to give your property to someone while still retaining the right to use it during your lifetime, and this can be helpful if you want to ensure that your property goes to a specific person.