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Posted on November 30, 1999 by Joy Stoyle | Posted under Real Estate
Life Estate - A Good Plan for some
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A life estate is when a property owner enters into a contract with someone else, usually a relative or someone who would normally be a beneficiary upon the property owner's death. In this contract, the property owner agrees to transfer title of the property to someone else, in return for a guarantee that they will be able to reside at the property until their death. For example, a woman owns a home and decides to enter into a life estate contract with her grown son. She titles him the home, but receives a guarantee that she can live in the home until her death. Upon her death, her son retains full use of the property. There is no probate to go through with the property because he already has title. The life estate is often used to make sure that property stays within a certain family line. A mother enters into this type of legal agreement with her grown son. The mother is a widow, and while she is still living on the property as a life tenant, she remarries. When she passes away the property doesn't automatically go to her husband because of the estate agreement. It goes directly to her grown son. He in turn can enter into this agreement with his child, and so on. Many people these days forego the life estate for a living trust. A living trust can offer most of the same things, but can also be changed more easily. It is a matter of preference, and during estate planning it should be discussed between the adults involved and an attorney. Transfer of property after death does not need to be the often complicated procedure that it is, as long as everyone knows their options and sets their priorities ahead of time. About The Author: |
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