People often seek advice as to gifting assets while alive or after they pass within their estate plan. For planning purposes as to real property, a Life Estate Deed is an option, and for some may make sense, and for others it may not. The biggest concern as to a Life Estate is the ability to live in the real property if they choose to do so. A Life Estate Deed conveys the right to live in the property as long as they are alive. The other person(s) who own the property subject to the Life Estate are called Remainderman, and that person takes full title to the property once the Life Estate tenant passes. Simply put, the Deed gives the Life Estate tenant control of the property until the time of death. The Life Estate holders may also rent/lease the property as well. The Life Estate may have other limitations as well, as set forth in the Deed, to include: maintain the property; prevent waste; pay taxes & expenses (a.k.a. carrying costs), etc. From an asset and estate planning perspective, a Life Estate Deed may or may not be appropriate (i.e. factors such as estate planning status, nursing home costs, federal and state tax matters, etc.). You should review your Estate Plan and specific facts & circumstances and other aspects of a Life Estate Deed with your trusted advisors to include your attorney/lawyer.
DiMedio Law is a New Jersey law firm whose practice includes Estate Planning, Administration, Business Services & Succession Planning and related Real Estate and other matters. Contact us at [email protected] or call us at 856-428-5577.
DISCLAIMER: This advisory is for general information purposes only. It does not constitute legal advice, and may not be used and relied upon as a substitute for legal advice regarding a specific legal issue or problem. Advice should be obtained from a qualified attorney licensed to practice in the jurisdiction where that advice is sought.