In this article, we will delve into the importance of creating a life estate as a strategic tool for preserving and managing real estate assets. A life estate offers a unique solution that allows individuals, life tenants, to enjoy the benefits of property ownership during their lifetime while ensuring a smooth transfer of ownership to designated beneficiaries upon their passing. Join us as we explore the advantages and considerations of incorporating a life estate into your comprehensive estate plan, providing you with peace of mind and a legacy that endures.
What is a Life Estate?
While the life tenant is still alive, they’re in control of the property in all respects, except they can’t sell or encumber it without the consent of the remainderman. After the life tenant passes, the remainderman inherits the property and avoids probate. Life estates can simplify the estate planning process, so that a homeowner can easily pass property down to the next generation upon death.
Quicken Loans’ recent article entitled, “What Is A Life Estate And What Property Rights Does It Confer?” says that by understanding the features of a life estate and creating one at the right time, you can enjoy these benefits:
While a life estate can be a helpful tool, it does have several drawbacks:
Because you can’t reverse a life estate without the consent of both the life tenant and remainderman, you should understand each facet of the contract before committing to it. Are you considering a life estate? Book a call with Vick Law, P.C., an experienced estate planning attorney, to guide you through the process today.
Reference: Quicken Loans (August 9, 2022) “What Is A Life Estate And What Property Rights Does It Confer?”