Life Estate Deeds
A life estate deed splits property ownership: the "life tenant" (usually you) has the right to use the property during life, and "remaindermen" (usually your children) automatically inherit it at your death.
How It Works
You retain the right to live in and use the property for life. You're responsible for taxes, insurance, and maintenance. You cannot sell or mortgage without remaindermen's consent. At your death, property automatically passes to remaindermen without probate.
Advantages
- Avoids probate
- May help with Medicaid planning (subject to 5-year lookback)
- Retains homestead exemption
Disadvantages
- Cannot sell or refinance without remaindermen's consent
- Property subject to remaindermen's creditors and divorces
- Difficult to undo
- May lose capital gains tax benefits
- No incapacity planning