STEP 1
INFORMATION FOR DEED
Please provide the information needed to prepare your deed.
STEP 2
PAY ONLINE
We will email you an invoice for $195.
Pay securely online.
No account necessary.
STEP 3
RECEIVE YOUR DEED
Once payment is received, your deed will be emailed to you. Clear instructions on how to sign and record your deed will be included.
STEP 1
INFORMATION FOR DEED
Please provide the information needed to prepare your deed.
STEP 2
PAY ONLINE
We will email you an invoice for $195.
Pay securely online.
No account necessary.
STEP 3
RECEIVE YOUR DEED
Once payment is received, your deed will be emailed to you. Clear instructions on how to sign and record your deed will be included.
WHAT IS A LIFE ESTATE DEED
Simply put, a life estate deed is a transfer of ownership of real property into two separate interests. One of the primary reasons and benefits for doing so might be to avoid probate.
The two interests created by this type of deed are the life estate interest and the remainderman interest. These two interests are the true owners of the property however, they each have separate rights of possession.
Good to know: A life estate is a form of co-ownership. It gives both interests rights to the property but not at the same time.
The two interests of a life estate deed
- The life estate interest. This is the person(s) who will have the exclusive right to possess, live in and enjoy the use of the property during their lifetime. This interest creates a “life tenant”.
- The remainderman interest. Upon life tenant’s death, the property title will automatically pass to the beneficiary who will then have the exclusive right to, and full ownership of, the property. This interest creates a “remainderman”.
A life estate deed is complete when the document is properly signed* and notarized according to the state’s requirements. Some states require witnesses to sign the deed. The document should be recorded in the appropriate county office in order to protect the parties.
*Note: If the deed is not validated legally according to the laws of the state where the property is located, the deed may be considered void.
Some points about Life Estate Property Deeds
- This deed is used to transfer property upon life tenant’s death eliminating the need for probate to do so. It removes the real property from the life tenant’s estate.
- Once a life estate is created, the life tenant usually CANNOT make changes to title of the property without the consent of the remainderman. Both parties must approve of any changes to title of the property unless the deed states differently.
- A life estate creates a form of co-ownership. Both parties hold property title at the same time. However, the life tenant has current possession. The remainderman gains possession when the life tenant dies.
- In many cases, the transfer is not considered a gift and thus is not subject to gift tax.
- Life tenant should maintain the property and pay the taxes and insurance.
- Because the property is not included in probate, title may be cleared quickly. Some states may require a death certificate to be recorded with the register of deeds office in the county where the property is located.
Important: If the remainderman should die before the life tenant, remainderman’s heirs become the remainderman, unless the deed states otherwise.
Some points about life estate property deeds
- This deed is used to transfer property upon life tenant’s death eliminating the need for probate to transfer the property. It removes the property from the life tenant’s estate.
- Once the life estate is created, the life tenant usually CANNOT make changes to title of the property without the consent of the remainderman. Both parties must approve of any changes to title of the property unless the deed states differently.
- A life estate is a form of co-ownership. Both parties hold property title at the same time. The life tenant has current possession. Remainderman gains possession when life tenant dies.
- In many cases, the transfer is not considered a gift and thus is not subject to gift tax.
- Life tenant should maintain the property and pay the taxes and insurance.
- Because the property is not included in probate, title may be cleared quickly. Some states may require a death certificate to be recorded with the register of deeds office in the county where the property is located.
Important: If the remainderman should die before the life tenant, remainderman’s heirs become the remainderman, unless the deed states otherwise.
Life Estates and Medicaid
Generally, if you anticipate that you would like to create a life estate, it is better to do so sooner rather than later. If the life tenant is currently receiving, or planning to qualify for, Medicaid benefits, there are a number of points to consider.
- This property transfer may trigger Medicaid’s 5 year “look back” period for nursing home care. It creates a 5 year waiting period for Medicaid eligibility.
- The property should be protected from the Medicaid recovery program as long as you DO NOT require Medicaid assistance within the 5 year “look back” period.
- If life tenant is in good health and DOES NOT expect to require Medicaid benefits for the next 5 years, a life estate deed may be a good choice.
- If the life tenant expects to require Medicaid benefits in the next 5 years, a life estate deed may not be the appropriate deed to protect real property from Medicaid liens.
Keep in mind: This information is not intended as tax advice. Please consult a CPA or tax advisor for tax questions.
What is needed to create a Life Estate Deed form
- The address or legal description of the property.
- Name of the grantor.
- Name of the grantee.
- A statement of consideration, if any.
- The deed must be signed and notarized according to the state’s requirements.
There are many things to keep in mind when creating a life estate. Using the correct language is vital as this deed cannot be undone by one party alone. If life tenant changes their mind, BOTH parties must agree.
Good to know: Creating a life estate deed is a very important decision. Although this deed is generally a valuable part of a comprehensive estate plan, there may be unforeseen and unwanted consequences.
It is not advisable to use a “do it yourself” fill-in-the-blank life estate deed form. When creating a Life Estate. It is imperative to specific language in order to give you the protection you need when transferring property ownership. An experienced real estate specialist can help you achieve the outcome you intend with this deed.
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