When assisting clients with estate planning, we are sometimes asked, “What is a Life Estate?” Simply stated, a life estate is created when property is granted to a person for their life as part of a will. Hence the term “life” estate.
What is a will?
A will is a legal document that ensures your assets and belongings are distributed according to your wishes after your death, you must have a will in place. If you have children or pets, you may also name a guardian for them in your will. Having a will prevents your family from having to go through court to have your assets distributed.
Who might have a life estate?
Anyone who owns property can have a life estate. Common examples include:
• A parent chooses to transfer ownership of their home to their children, reserving the right to live in the home for the rest of their life.
• A husband leaves the home to his wife in the event of his death before hers (or vice versa). Upon her death the home is transferred to the children.
• A husband leaves the home to his wife in the event of his death before hers (or vice versa). Upon her remarriage the home is transferred to his children. This is the case when the marriage is a second marriage and the children are from the first marriage.
• A husband leaves the home to his wife in the event of his death before hers (or vice versa). Upon her death the home is transferred to a non-profit organization such as a church.
Essentially a Life Estate means you name someone to live in your home for their lifetime or until a particular circumstance such as remarriage occurs.
For more information about Life Estates, Estate Planning, and other family law matters, contact the team at Stuart and Blackwell.