Parent buys a life estate in child’s property.This is one strategy to assist in doing this. Note that often partners who do not remarry have the goal of assuring their children do not lose their ability to inherit eventually. This person can, in her will, direct that a life estate be inherited by her partner and a remainder interest to her children. She wants her partner, however, to have a life interest in the property and then, on his passing, to have the property go directly to her children. One of them owns the property outright and wants it to be inherited eventually by her children. Two individuals live together with no intent to marry.All of these methods can assist in giving a priority interest against other creditors including potential protection regarding Medicaid estate recovery and, in some cases, Medicaid planning provided there is fair consideration. Our office also drafts private reverse mortgages which allow the adult child to have a recorded interest in the property which would be satisfied on sale. He could purchase a joint interest in the house either as tenant in common or joint tenant with right of survivorship. Note there are other ways to accomplish this objective as well. On his parent’s death he has a direct interest as remainderman and the house passes to the child. Sometimes an adult child with substantial income will assist his parent financially to remain in the home but wants to know that, on his parent’s passing he can recover his investment on the sale of the house. Adult child has been paying parent’s bills when his parent has insufficient income.Note, however, if a current or anticipated mortgage is or could become involved you should inform yourself with the lender and informed legal counsel whether this would work in your case. Here are some circumstances where life estate/remainderman arrangements might work in the individual case. Also, this move should not be done without legal consultation and advice. Note it is important to establish the rights and duties of each party in the life estate so there is no confusion regarding who is responsible for what aspects of the relationship such as taxes, repairs and so on. The person residing in the property is referred to as the “life tenant.” Those who inherit the interest are known as the “remainderman” or “remaindermen.” The property passes directly on death of the life tenant to the remaindermen. Like any other estate planning tool, it needs to be considered in light of the objectives of the parties involved.Ī life estate is a form of joint ownership that allows one person to remain in the house until his or her death at which time it passes to the other owner or owners. Life estates have received some attention recently as a way to resolve partial ownership of a property.
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