Understanding the Life Estate Deed
A life estate deed is a legal instrument used in estate planning to convey ownership of real property while retaining certain rights for the grantor (the person transferring the property). In a life estate deed, the grantor transfers the property to a grantee (the person receiving the property) but retains the right to live in or use the property for the duration of their lifetime.
Key features of a life estate deed include:
- Life Tenant: The grantor becomes the “life tenant,” which means they have the right to occupy, use, and enjoy the property during their lifetime. This right is called a “life estate interest.”
- Remainder Interest: The grantee becomes the “remainderman” or “remainder beneficiary.” They have a legal claim to the property, but they cannot take possession until the life tenant passes away.
- Duration: The life estate lasts for the lifetime of the life tenant. Once the life tenant dies, the property’s full ownership automatically passes to the remainderman without the need for probate.
- Restrictions on Disposition: The life tenant cannot sell, mortgage, or transfer the property without the consent of the remainderman. However, they can live in the property, lease it, and use it as they see fit during their lifetime.
- Responsibilities: The life tenant is responsible for property taxes, maintenance, and upkeep while occupying the property.
- Cancellation or Revocation: Life estate deeds are usually irrevocable, meaning that once the transfer is made, it cannot be undone without the agreement of both parties.
Life estate deeds can be useful estate planning tools, especially for individuals who want to pass their property to a specific beneficiary without the property going through probate. By using a life estate deed, the property can transfer to the designated remainderman automatically upon the life tenant’s death.
Work with an Experienced Washington Estate Planning Attorney
However, life estate deeds also come with some potential drawbacks and considerations, such as potential capital gains tax implications and the loss of control over the property once the deed is executed. Gregorek & Associates can help you determine if a life estate deed is the right option for your specific circumstances and estate planning goals. Call our office at 425-284-3450 or fill out our contact form and we will be in touch to schedule a meeting.