Retaining a Life Estate in Your Home
Part of any estate planning process in Canton or elsewhere in Connecticut involves working with an attorney to consider who will inherit your assets after you die, and how those individuals or entities will inherit your assets. In addition, for many people, estate planning involves discussions with a Connecticut estate planning lawyer about protecting assets and having enough money to pay for what you will need in your retirement years, including the potential for long-term care. For Connecticut residents who are getting older and are looking for a way to leave their home to an adult child or loved one upon their death, or seeking a way to have extra money during their retirement years, it is important to discuss the option of a life estate with your estate planning lawyer.
What is a life estate and how does it benefit you? Our Connecticut estate planning lawyer can explain more about life estates, and we can speak with you today if you want to consider this option as part of your estate planning.
What is a Life Estate?
A “life estate” is a term that refers to “an interest in real property with a duration measured by the life of a person or group of people,” according to the Connecticut Office of Legislative Research (OLR). Then, “when that person or people die, the life estate is extinguished and the property automatically goes to the person or people who have a remainder interest in the property.”
To sum this up in terms that are a bit simpler, if you own your home, you can transfer or sell the ownership of your home to another party but keep a “life estate,” which means the party to whom the home is transferred or sold will have a “remainder interest.” With the life estate, you remain the owner of the property during your lifetime and can generally use the property however you wish, much as you could prior to the creation of the life estate. Then, when you die, the person to whom the property was transferred or sold will become the owner.
How Can You Retain a Life Estate in Your Home?
Life estates are a way for a homeowner to ensure that a particular loved one becomes the owner of their property upon their death, or for a homeowner to obtain some additional funding. While many life estates are created by transferring the ownership of the home to a loved one in a way that allows them to avoid probate, life estates are also commonly created through a sale. In the latter situation, the person creating the life estate can get money from the sale while still living in their home.
How the creation of a life estate works can depend on whether you are planning to give and transfer the property to a loved one, or planning to sell the property. You may be able to “accomplish the transfer through a deed,” according to the OLR, but additional or different documentation may be necessary.
Contact a Canton Estate Planning Attorney
Whether you have questions about creating a life estate by selling or transferring ownership of your home, or you have other questions about asset protection and estate planning in Connecticut, our firm can help. An experienced Canton estate planning lawyer at the Law Office of Brian S. Karpe can speak with you today about your circumstances, and we can help you to determine which estate planning tools are best suited to your needs. Contact us today for more information and to begin working on your estate plan.
Source:
cga.ct.gov/2013/rpt/2013-R-0312.htm#:~:text=Under%20Connecticut%20law%2C%20a%20person,in%20the%20property%20until%20death
