Friday, February 21, 2014
Consider a “life estate” if you want to spare your heirs from having to go to probate court when they inherit your home.
A life estate will entitle you to remain in your home for the rest of your life while allowing your designated heirs to inherit it without hassle. All they would have to do is present your death certificate at the county courthouse.
A life estate allows the heirs to inherit the property at its “step up” value, thus avoiding taxable capital gains for the most part. A life estate can also protect your heirs from Medicaid liens. The one drawback of a life estate is limited flexibility. You will no longer be able to sell your home or change the heirs without their consent.
See Chris Gay, An Easy Way for Heirs to Inherit Your Home, The Wall Street Journal, Feb. 9, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.