Texas property owners must determine how to pass their real estate to a loved one. Many people transfer real estate through a will, but others may need another option. A life estate can make it possible to give up ownership of a home but choose who remains for as long as they desire.
What Life Estates Provide
Life estates enable people to give their home to an heir without the time or cost of probate. The process can allow people to qualify for programs like Medicaid while they remain in control and live in the home they love. The person receiving the life estate, known as a life tenant, can improve the property or leave if they wish, but they cannot sell the house or use it to borrow money.
Who The Arrangement Helps
Life estates reassure heirs that the property will eventually become their own. The process can save the beneficiaries on taxes and reduce the wait associated with probate hearings. The new owner, or the person who becomes the remainderman according to the life estate, can instantly do whatever they would like with the home once the life tenant leaves.
What People Should Know
The inability to cancel the agreement can become a problem and needs consideration before choosing a life estate. The original owner, now the life tenant, cannot sell or borrow against the property but is responsible for maintaining it while living there. Someone on a fixed income may struggle without assets if they need to borrow money. The original owner cannot change the beneficiary if conflicts arise between them and the remainderman.
Life estates can work in many situations. It can enable remarried spouses to have a home after they die with the reassurance that their children, not stepchildren or others, will inherit the property. It can apply in numerous ways whenever someone wants to protect a loved one. The process has many benefits but is not the best option for every situation.