Life Estate Deed Attorney Serving Western PA
For decades, Heritage Elder Law & Estate Planning, LLC has proudly represented clients across Western Pennsylvania as they plan for the future. Some clients opt for a life estate deed to help their loved ones obtain medical assistance either in their home or in a nursing home facility. If you have reached this crossroads, be sure to consult with a legal team you can trust. Contact Heritage Elder Law & Estate Planning, LLC today.
How can a life estate deed help a loved one obtain medical assistance for nursing home care and keep my relative in his or her home?
A life estate deed creates a partial interest for the remainder of your life on the property of somebody else. It is a powerful tool to transfer ownership of property while guaranteeing that your family can’t kick you out of the house. This is a safer alternative to selling or transferring the house to a family member. It also allows the person that is either buying or selling the life estate deed to appropriately and adequately distribute who pays the real estate taxes and utility costs on the property without having issues down the road in achieving benefit eligibility or medical assistance. Life estates can also be used to reduce penalties and transfer property at a reduced value. We commonly refer to a life estate when dealing with these matters.
For example, if an unrelated individual asked to spend the night at a property you own, there is most likely a fee that you would charge to spend that one night in that piece of property (similar to an Airbnb). However, the situation becomes a lot more complicated if the unrelated individual asks to spend the remainder of his or her life in that piece of property. Each property is probably going to have a different value – depending on how big or how small it is – for somebody else to occupy that particular parcel.
When the scenario is split and families are asked, “How much would you charge your parents to stay in your house or how much is it worth for you to buy a house with your parents to remain in that house?” often the answer is zero. However, what we’re trying to highlight here is that there is a number and whether you’re buying or selling a life estate, it comes with pros and cons.
A life estate can reduce the future penalty for medical assistance while freeing up capital for quality of life as the person is able to remain inside his or her own home. It does not matter whether a family member is purchasing the home or mom and dad sell it to a child that might be moving in. Also, a life estate adequately accounts for reducing property values if Medicaid eligibility is being pursued and there are not enough funds available to sell the entire property outright. Life estates have to be in place for at least a year if someone purchases a life estate and then looks to maintain eligibility down the road for their own medical needs.
If the person does not live a year, the funds can be returned and the process starts from scratch. It comes down to controlling assets and having trusted family members. Life estates are a valuable tool in the planning arsenal. They let us figure out how to free up excess resources and or have a sense of security that while you are giving up some interest in your property, you are not giving up all of your interest. Also, even though you love and trust your children, there is a deeded and secured interest that you will not be forcibly removed from your home because you have a piece of paper requiring your ability to remain for the rest of your life.
Contact Heritage Elder Law & Estate Planning, LLC
Ensuring that you have a comprehensive estate plan in place is critical to preparing for the future. If you believe the life estate may be a viable planning tool for you, please contact Heritage Elder Law & Estate Planning, LLC today for a no-cost consultation to learn more.