{"id":15082,"date":"2020-08-28T12:38:13","date_gmt":"2020-08-28T16:38:13","guid":{"rendered":"https:\/\/martinlawyers.com\/?p=15082"},"modified":"2020-08-17T12:44:55","modified_gmt":"2020-08-17T16:44:55","slug":"what-every-fort-worth-resident-should-know-about-setting-up-a-life-estate-in-tarrant-county","status":"publish","type":"post","link":"https:\/\/martinlawyers.com\/what-every-fort-worth-resident-should-know-about-setting-up-a-life-estate-in-tarrant-county\/","title":{"rendered":"What Every Fort Worth Resident Should Know About Setting Up a Life Estate in Tarrant County"},"content":{"rendered":"<p>Most people are familiar with the term \u201clife estate\u201d as a way to give someone \u201clife rights\u201d to a property. While a life estate does accomplish this goal, choosing to set up a life estate is not a one-size-fits-all solution and may even cause serious consequences for everyone involved.<\/p>\n<p><strong>What is a Life Estate?<\/strong><\/p>\n<p>A life estate is a form of ownership of real property. <strong>The person who holds the<\/strong> <strong>life estate is called the life tenant,<\/strong> and he or she is given rights to occupy the property until death. The other owner(s) are called remaindermen. While the life tenant is alive, the remaindermen retain an ownership interest in the property, but they cannot physically take possession of the property until the life tenant dies. While the life tenant is alive, they have the rights to full use of the property, including the ability to make improvements or even rent the property.<\/p>\n<p><strong>Why Would Someone Consider a Life Estate?<\/strong><\/p>\n<p><strong>\u00a0<\/strong>Senior homeowners often look to life estates as an alternative to transferring the property outright to someone else (usually an adult child) during their lifetime. Many know that if they simply sign over the deed to an heir, he or she becomes full owner of the property and can do with it as he or she wishes. That means if there\u2019s a falling out between dad and his adult son, for example, the adult son could theoretically put him out on the street. A life estate is a way to transfer ownership of the property to a beneficiary, without the senior losing their rights to occupy the house or use it how they want during their lifetime. Likewise, a life estate helps loved ones avoid probate after the death of the life tenant, as the property passes <em>directly<\/em> to the remaindermen. without court involvement.<\/p>\n<p><strong>What Could Go Wrong? <\/strong><\/p>\n<p><strong>\u00a0<\/strong>More often than not, life estates involve additional, unintentional headache. Here are some of the ways that this type of ownership interest can backfire on a senior and his or her heirs:<\/p>\n<ul>\n<li><strong>No major decisions can be made without the approval of the remaindermen.<\/strong> For example, if mom is struggling to pay the bills and wants to access the equity in her house to help get caught up, she won\u2019t be able to take out a line of credit without the approval or her adult son and daughter who have a remainder interest in the property. Maybe the daughter doesn\u2019t agree with mom\u2019s decision to take out a loan and refuses to sign. Mom cannot legally proceed.<\/li>\n<li><strong>Getting a loan can be extremely difficult on a property with a life estate<\/strong>. Using the last example, even if the daughter did finally agree to apply for a home equity line of credit on the property, banks are notoriously difficult about lending money on a home with a life estate.<\/li>\n<li><strong>The life estate could trigger a Medicaid penalty.<\/strong> If dad gets sick and needs to go into a nursing home within five years of creating a life estate, the transfer of the home could cause a penalty period, which delays qualification for Medicaid benefits to pay for care. The penalty depends on the state where the senior will hold the life estate and the timeframe of the transfer. Any penalty period could vary from a few months to a few years. During this time, the senior will likely need to pay out-of-pocket for care costs until benefits kick in. In Texas, a Medicaid applicant can avoid this transfer penalty through an enhanced life estate approved by the regional attorney, provided that the applicant signs a statement saying they intend to return to their home. These complications are why consultation with an attorney is essential prior to considering such a transfer.<\/li>\n<li><strong>The life tenant is exposed to the normal risks of joint ownership.<\/strong> Say an adult son who is the remainderman of mom\u2019s life estate dies suddenly in a car accident. His wife Karen (who has a terrible relationship with mom), may now retain ownership rights in mom\u2019s home, and worse, any decisions mom wants to make now have to be approved by Karen. The passing of a remainder interest to the remainderman\u2019s heirs depends on how the remainder interest is set up in the instrument creating the life estate. The life tenant is also exposed to financial risks of her joint owners in the event they go through a divorce, file bankruptcy, or experience any other creditor situation.<\/li>\n<\/ul>\n<p><strong>A Life Estate is Not a DIY Planning Solution!<\/strong><strong>\u00a0<\/strong><\/p>\n<p>Life estates have the reputation of being quick, easy, and inexpensive estate planning solutions, but they can quickly create complex situations, and very few people understand the drawbacks and long-term risks that may come as a result of this form of ownership. In many cases, there are <em>safer ways<\/em> to accomplish the senior\u2019s goals, and that\u2019s why it\u2019s important to talk to an estate planning lawyer if you are considering the creation of a life estate so that you are empowered to make the best decisions for yourself and your loved ones. If you need help getting started on setting up a life estate in Tarrant County, our attorneys are here to assist you. <a href=\"https:\/\/martinlawyers.com\/contact\/\">Contact us<\/a> at (817) 752-3307 to schedule an appointment.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most people are familiar with the term \u201clife estate\u201d as a way to give someone \u201clife rights\u201d to a property. While a life estate does accomplish this goal, choosing to set up a life estate is not a one-size-fits-all solution and may even cause serious consequences for everyone involved. What is a Life Estate? A&hellip;<\/p>\n","protected":false},"author":6,"featured_media":15083,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3882],"tags":[3884,3911],"_links":{"self":[{"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/posts\/15082"}],"collection":[{"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/comments?post=15082"}],"version-history":[{"count":0,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/posts\/15082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/media\/15083"}],"wp:attachment":[{"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/media?parent=15082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/categories?post=15082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/martinlawyers.com\/wp-json\/wp\/v2\/tags?post=15082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}