There is one way that heirs can inherit real estate while avoiding the cost and hassle of probate: through the use of an estate planning tool known as a life estate.
A life estate is a deed that allows the real estate owner to remain in his or her home during their lifetime. Upon the owner’s death, the property passes directly to the heir or heirs named in the life estate, who only need to provide the court with a copy of the owner’s death certificate to take ownership.
With a life estate, the parent becomes the “life tenant” of the home, and the children are designated as “remaindermen.” Probate is avoided because ownership of the property transfers by deed to the remaindermen upon creation of the life estate, while the life tenant is still alive.
The life tenant still has responsibility for maintaining the property and making mortgage and property tax payments while still in the home, even though the parent and children are co-owners of the property. The children do not obtain sole ownership of the home until the life tenant dies; however, the ownership interests are still considered assets that could be attached by creditors for unpaid debts or awarded to an ex-spouse in a divorce.
If the life tenant decides to sell the home, he or she must obtain the permission of all remaindermen to do so or the children can return their interest in the home to the life tenant by consent. However, any remainderman can sell their interest in the property without the consent of the other owners.
Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only four Treasure Coast attorneys who is Board Certified by the Florida Bar in Elder Law. Contact us for your free initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.