A life Estate Deed is simply the transfer of the ownership of real property that is the subject of the Deed to one or more persons commonly known as the “remainderman”, while retaining ownership of a life estate in the property by the person transferring the property. The person transferring the property is the “life tenant” and simply means that the “life tenant” still owns the property until that person passes away.
One of the most common questions is if I prepare a life estate deed, do I get to keep my exceptions with the tax appraisal office? The answer is yes if in fact you already qualify for those exemptions. The house in essence is your property until you pass away. You simply get to retain a “life estate” meaning that the home is yours to live in until you pass and usually if this is something you are drafting then you have taken the steps in contacting an Attorney to assist you with your estate planning.
This brings us to our next question of what does a life estate mean in Texas exactly? In common law and statutory law, a life estate is the ownership of land for the duration of a person’s life. In legal terms, it is an estate in real property that ends at death when ownership of the property may revert to the original owner, or it may pass to another person depending upon how you executed your life estate deed.
The life estate deed is commonly confused for an enhanced life estate deed and again, without the direction and advice of an attorney, like an estate planning lawyer Arlington TX trusts, you could execute the wrong type of deed. The enhanced life estate deed is a special type of deed recognized by common law in only three states. The three states that allow enhanced life estate deeds or also known as “Lady Bird” deeds are Florida, Michigan and Texas. This deed can be used to transfer ownership of real property outside of probate to a beneficiary named within the deed.
These are common documents that are drafted on behalf of preplanning for your estate in the event that you have a small estate. When these documents are drafted properly they in fact can assist you without having the need to probate your estate. However, there are additional planning tools that coincide with the drafting of this document and you must ensure that you have divulged all your estate information to your Attorney when drafting these documents. It is very common that without the advice of an attorney, there is an asset that is not disclosed and in essence your heirs will still have to probate your estate for an error such as a vehicle needing to transfer ownership.
Contact an estate planning lawyer today for more information.
Thanks to our friends and contributors from Brandy Austin Law Firm, PLLC for their insight into life estate deeds.