There are many critical aspects involved in the estate planning process. You have to draft a will and health care directives and proxies. You must appoint a guardian for minor children, draft a financial power of attorney and complete beneficiary designation forms.
Many individuals who come to learn more about the estate planning process, including property transfers, taxation and probate, ultimately look into alternatives to avoid putting their loved ones through the hoops of probate when they pass away. This is often how they come across a life estate deed.
How does a life estate deed work?
A life estate deed entitles a homeowner to go ahead and transfer their property to others before they die. It then allows them to remain in that house until their death.
Homeowners must assign their deed to the remaindermen (beneficiaries) at the time they initiate the deed’s transfer. A homeowner loses their right to mortgage or sell their home once they complete the life estate deed process without first seeking out the approval of the remaindermen or joinders to do so. A joinder is any party to a mortgage or sale.
Why do homeowners pursue the life estate deed process?
Many property owners who pursue the life estate deed process do so to avoid probate. This is an effective approach for doing so unless one of the remainder beneficiaries dies before you (at which point, it may have to go through probate before passing to their heirs).
What is an enhanced life estate deed?
Florida is one of five states that also recognizes the enhanced life estate deed process. This shouldn’t be confused with the standard life estate deed process outlined above.
Just like the standard process, the enhanced life estate allows the homeowner to remain in their home as a life tenant, but they can also sell or mortgage a property up until their death because ownership of the property won’t transfer until their death.
Consulting with an attorney regarding the life estate deed process can help
Homeowners often find it challenging to make sense of their property rights and look once the life estate deed process is said and done. An attorney can answer this and any other questions you might have about this whole process.