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What Is A Life Estate?
“What is a life estate?” Usually, it has to do with real property, or when the time period in which you own something is measured by a life. So, therefore, it’s for an indefinite period of time. We usually encounter life estates when you’re dealing with real property, particularly with a homestead. (Under our Florida constitution, homestead means where you reside.) If you die married, then a life estate passes to your spouse with the remainder interest passing to your children.
So, the life estate is measured by the life of the widow, and she gets to use the property during her lifetime. And then, upon her death, the decedents’ children receive the remainder interest, and they’re called remainder men and she’s called a life tenant, and so that is whenever you usually encounter a life estate. The homestead statute has recently changed and now the widow does have an election to take a half-interest instead of a life estate. That is one of the areas where life estates are created-- through our Florida constitutional homestead – when the decedent dies, survived by a spouse and children.
The other time that you see a lot of life-estate deeds is in estate planning or elder law planning. When a person owns real property and they want to see that it passes to any particular individual, (as long as they’re not married) they can deed the property to an individual and reserve a life estate. And that has been expanded upon by what we call Lady Bird Deeds or enhanced life-estate deeds, and this came about as a result of an elder law lawyer preparing these deeds so that they would not disqualify his clients from obtaining Medicaid. So, if you have a regular life-estate deed, it’s a completed gift of you convey the remainder interest.
A Lady Bird Deed, however, says that not only does the life tenant reserve the right to use the property during their lifetime, they also reserve the right to sell the property, transfer the property to anyone they would like and they don’t have to account for the remainder men for any monies that they receive from the sale of it, or if they mortgage the property. The origin of the word “Lady Bird” comes from the author naming the various deeds he had in his publication after famous persons. The Lady Bird Deed is named after Lady Bird Johnson. So, that dates how long it’s been around and the author of the Lady Bird Deed, or the enhanced life-estate deed.
So, a life estate is measured by the life of a particular person and is usually created by someone conveying property to their children and reserving a life estate, or through our constitutional homestead, where the surviving widow receives a life estate and then the balance or the remainder goes to the decedent’s children. So, if you have any other questions or would like a Lady Bird Deed or to do some estate planning to avoid probate, give me a call at 727-847-2288. Thank you.