The Role Of Life Estates In Clearwater Elder Law Planning

Older adults have many options when it comes to estate planning in Clearwater, but one tool that often sparks questions is the life estate. In Florida, a life estate allows you to maintain ownership rights over your home while setting up a clear plan for what happens after your death.

A life estate can help Pinellas County families avoid probate, protect homes, cut taxes, and plan for Medicaid. Our Clearwater elder law attorney explains how it works and when it makes sense for older adults.

What Is a Life Estate Under Florida Law?

As the name implies, a life estate gives one person, the life tenant, the right to use and live in a particular property for as long as they live, while ensuring another person, or remainderman, automatically inherits it when the life tenant passes away. The Florida Statutes list the rules and procedures for establishing a life estate in Clearwater. Key features include:

• As a life tenant, you have full use of the property during your lifetime but are also responsible for maintaining it.
• Certain situations may require the remainderman’s consent, such as selling or mortgaging the property.
• A life estate may reduce the life tenant’s taxes, as it is often not included as part of their overall estate.
• After the life tenant’s death, the property passes directly to the remainderman without having to go through probate.

Florida also allows for an enhanced life estate, often called a Lady Bird deed, which provides additional flexibility. We discussed more about Lady Bird deeds in Clearwater in a prior post.

When A Life Estate Makes Sense for Older Adults in Clearwater

Life estates can be helpful, but aren’t ideal for every situation. Older adults in Clearwater who are considering putting a life estate in place need to understand the pros and cons. These include:

• Pro: A life estate allows you to remain in your home or other property and can provide tax benefits.
• Con: You are responsible for repairs and may need the remainderman’s approval for certain matters.
• Pro: A life estate can help you qualify for Medicaid, which offsets long-term care costs.
• Con: You could face penalties if the transfer to a life estate happened within Medicaid’s five-year lookback period.
• Pro: Life estates avoid probate directly to the remainderman, potentially saving time and money.
• Con: Life estates are generally irrevocable, meaning once put in place, they can’t be changed.

Considering A Life Estate? Contact Our Experienced Clearwater Estate Planning Attorney

Choosing whether to create a life estate in Clearwater is a major decision. At William Rambaum, P.A., we work with older adults throughout Pinellas County and can explain how it works, potential tax benefits, and possible impacts on taxes, inheritance rights, and Medicaid eligibility.

Board certified and with over 40 years of elder law experience, you can count on us to answer your questions and provide the trusted legal guidance you need before taking such a major step. Call or reach out online today to request a consultation with our Clearwater elder law planning attorney.

Sources:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL

rambaumlaw.com/how-a-lady-bird-deed-may-help-avoid-probate-in-clearwater/