The Law Office of Paul Kolesnikovas has extensive experience in all aspects of real estate law. We can guide you through all forms of real estate transactions; including sales, purchases, refinancing, commercial sales and leases, zoning and transfers to trusts.

We assist in the sale or purchase of real estate beginning with the offer to purchase or presale buying consultation through the Purchase and Sale Agreement to closing.

 

LIFE ESTATE DEED

Protecting your home from nursing home costs

 

Protecting a home or other real estate from nursing home costs is often a family priority. A common technique for protecting the home is a deed reserving a life estate.

This is a deed in which you transfer your home, or other real estate to the persons whom you would pass the property to at your death, not including a spouse who would also have life estate rights. These new individuals on the deed are called remainder owners. You and your spouse if living are life owners. The life owners reserve the right to live in, occupy and have the total benefits of the home while living. The life owners have the responsibility for real estate taxes and maintenance costs. Therefore the life owner retains all tax abatements as if sole owner.

 

LIMITATIONS:

 

            Must deed into the life estate at least five years prior to applying for nursing home assistance through Mass- long term care- Medicaid.

 

After signing a deed reserving a life estate, you will have given an actual interest in the property to the remainder owners. Therefore, Should you ever wish to refinance or sell the property, all listed owners, life and remainder must sign the necessary paperwork.

 

If you are in a nursing home and not met the look back period of five years Medicaid may put a lien on the property. If the 5 year period has been met, this lien must be released upon the death of the life owner, leaving 100% to the remainder owners. However, if the property is sold while you are in a nursing home, even if the five year period has been met, some proceeds may vest in the life owner and be subject to the lien. The key is not to sell the property while the life owner is still living.

 

Benefits:

 

            After five years protects property from nursing home costs.

 

When the life owners pass, the property will pass to the remainder owners without the need for Probate.

 

The remainder owners receive a stepped up basis at death, therefore capital gains are avoided.

 

When determining whether a Life Estate Deed is right for you, consult with an knowledgeable attorney so that you understand your options.