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Once a life estate has been established, the underlying residence can only be sold if the life estate holder and all other owners agree to the sale. However, prior to any sale, it is important to understand the ramifications for the life estate holders Medicaid eligibility.
A life estate deed is a legal document used in real estate to grant ownership of property to an individual for the duration of their life. When that individual passes away, property ownership automatically transfers to another person or entity of the original owners choosing.
A deed with a reserved life estate is used when you wish to both pass your real property to someone upon your death and also protect the property from nursing-home liens. This document may also make it possible for you to live in and maintain control of the property until your death.
A will is a legal document outlining how someones property is to be distributed after their death. A life estate gives the owner of a property the right to live in or otherwise use the property while alive, after which ownership passes to someone else. Usually, a life estate overrides a will.
If you are a senior citizen or an adult child of an elderly parent, it may be time to talk to an experienced attorney about a life estate plan. A life estate plan allows a senior to transfer legal title and control of real estate while retaining the right to live in the home for the remainder of his or her lifetime.