The Trust Lawyers Blog

Asset Protection for the Elderly

Posted by Dave DePinto on Mon, Jun 13, 2016


a. Life Estates


            An estate is used to express the nature, duration or extent of an interest in land. A life estate is an estate which is measured by the life of a specified person, by the joint lives of two or more specified persons, of by the last survivor of two or more specified persons.[1] A right to use and occupy is not a life estate.[2]


Advantages of a Life Estate:

    1. Right to live in house.
    2. Removes remainder interest in the house from Medicaid estate after five (5) years of transfer. 
    3. Medicaid will only count the value of the remainder interest on transfer, which is a significantly lower value than if the whole were transferred. 
    4. Original owner still maintains full control of property and its management also retains Veterans and STAR tax exemptions.
    5. Full value is included in original owner’s estate for tax purposes, but remainderman still receive a full basis step up to fair market value upon death.[3]

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Tags: Estate Law, Medicaid And Assets, Life Estates, Asset Protection, Advanced Elder Law, Elder Law, QTIP, Asset Protection for the Elderly