Understanding Life Estates

In this Elder Law Minute, Wes Coulson lists examples of how life estates can be beneficial for you in your estate plan.
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"Your Trusted Advisor on the Elder Care Journey"
Dent Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer's Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older.
At Dent Coulson Elder Law, our clients' well-being is our number one priority. For immediate help, call [phone], [phone], or [phone].
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Video Transcript:
Greetings, I'm Wes Coulson from Dent Coulson Elder Law, and this will be your elder law minute. We're happy to present these because we think we can help inform you as to the ways in which we can help you and the things that you need to think about relative to the elder care and estate planning journey. Hope you enjoy.
I want to talk to you today about one of my very favorite Medicaid eligibility planning tools, and that is a life estate. I guess the first thing we should talk about is what the heck is a life estate? Well, it is an ownership interest in real estate that ends by its terms when you die. When you sign a Life Estate Deed, there aren't any changing your mind later; it's a done deal. So here's what's so powerful about that.
First, under the Medicaid eligibility rules, a life estate interest in property is an exempt asset. So this can be particularly great, for instance, for farm clients who can reserve that life estate interest in farm real estate and still get a step-up in basis in the property when they die. And also, a big thing because life estate interests have very substantial value. It would surprise you how much. If you are giving away the remainder interest in property and reserving a life estate, the amount of the gift transfer that you've made for Medicaid purposes is much smaller than it would be if you gave the entire property interest away. Those are just a couple of examples of how we can use life estates. It may be foreign to you, but it's very familiar to us and something that can be used for your very substantial benefit.
So if you own real estate and you might need nursing home care later, or you're listening to this on behalf of somebody who might, give us a call and see if that's something that we can help you with. Thanks.

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How does this affect the death of an owner and change of property with a warranty deed as well as the deceased exemptions. Does the new owner have to resubmit exemptions with property tax, when the new owner is a child not a spouse?