Q: I live in a condo in a 55+ community and want to help my children avoid probate when I eventually pass away. What should I do? _ Sheryle
A: This is a question asked of me many years ago by my most loyal reader, my mother. I answered her question in person at the time and will now share that answer with you because my mother passed away this week, and her foresight with this question, and the action we took, will spare us the expense and hassle of having to probate her home.
Kindly remember that everyone’s situation is unique, and a newspaper column is not a substitute for the advice of an estate planning attorney.
There are three good choices depending on your situation. The first choice is a Life Estate Deed, where property owners retain ownership of the home for their lifetimes, and when they die, the home passes to their initial choice of recipients without any further action being required. Simply, once the “life-tenant” passes away, the chosen person (or people), known as the “remainderman,” automatically becomes the owner. The downside to this choice is that the chosen remaindermen are “vested,” meaning their interest in the property is locked in. The property owner cannot later change his or her mind, sell or even mortgage the property without the remainderman’s consent.
To fix this problem, an Enhanced Life Estate Deed was developed. This type of deed became known as a “Lady Bird Deed” following an article years ago illustrating its uses by a prominent Florida attorney. The name stuck, as did the document because of its usefulness. This type of ownership is very similar to a standard life estate, but the remainderman’s interest in the property is not vested, meaning the homeowner can freely change his or her mind about who takes the property afterward, and can sell or mortgage the property without anyone’s consent. This flexibility can also be a downside, since some seniors are susceptible to influence and may be coerced into making changes that are not in their best interest.
The final choice is to set up a living trust. This choice provides the most flexibility and is best for people with more assets to plan for. While trusts are almost all upside, the negative is they are significantly more expensive and complicated to set up than either type of life estate deed.
ABOUT THE WRITER
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.
This article provided by NewsEdge.