Life estate deeds give an individual the right to enjoy all benefits of ownership of property while they are alive. As soon as the individual dies, the life estate ends, and ownership benefits seamlessly pass onto the remainder person on the estate. This tool is often used in estate planning to make sure a home is effectively transferred to a child.
For example, John wants to pass his home onto John, Jr. He wants to avoid probate and lawsuits in doing this after his death. As such, he passes the home onto John, Jr., today. However, John needs to live in the home for the time being. He establishes a life estate deed. This allows him to live in the home and gain all the benefits, and costs, of home ownership until the day of his death. At that point, John's life estate expires. John, Jr., does not have to inherit the house through an estate. Instead, he is already the named owner of the home, and he can begin receiving ownership benefits immediately.
Can a life estate deed once given be revoked or withdrawn?
Once a contract for a life estate deed has been signed, it is difficult to revoke it. The parties listed in the contract would have to initiate the revocation because they are the lawful owners of the property. Another withdrawal option is to determine the parties were not in a sound legal mind or committed fraud when the contract was signed. This is very difficult to prove. Most cases involve a lengthy lawsuit and very expensive legal costs because life estate deeds are carefully drawn and executed.