estate planning ny
Before it’s Too Late, consider a Life Estate
Before it’s Too Late, consider a Life Estate
During their lifetime, people acquire many assets. These assets often include real property such as houses and land. They also may have a large amount of cash in savings accounts and CD’s, as well as stocks and bonds. If a person becomes ill and cannot provide for him or herself, they may need to be placed in an assisted living program. As often discussed in the news, these programs and facilities are not cheap to say the least and if a person can’t afford them outright, their assets are often used up in no time at all and the remainder of the costs are then subsidized by the government. Something like this could easily be avoided if a person plans ahead.
Once this happens, one of the best ways to avoid giving up rights to one’s assets is to set up a Life Estate in their real property.
A Life Estate is defined as an estate held only for the duration of a specified person’s life. With a Life Estate, the individual has full rights and privileges to the property, as if they owned it outright. They can remain on the property or will have rights thereof to it so long as they live. Once this individual dies, said property will revert to the holder of the remainder interest, such as the property in question. The “holder of the remainder interest” is typically the life tenant’s child, children, or some other trusted family member or friend.
Put in practical terms, the Life Estate allows an individual to keep their property without sacrificing the freedom to be medically cared for in the future.
For example, if somebody has a house or summer home that they want their children to ultimately inherit, the best way to ensure that this happens is to set up a Life Estate, with a reversionary interest going to the named children. Typical language would look like “To Walter for life, remainder to Jim, Judy, and Lisa.” In this scenario, Walter would have all rights and privileges to said property for the duration of his life. Upon his death, the property or “remainder interest” would be then transferred to Jim, Judy and Lisa in equal shares. By having this Life Estate, Walter would be immune to the property being taken from him in terms of equity if needed to pay for medical services an/or assisted living services in the future.
Currently, in New York State, there is a 5-year “look back” period for which a person is subject to. If a property transfer such as this is attempted within this look back period, the “equitable immunity” so to speak will not apply. For this very reason, it is imperative that an individual take advantage of the Life Estate well in advance and not procrastinate until the onset of illness.
As one approaches their “Golden Years,” it is important that they think about protecting the assets they worked all their lives for. Before it’s too late, seriously consider the option of a Life Estate.
About the Author
Martin A. Carbone, Esq. is an attorney practicing out of the Albany, New York area.
Carbone & Carbone LLP, Martin A. Carbone, Esq., Attorney at Law
Ladies pls and guys too?
Ok I am a single mom in army just came off full time now in reserve. I picked up a job in corrections and I am licensed to do real estate. So I have three incomes coming in at moment I am very grateful. I am in Ny but not really happy about living here just want to finish my school get my law degree and leave, I am dating a guy I told him my plans then he got mad and said why did you come here then at all. I wanted to be around family for support because I was always alone with my children. I have two degrees I am divorced and 23 soon to be 24. He says I am too accomplished with no time for anyone. I have always made time for him . I am hurt because I had allot of feelings for him now he wont answer my calls. I dont understand what I am doing wrong but trying to be a good mother and keep a roof over my head.
Ur not doing anything wrong. Obviously he can’t see y ur doing all of this. Ur first obligation is to those kids. U can find a good man who will appreciate the accomplished woman u are and will be. But I think he might feel a bit threatened, and also hurt that u want to move. Maybe he likes NY andd thought ud stay since u have everything, family, three incomes, and him. He probably figures u can practice law where ur at. He just doesn’t see that u want a better life for u and ur kids, and u don’t see NY as a place to provide it.
Since ur staying to finish school anyway, give him a bit of time to come around. If he doesnt come around in a month or two, move on. Then u’ll know that he just wasnt the one, and u can look for someone who would want a woman as driven as u.
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