Planning for Life

A Peril of Life Estates, and Three Solutions

Posted by Harry S. Margolis on November 2, 2020

By Harry S. Margolis

life-estates-deed-remainder-interest-Wellesley-MA-02481

We were recently contacted by a new client who had apparently forgotten that about 10 years earlier, she executed a life estate deed transferring the remainder interest in her house to two of her daughters. Unfortunately, one of them has since passed away and she is estranged from the other.

She now wants to sell the property, but can't without the cooperation of the estranged daughter and of the estate of the deceased daughter. They are also both entitled to a share of the sale proceeds. She contacted us to see what she could do about the situation.

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Topics: life estate, power of appointment

1989 MassHealth Plan Works Like a Charm in 2020!

Posted by Harry S. Margolis on October 24, 2020

By Harry S. Margolis

Masshealth-estate-recovery-plan-1989-estate-planning-lawyer-Wellesley-MA-02481

Here's a note I recently received from one of the other attorneys in our office:

Was just on the phone with a client who worked with you in 1989. He came back in when his Dad died in 2005 and again now that that his Mom has died at age 102. His Mom had been in a nursing home covered by MassHealth. The house was protected with a life estate deed and $200,000 in savings was protected in an irrevocable trust. Nothing is going through probate and everything will receive a step-up in basis. Thought you would like to know you did a great job in 1989 and despite all of the changes in the law, it still worked. (Also I was in 4th grade then, just saying, the firm does have longevity.)

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Topics: long-term care planning, MassHealth lien, life estate

Remaindermen Cannot Force Sale of Property in Life Estate

Posted by Harry S. Margolis on August 5, 2020

By Harry S. Margolis

remaindermen-life-estate-Wellesley-MA-02481

Owners of real estate sometimes transfer such property to their children while retaining the right to live in the property for the rest of their lives. Such ownership interests are referred to as "life estates" and give the life estate owners the exclusive right to occupy and even rent out the property during their lives. The children, in this case, are referred to as "remaindermen" and they have a real interest in the property, just no right of possession until the life estate owner dies.

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Topics: MassHealth planning, life estate

How Does MassHealth Calculate Life Estates?

Posted by Harry S. Margolis on November 12, 2019

By Harry S. Margolis

life-estates-margolis-and-bloom-masshealth-remaindermen

Life estates have long been a prime long-term care planning device for protecting the home from MassHealth estate recovery because they're quite simple to create. MassHealth recently changed its rules in terms of how it measures life estates when they are created or when property held in a life estate is sold.

What is a Life Estate?

A life estate is a form of joint ownership of real estate where ownership interests are divided by time. The so-called "life tenant" has the right to occupy the property during his or her life and to collect any rental income earned from the property. The life tenant also has the obligation of maintaining the property.

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Topics: MassHealth planning, MassHealth, life estate

Life Estate Owners: Beware Solvency of Remaindermen - Massachusetts

Posted by Harry S. Margolis on April 2, 2013

Life-Estate-Remaindermen-Wellesley-Estate-Planning-Attorney

By Harry S. Margolis


In Gordon v. Pappalardo (BAP No. MW 12-60, March 13, 2013), the U.S. Bankruptcy Panel for the First Circuit confirmed a Bankruptcy Court decision that holders of a remainder interest in real estate in Massachusetts do not qualify for homestead protection.

Life Estates

A life estate is a common form of real estate ownership often used for estate and long-term care planning purposes. Typically, parents will execute a deed reserving a life estate and granting a remainder interest to their children. As a result, both the parents and the children own an interest in the real estate, but the parents have the full right of possession during their lives. This means that only the parents have the legal right to live in the property; they would receive the income if the property were rented out; and they are responsible for its upkeep and maintenance. At the parents' death, the property passes automatically to their children, who are called the "remaindermen."

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Topics: long-term care planning, asset protection, Estate Planning, life estate

What is a Life Estate and Why Would You Want One? - Massachusetts

Posted by Harry S. Margolis on April 9, 2012

By Harry S. Margolis

Life-Estate-Wellesley-Attorney-Remaindermen-Tax-Planning

What is a life estate?

            The term “life estate” refers to property that is owned by an individual only through the duration of his or her lifetime. Therefore, it’s always for an indefinite period of time.  We usually encounter life estates when dealing with real estate. When you have a life estate, you are called the “life tenant.” For example, you can sell or give your home to your children, but retain a “life estate,” thereby reserving the right to live in, use, rent out, and control the home until you die. In this instance, your children would be called the “remaindermen.”   Even though they don't have the legal right to enter the property, they do have an ownership interest in it, which they can transfer or sell (assuming they can find a buyer).

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Topics: long-term care planning, Estate Planning, life estate

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