Should You Consider a Life Estate for Your Home?

Should You Consider a Life Estate for Your Home?

Your home is often one of the most valuable items of property that you will ever own. When it comes to ensuring that your home passes to the individual or group that you intend, there are a variety of ways to legally make that happen. The life estate is a less commonly used method.

What is a life estate?

A life estate, sometimes called a right of occupancy, is a property law concept that allows a property owner to split their interest in real estate and other types of property into different types of ownership that can exist simultaneously. For example, the owner of a cabin could legally split their ownership interest in the cabin, allowing them to possess and enjoy the cabin for the remainder of their life and then, at death, automatically pass full ownership of the cabin to an individual or trust.

How to Create a Life Estate

Using a life estate deed is one way to establish a life estate in your home. This type of deed must be drafted carefully to identify who will own the life interest (the right to possess and enjoy the property during their life) and who will receive the remainder interest (the right to receive the property when the individual owning the life interest dies).

Once a life estate deed is properly drafted, signed, and notarized, it should be recorded in the appropriate land records office to give it full legal effect. After recording the deed, the individual with the life interest (or life estate) can use and enjoy the property throughout the remainder of their lifetime. Note that the life interest holder is typically responsible for maintaining the property as well as any property tax liabilities.

Using a trust is another way to create a life estate. For example, a property owner could title their home in the trust’s name and, through the trust language, designate who will have the right to use and enjoy the property during life and who will receive the home at the life interest holder’s death.

Life Estate Benefit: Probate Avoidance.  Whether you are using a life estate deed or a trust to create this type of split interest in property, probate avoidance is one of the major benefits. Probate is often an expensive, time-consuming, and public process for passing accounts and property to your loved ones. Using a life estate deed or a trust as a part of your estate planning can be an effective way to avoid involving your state’s probate court system in passing your property on to the individuals and groups that you want to receive it. Beyond merely avoiding probate, life estates can create additional flexibility in how you pass your property on to your loved ones by resolving competing interests among beneficiaries.


Life estates can be an effective and straightforward method for accomplishing your estate planning goals. Inhulsen Law can discuss this estate planning tool to determine whether life estates make sense in your particular situation and help properly implement this powerful estate planning strategy.

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