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Life Estates

Placing their home into a life estate may be an advantageous course of action for many seniors. As the name implies, a life estate is an interest in property which lasts for the lifetime of the person called the life tenant. When the life tenant dies, his or her interest in the property ends and the ownership and possession of the property becomes fully vested in the remaindermen, the people identified in the life estate document as the people taking title upon the death of the life tenant. There can be any number of joint life estate holders, typically, a husband and wife and any number of remaindermen as well, often the children of the life tenants.

During the lifetime of the life tenant, he or she may live in the property and has control of the property. In most states, a life tenant’s interest in a life estate is a noncountable asset for determination of Medicaid eligibility. In many states, upon the death of a life tenant whose home is held in a life estate, the state cannot seek to use the home for reimbursement for amounts paid by Medicaid. In other words, the home is protected from Medicaid claims.


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