According to statistics, about half of all marriages in the United States end in divorce. Many of those divorces ultimately turn into a re-marriage at some point in the future. Often, a re-marriage creates a blended family. If you are part of a blended family, deciding how to handle the family home in your estate plan can be difficult. Creating a life estate may be the answer to the problem.
With a blended family, the issue becomes how to provide for your current spouse while still protecting and preserving the asset for your children. Regardless of how much you love and trust your current spouse, you may not want to leave your home outright to your spouse with the understanding that your spouse will then pass it on to your children in his or her estate plan.
A life estate allows you to provide for your spouse while still preserving the legal ownership of the property for your children down the road. A life estate is a legal arrangement that gives someone (your spouse in this case) the right to live on the property until his or her death. Upon the death of the life tenant, the property reverts back to the remaindermen (in this case your children).
By creating a life estate you do not have to worry that your spouse will suddenly have to leave the marital residence if you die. By the same token, you can be sure that your children will eventually have the benefit of the asset as intended. Life estate provisions can also be made part of a trust provision.
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