Life estate vs trust to give partner rights to home
A life estate would give the partner absolute rights to the home. A trust could make the partner's rights contingent on him or her paying the taxes, maintenance, insurance and mortgage payments.
Attorney Tom Olsen: Bill, you're on news 96.5, go ahead.
Bill: A lady's been living with me for 12 years. If I die before she does, I want to protect her, so she's got a place to live. Is there a way I can do that without a bunch of taxes and the probate?
Attorney Tom Olsen: There certainly is, Bill, and it depends on what level of rights you want to give her. One level, maybe the easiest level, would be that you would give her what's called a life estate. With a life estate, she would have the use and benefit of the property for the rest of her life and only upon her death would this home go somewhere else like to your children. Bill, that would allow her to live in the home or in fact live somewhere else and rent it out and collect the rents. It'd also make her responsible for pay taxes, insurance, maintenance and mortgage payments.
Now Bill, there is some risk with that and that is that she may abuse and not take care of the property and now your kids got to sit around and wait to get this piece of destructed property somewhere down the road. Bill, if that does not give you a comfort level, another way to do would be to create some kind of living trust where your kids would be responsible for managing the property and letting her use it as long as she maintains it and takes care of it, so it could be yanked out somewhere if she doesn't maintain it.
Bill: Well, she has a daughter and it would go to her.
Attorney Tom Olsen: Well, then she would be motivated to take care of it. Bill, I would recommend that you would do a deed called a life estate deed. It would state that upon your death, it would automatically go to her. No headaches, no hassles, no probate. Bill, I'd be pleased to assist you with that if you want to give me a call.