We would like to look at life estates briefly and point out some of the pros and cons.
On the positive side a life estate can be used to satisfy certain estate planning objectives. Let’s say that you are divorced and you have children. You own a home, and you want your children to inherit the home eventually.
As fate would have it you meet someone new and decide that you would like to get married again. If you die first you definitely want your new spouse to be able to continue living in your home. However, you do still want your children to inherit the home after the death of your spouse.
One way that you could address this scenario would be to create a life estate. You could make your husband or wife the life tenant and your children the remaindermen.
Your surviving spouse would be able to remain in the home with certain rights of ownership throughout the rest of his or her life after you pass away. Upon the death of your spouse the remaindermen would inherit the house, and it should be noted that this assumption of ownership would take place outside of the probate process.
A potential downside is that the remaindermen have to agree on certain actions that may be proposed by the life tenant, and this could pose a problem. Disputes can also arise about mortgage and/or property tax payments.
The life estate is not a cure-all for blended families, but it is a tool that exists, and you should certainly be aware of all options that are available to you.