Trending
Dear Mr. Feichthaler:
When I bought my property, I placed it in my revocable (living) trust. I did this to avoid probate. In the trust, I named my two adult children as heirs. I see you have written about Enhanced Life Estate Deeds, and a friend told me the trust should sign a life estate deed out to my kids. Is this a good idea?
--Jamie N.
Dear Jamie:
If you read this column often, you know how important it is to avoid probate on major assets like your homestead. Probate fees typically are over $10,000, and can take months, even years, to complete. With a little planning this can be avoided. It sounds like you created a trust to make sure your kids share in your estate and to avoid probate. If done correctly, your wishes will be met. When it comes to real estate, the question is whether to place the property in trust OR prepare a life estate deed naming beneficiaries. The trust is designed to "survive" you, so even after you pass, the trust will continue on, pursuant to your instructions. In your case, those instructions are likely to distribute the value of the house to your two children.
When a client asks for counsel on how to avoid probate for a home in a situation like yours, I advise them not to create a trust, and to have an Enhanced Life Estate Deed prepared instead. The owner retains total control and authority over the property, as they would with a trust. But, if they pass while owning the property, it would be owned immediately by your children, without the need for any trust administration. There are situations where a trust is advisable over a life estate deed, professional advice should be sought before making that decision.
In your case, your friend is not providing you great advice. As noted above, the trust doesn't "die," so if a life estate deed is signed from the trust, the property may not pass as you would expect. Especially if the trust noted different beneficiaries than the deed, you would be inviting a lawsuit. You may wish to consider deeding out of the trust first to you individually, THEN have the life estate deed prepared. A little planning can save a lot of time and expense to your family, but if done improperly, you could be placing a significant burden on them. Your kids will be thankful you planned well!
Eric P. Feichthaler has lived in Cape Coral for over 33 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.
Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.