Life Estates have historically been used to avoid probate, but now a trust may be a better option and offer more benefits than a life estate. Due to changes in the Medicaid look-back period, life estates no longer provide the benefit of a shorter look back period over trusts, as both are now 5 years. In addition, if the home is sold during the life of the life estate holder a trust can avoid losing tax exclusions, but a life estate may not.
See Ann Margaret Carrozza, Rethinking the Value of Life Estates, Huffington Post, May 5, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
