I am sure that you’ve all heard the recent news that Hugh Hefner put the Playboy Mansion up for sale. For a mere $200 mill, you can purchase the mansion and call it your own – with one catch! Hugh will live out the remainder of his life at the mansion before you can take possession and live at the property.
In order to live in the mansion and use the property completely as his own, Hugh will reserve a “life estate” in the premises. That means that he will grant the property “to Mrs. New Owner” but “reserve” a life estate in it for himself. He can live there completely carefree of anyone trying to evict or oust him and use the property as if it were in his own name for the remainder of his life. As the “life tenant,” he can collect rents and profits but is also responsible for the maintenance and upkeep of the property. Upon his death, title to the property will automatically go to the New Owner, rather than than the Hefner family.
Why a life estate? A life estate allows you to transfer the property now but maintain the control and possession of the property. Nobody can make you leave, or sell the home, without your consent. Having a life estate also saves your family the time and expense of having to probate your estate upon your death. Finally, reserving the life estate may reduce your estate and help you qualify for MassHealth/Medicaid.
You too can reserve a life estate in your home if it is appropriate to your estate plan. Find out more about your best plan or ask me questions anytime about this estate planning tool, or any others. Contact me HERE to set up an appointment. We will work together for your future and that of your family and loved ones.