Life Estates

By creating a Life Estate you retain the right to live in the property for the rest of your life and the remainder interest is given to someone else or to a trust. New Hampshire Medicaid and MassHealth view the creation of a Life Estate as making a gift which triggers a disqualification period from Medicaid eligibility.

• Protects your right to live in and use the property for the duration of your life.
• The property will not have to pass through Probate at your death.
• The children (or whomever the property is gifted to) receive a step-up in basis upon your death.

• If the property is sold during your lifetime, you receive a portion of the proceeds proportionate to your life expectancy based on the life expectancy tables. If you are in a nursing home at that time, your share of the proceeds will disqualify you from medical assistance that you might otherwise qualify for. In addition, the portion of the proceeds received by the remaindermen will be subject to income tax.
• If the property becomes vacant because you need to enter a nursing home, the home owner's insurance premium will increase if it remains vacant.