Legal Question in Real Estate Law in New Jersey

Life estate and home sale

Pat sells her home grants and conveys property to 3 different parties for one dollar. I am one of those parties. The contract verbage is that Pat executes the deed ''as a life tenant''. Pat ''bargains, sells and conveys to the 3 named parties , their heirs and assigns expressly subject however to a life estate reserved to Pat so long as she may live .'' Pat wants to sell now that she has moved into an assisted living 2 years later. Who receives the proceeds from the home? Pat, the 3 parties, or all 4 people? Can she receive 100% and now I am cut out?


Asked on 7/17/07, 3:28 pm

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

Re: Life estate and home sale

Pat can only sell or lease what she has which is a life estate. As a practical matter, life estates are rarely marketable except to the owners of the remainder interest. In the usual case, the life estate is sold to the remanidermen and the interests merge.

Everyone involved in this transaction needs to use caution both as to the tax treatment of the transaction as well as the effects on Pat's Medicaid eligibility. Consult your lawyer.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 7/17/07, 5:06 pm


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