Question: I have been advised to transfer my house to my son, using a life estate deed.  This should be more convenient for him after I pass away. I am 75 years old, and in good health. What happens if my son dies before me?

Answer: With a Life Estate Deed, you essentially create a partnership between your son and you. After you pass away, the agreement allows your son to take over ownership of your home. No probate filing is needed.

While you are living, however, the agreement tries its best to protect your independence in the home. For instance, you pay all costs like taxes and insurance. Thus, nobody can evict you from your home, or dictate your use. If you want to remodel, go ahead. If you want to rent out a portion of the home, go ahead. But if you want to sell or mortgage the home, you need your son’s assent.

This is where the agreement becomes interdependent. Most times, you can trust your son to do the right thing.  However, be ready to include him in your decision process. Technically, if he disagrees with you, he can refuse to assent to your sale, mortgage or reverse mortgage.

The next level of interdependence comes should your son die before you. Now his rights are passed on to his heirs.  This could be his wife, kids or anyone he names in his will. Consider this possibility when deciding on a life estate deed.

If you anticipate problems with these other people, perhaps a Trust better serves you. You will be able to manage this situation by swapping other people in your son’s role, should he die before you.  Also, if you own your home in a Trust, you will not need your son’s assent for a future sale, mortgage or reverse mortgage.

Finally, a life estate deed can create a hairy capital gains tax scenario should you sell the home during your life.  Namely, your son will receive a portion of the proceeds and thus be taxed around 15% of his share. The amount of his proportional share for capital gains calculations, depends upon your age, and grows as you get older.

Attorney James Haroutunian practices real estate law, estate planning and small business formation in Billerica at 630 Boston Road.  Contact him with questions at 978-671-0711,,, or email him at


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