Legal Blog

The Weekly Scenario: Remainderman & Estate Planning

Question: My mother gave my sister a life estate in property documented by a life estate deed. I have been given the remainder interest after my sister’s death. If I pass away before my sister, what would my estate need to do? Answer: During the lifetime of the life estate owner, the only interest of the estate of the remainderman is a future interest in the property. Since the remainderman’s estate only has a future interest, the remainderman’s interest in the estate would have no property to administer. Only upon the death of the life estate owner will that interest pass to the remainderman by operation of law. At that time, the remainderman’s estate will have a property interest that can be administered. Comment: I believe the executor of a deceased remainderman’s probate estate would possess a vested future remainder interest in the property. If the estate is substantial enough to have to file an estate tax return with either the federal or state government, one issue to consider is that the executor would likely have to obtain an appraisal of the future interest in the property. The value is based on the life expectancy of the life tenant based on IRS tables.. If you have any questions or would like more information please contact Steve Shane at: sshane@offitkurman.com | 301.575.0313.

ABOUT STEVE SHANE

Steve Shane Head Shot for webSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.   You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.

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