Things to Consider Before Modifying a Life Estate Deed in Maryland

Life estate deeds are commonly used for estate planning purposes and to avoid probate. If you would like to learn more about life estate deeds, please read our blog post “What Are Life Estate Deeds in Maryland?”

If you are considering modifying your life estate deed, there are some things you should keep in mind. First, if you have a life estate deed without powers, you will need the legal consent of the remainderperson(s) to make any changes to the deed. A life estate with powers, on the other hand, means that you can make unilateral changes to the deed at your discretion.

Second, you should consider the tax implications of modifying your deed, such as gift, capital gains, or inheritance taxes. It’s always a good idea to consult a tax specialist or attorney for guidance if you plan on modifying a property deed.

And third, any change to your life estate deed could impact Medicaid eligibility. When determining eligibility, Medicaid reviews all asset transfers during the five-years prior to your application (commonly called the “Lookback Period”) and if they determine that the life estate modification was a gift or an undervalued transfer, they could impose a delay in your eligibility for benefits.

If you have questions or need assistance updating a property deed, consider contacting an experienced real estate attorney for guidance. For a free, confidential conversation to discuss property deeds, contact Maryland real estate attorney Stephen J. Reichert at 410-299-4959 or sreichert@reichertlegal.com.

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