Back in high school, I don’t think I was very good at speaking or writing. However, as I look back it was not because I was nervous, it was because I did not know what to speak or write about! Over the past 30 years, I keep working at communication skills. Coming up with things to write or speak about is the easy part, but there is still something that scares me.

The problem is often I am writing or speaking to a group of people, and I know there are a lot of differences in groups. Variety makes it fun, but it also makes it challenging when information starts to get a little more specific. During a recent speaking engagement, the topic of intentionally defective grantor-retained trusts came up. Since it was a new subject to many people, their interest was piqued, and suddenly many people were thinking this could be for them. Realistically, that planning tool may apply to only a small group of people.

Thinking of that situation, I hesitated as I considered writing about life estates. Many people have heard of life estates, and some people likely have even been the benefactors of a life estate and maybe didn’t even know it. In years past, the simple language in a will referred to a surviving spouse getting life use of their spouse's land if the spouse died first. In many cases, the children would be the remainder beneficiaries of that life estate when the surviving parent died. It was a very practical, common, simple tool to use for real estate.

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Over the years, of course, there was something bigger and better that came along, referred to as a trust. In many ways, the trust was a similar concept. But a trust could involve holding other assets beyond real estate, and there could be instructions provided with the trust. It also sounded cool if you had a trust.

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So does that mean that life estates are dead and gone, never to be used again? I don’t think so. Remember, the traditional place a life estate was used was in a person’s will, and that can still work. However, you and your spouse would not have to wait until a death to use a life estate. With a simple deed change now, while still living, you could direct where the land is going at your death subject to your life use. Under current law, the land would get a stepped-up basis because the original owner of the land retained a life estate in the land. The life estate deed should also avoid probate. You could have a direct beneficiary for the land without the conflicts and concerns of a will or a revocable trust.

If you do a living life estate, and deed the property during your lifetime, it is a low-cost deed change, and the remainder beneficiary is guaranteed to receive the land in the future. It is simple. Now I can almost feel and hear people running toward that idea.

So what are the downfalls? To start with, it’s irrevocable. What if you change your mind? Some people think that’s an advantage because if they start losing their mind, they don’t want to change it. Some see that as a disadvantage if a remainder beneficiary were to predecease or go wayward. So what do attorneys think of this? Well, I will be careful here because some have suggested it while others advised against it for various reasons. Is it for everyone? Absolutely not. Is it a great tool for some situations? Absolutely.

You know what my favorite part of writing and speaking is? I love to give people ideas, options and things to think about.

Myron Friesen is the co-owner of Farm Financial Strategies Inc. in Osage, Iowa. He can be contacted at 866-524-3636 or friesen@farmestate.com.