Seniors should be informed on life-estate rights designation

I want to bring an important matter to the attention of our senior-citizen population regarding the transfer of their home in whole or part to other individuals, and the effect that such transfers will have on tax programs designed to aid seniors.

My office has been contacted by a number of senior citizens who, after transferring title to their homes to their children or other relatives, have learned they are no longer eligible for state and municipal property-tax rebate and reimbursement programs such as the FAIR homeowners rebate, the PTR (property tax freeze), the veterans deduction and the senior citizens deduction. For some seniors this amounts to a loss of $1,000-$3,000 per year or more.

Seniors making such title transfers need to be made aware that they can remain eligible for these programs, but to do so they must ensure that they are included on any new deed as retaining life-estate rights, which means they have the right to remain in their home for life. Without this clause, seniors will be disqualified from receiving the tax benefits they may have been entitled to as homeowners, even if they continue to pay all the expenses on the house, including the property taxes.

We have been advised of a number of instances where title transfers were prepared by attorneys who apparently were unaware that not including a life-estate rights clause would negatively impact a senior's ability to receive property-tax rebates. Many seniors have come to count on these rebates to supplement their income.

When considering a transfer of their property, seniors need to be aware that should they seek Medicaid benefits in the future, Medicaid may assign a value to life estate, which could impact their Medicaid eligibility.

If seniors have further questions regarding the life-estate designation or its impact, they should contact their attorney. If they have any questions or want more information about any of the property-tax rebate and reimbursement programs mentioned above or any other state programs, they may call my district office at (732) 583-5558, and my staff will be happy to assist them.

Assemblyman Samuel D. Thompson

(R-Middlesex, Monmouth)