A legal instrument in New Jersey allows an individual to transfer property ownership while retaining the right to reside on the premises for the duration of their life. This arrangement establishes two distinct interests in the property: a life estate, held by the person retaining the right to live there (the life tenant), and a remainder interest, belonging to the individual or entity who will inherit the property upon the life tenants death (the remainderman). For example, a homeowner might convey their house to their children, but reserve the right to live there until they pass away.
The strategic employment of this type of deed can offer several advantages. It provides a mechanism for estate planning, potentially avoiding probate proceedings upon the life tenant’s death. Furthermore, in certain circumstances, it can offer a degree of protection from creditors. Historically, these instruments have provided a means for individuals to ensure their housing security while concurrently planning for the ultimate disposition of their assets.