I am the remainder man on a life estate that, in addition to stating transfer, takes place at death. It also says in the life estate documents (all written and done in 2012) that if mother is out of home for 6 months and isn't going to return. That is exactly the case. She is 98-yrs-old and has been in a nursing home for 9 months and will need to finish the balance of her life there. I am having a hard time being able to pay for the upkeep, maintenance, taxes, lawn care etc., on our home and hers. How would I get the life estate to be activated and transferred over to my name? Without having to wait for her death? Thank you!
You have a LE, so you can actually have it close out & be sold ahead of death. You can buy her out. It would be based on actuarial tables for % of interest. It is in my not an attorney opinion never ever a DIY but needs to be done by an attorney who does tax law as this # is quite specific and has IRS reporting done for mom and for you. Better estate law practices will have a tax law attorney affiliated. It - sadly - will be an income producing aka a taxable event as it’s (LE) not designed for this… it’s designed to be after death transfer designed to avoid probate. We bought a LE after Hurricane Katrina, mom late 80’s and 3 kids, each got a specific % of the $ based on the moms age; it was land, house 86’d by storm, the local POA son & mom kinda expected the other 2 to give mom their % $ but they did not & not required to do so as per LE. Depending on how LE written, you may have to put it up for sale if you cannot buy out her share…. and why you have to, HAVE TO, go over all this with an attorney in detail. Is the firm who did this in 2012 still in practice? Or any of their associates?
To be quite honest, I’d suggest for you try to figure out a way to get the $ to pay her house costs… she’s 98, time is on your side…. like shut down the house so that it’s not bleeding out $ and wait it out, if you possibly can, that going to be the best most financially conservative way to deal with this. Do at a minimum pay property taxes as the county / city will place it up on its annual delinquent tax sale & should that happen to the point it goes to redemption it will be a hot mess to deal with at best or you loose the property at worst. I do tax sales… there’s a lot of heartbreak behind the listings.
If the parent goes onto LTC Medicaid, that program requires the elder to do a copay of almost all their monthly income as a copay to the NH. This too causes issues for family as to how to pay for their parents property costs. And this one has the additional risk of dealing with MERP aka estate recovery & most of us tend to be risk adverse. For most of us, we don’t have the purse or wallet to have a 2nd home to being with which is what having our parent in a NH yet keeping their home ends up being.
If not and she has been on your State Medicaid program - either for LTC Medicaid to pay for custodial care in the NH or on a community based program while still living in her home before a NH, I’d suggest that you meet with an elder law attorney group that is CELA level asap. Why? They need to advise you as to the exposure your mom will have should she change the title of her asset (house) that currently is under an LE to one that is to her and to you, AND what Medicaid will likely do. Again none of this is ever DIY. You need to find really good experienced legal and pay for a retainer for them for yourself and your mom’s behalf.
Just spitballin’ but Sonny probably now 70’s retired with his own health, income and retirement issues. For both he & mom it’s all $$$$ outflow. If he can figure out how to lessen the outflow that his moms house is for another year or so, time is on his side for that LE. I think he’s panicking…. lots of places have property taxes due in some way in January maybe that’s what triggered this? Or as mom moved into a facility, her tax classification got changed & it increased significantly. The year after my mom died, hers tripled! That was not fun….
Also, ask this question at www.bogleheads.org. Several good T&E attorneys there who give great advice.