Liabilities of Estate Ownership

[sbarlowholmes]

My in-laws own a double-wide on an acre of land in Malvern Ar, paid in full. They have 3 children, my husband, Michael, a son, Bubba, and a disabled daughter, Sis. All of course are adults. Sis was born with juvenile rheumatoid arthritis and has never worked a day in her life. The in-laws want all that they own to go to Sis to insure that she has a home for the rest of her life. That is fine by Michael, though Sis being disabled, is on SSI, and cannot own anything. Thus the in-laws wishes are that the home be in Michael and Bubba's name, Michael will pay yearly taxes if he is able. Bubba won't tell his parents that he wants his share of the value of the property but he sure voices some opinions to Michael and I. The in-laws do not have a legal will written and last week they talked to a lawyer who told them the will was not necessary as long as all the children were in agreement. Now Bubba won't even talk about it, his parents have no idea of his feelings, it's not our place to tell them, and they are both old and not in good health. If we wait until they die, I assume the property would be probated and then divided between the children, and Sis would lose her SSI, Bubba would insist on his share of the value, and it would probably have to be sold. However, if Michael does agree to have the property put solely in his name, what liabilities and costs might he incur from that, and how might that affect his own retirement, etc down the line. We do not have the money to take over the expenses of another home, we might manage to pay the yearly taxes, but we could not cover insurance, utilities, and upkeep on the house.

 

[army judge]

Your parents can deed the home to Sis via a life estate.
This is how its done.

Your parents grant a life estate to themselves (Mom & Dad, with rights of survivorship), Sis, with Bubba and Michael receiving a vested fee simple remainder. As soon as Mom, Dad, and Sis die, the life estate interest merges with Michael's and Bubba's remainder. Michael and Bubba can then decide what they wish to do. One could buy the other out, or they could sell the property and divide the proceeds.

Mom and Dad shouldn't wait until their death, they should do it now.
It won't affect their ability to run the home as they see fit.
It also won't impact Michael's or Bubba's finances.

Speak to a lawyer and tell him about this post.
You can print it, and take it with you.

Your parents would be foolish to die intestate.
If their property is probated, the county and state take a piece of the estate.
Do it now, and your family keeps it all.
It also gets done just the way Mom and Dad desire, not the way the state wishes to divide it.
You also avoid significant tax liabilities and fees!

 

[sbarlowholmes]

I guess that I should have mentioned that Sis does not live in the home, she actually lives with her boyfriend. She is 48 years old. Are you saying as a disabled person, she will automatically receive it all and if so, will she lose her SSI?

 

[army judge]

I guess that I should have mentioned that Sis does not live in the home, she actually lives with her boyfriend. She is 48 years old. Are you saying as a disabled person, she will automatically receive it all and if so, will she lose her SSI?

You said Sis' parents want her to inherit the home.
Well, a life estate allows you to use the home for your natural life.
You can't sell the property, only live in it.
I suppose, she could rent it out.
But, she has the use of it for her natural life.
She never gets the deed.
She, however, has her life time to enjoy the property.
It is deeded in remainder (after the death of Sis) to Michael and Bubba.
Bubba and Michael will be the joint owners in tenancy of the property.
Neither Bubba or Michael can sell the property before the death of Sis.
Upon Sis' passing, Bubba and Michael are free to live on the property, divide it, or sell it.

The solution is in my previous post.
Speak with an attorney about it.
Have the attorney speak with yoru parents about it.
It allows them to provide for their daughter, should they pre-decease her.
It honors their wishes.
It keeps the state from screwing you with probate costs and taxes!

 

[sbarlowholmes]

I understand, but.......

That sounds like a wonderful solution, but if they set it up like that, will Sis still be able to draw her SSI? She is not able to work and that is her only source of income, it barely covers her utilities and food. My husband and I can pay her taxes at this time, but I'm not sure for how long. Who will be responsible for the upkeep of the house, insurance, taxes, etc, as the parents have no money to leave, and we are not a wealthy family. My husband works, and is near retirement, and I am disabled also.