Month: May 2019

Bequeathing a Home Part 2

Posted by Galeet Levy on

I have two children, both are grown with children of their own.  Neither of them owns a home.  I would like to keep my house in the family for everyone to use.  Its not a large home so having two families live here would be rather difficult. But they could share it.  I have a trust that splits everything between my two kids.  I have included a hand-written note that I had notarized that states my wishes that they keep the house and not sell or mortgage it.  Is this a good idea, please advise?

 

It is very important to think long and hard about this.  Is this going to cause fighting and rifts in the family?   As you stated it would be hard for two families to share the home, even a large home for that matter.  You could be setting up battles over who gets to live there, and how much they spend for maintenance and repairs of the home. It is difficult for married couples to agree on owning a property, it is even harder to get siblings to agree.  This may not go over as well as you hope. Even the best intentions can go awry.
Lets look at the other side.  Lets say they sell your home, it could provide both families with a nice down payment for them to buy their own homes.  Then they can pick a home that works for them. Then each child can determine what they want to spend and how much maintenance they want to do. Another option is one family could get a mortgage to buy out the other and live in the house.  There is also the option to mortgage the house to provide two down payments, and then rent out the house.
Also, just to note, your notarized handwritten note won’t prevent your children from selling the house. Once you pass they can essentially do what they want with the house.  But it may cause some guilt and fighting among them about honoring your wishes.
Give our office a call if you have questions regarding your estate plan, we are here to help 818.887.9401.

Bequeathing a Home to a Loved One

Posted by Galeet Levy on

I am a 74 year-old retired woman living in a completely paid off condo. I hold title to my condo in my name only. I want to know more about leaving my leaving my condo to my partner and daughter when I die. I am asking about adding my partner of 20 years and my daughter to the home title in order to avoid probate. What is the easiest way to do that? Can I leave it in Joint Tenancy so the condo will pass both survivors (partner and daughter)? My parents had held title with both my brother and me and I want to know if there is a problem with this.

YES. There is a problem with this.   Here are a couple issues that could arise after you die. What if your daughter wants to sell this condo to raise cash, but your partner disagrees and doesn’t want to move. What if your daughter would like to collect rent and your partner refuses? What if your partner wants to remodel the home as she ages but your daughter wont share the costs? Would one survivor have to buy the other out? It also brings up questions of property transfer taxes.
The best solution is a revocable living trust! A trust can leave instructions (your wishes) for how to handle this situation. It may say that your partner can stay in the condo indefinitely but must pay a rent to the daughter. The trust can even establish what is a fair rent to pay. The trust could also say that the condo should be sold and the profit divided evenly.

Whatever you decide a revocable living trust can give the proper instructions on what to do. Both your partner and your daughter will understand these were your intentions and wishes. It may also prevent fighting and resentment and animosity between your partner and your daughter. With a Trust you also have less gift tax problems to deal with. The property will transfer to either survivor, depending on your instructions. You won’t face property tax reassessment. There are many issues that are never even thought of when it comes to bequeathing a property.
If you are interested in talking to an estate attorney to help you with bequeathing a home to loved ones please give our office a call 818.887.9401.