I think I asked this years ago when my parents wanted to add me to the deed on their house. I wound up deciding not to be added but I am not sure I remember why.
Situation is slightly different now. The house they co-owned with my brother in law was resolved (and worked out really well for them!). The house will be paid in full and will be signed over from ex BIL in about 1-2 weeks to their full ownership. So, the house will have no mortgage and is worth around $400k. My sister will continue to live in the house for now- renting it from my parents for an amount that will cover the mortgage payment on their residence.
My mother desperately wants me as a co- owner on this house. She wants to protect my sister's kids and make sure there's no way the house can be taken from them if something happened to her.
Is it a problem for me to be a 1/2 owner of this house? Is there a downside I'm not thinking of? The only ones I can think of are on her end- if I died or got divorced, my husband would have a claim. Other than that, what else should I be worried about or ask the lawyer about next week? The main two I am thinking about are 1) tax burden/ credit issues (although owning a paid in full house probably reflects WELL on my credit, right?) and 2) liability if something terrible happened in that house such as a death or accident that someone could sue for.
I suggest an Elder Law attorney in the state/county where she lives. Call the Bar Association in the county in which she lives and ask for referrals for Elder Law.
Why would you own 1/2 of the house? Why not 1/3 or 1/4?
Why don't your parents think they can protect their grandchildren on their own? What is the exact purpose of adding you to the deed at this point?
They can arrange to leave the house to you in their wills but that wouldn't kick in until after BOTH of them were deceased.
I am really not 100% sure what her purpose or her logic is. I think she's terrified that she'll need long-term care and they'll be able to take not only her house but a house her grandchildren need but I'm not 100% sure. Or that my sister will somehow get it if my parents died (even though their will is set with everything passing to me only).
Does it make a difference if it's 1/3? I am not sure if her plan is they own 1/2, I own 1/2 or each of my parents and I own 1/3, does it matter?
My mother lives in hell with my sister and everything she has put us all through so, honestly, if there isn't downside for me, I'd like to just let her do it and give her whatever peace she is hoping to get out of it. But if it has downside for me (or too much for her), I'll push back.
Think long and hard about your goals first. An overly complicated estate is a nightmare as well. Trust me.
If they haven't yet had a financial planner take a look at all of their assets, together as a whole, and possible scenarios in the future - now is the perfect time. The ownership/deed decision is part of a much bigger picture.
there aren't really any other assets. The home they live in and now this other home is pretty much it. But thanks.
It's not lots of assets, but it's pretty high value, plus a complicated situation. If your parents are unwilling to see an attorney (one who knows both elder law and tax implications) about the best way to assure their assets pass in the way they want, maybe you could see one on your own, for your own peace of mind, and theirs too.
they've seen an attorney and created a will that they feel comfortable with. On top of that, she now wants to add my name to the deed/title of a paid in full home. I could argue with her that it's not needed or I can just let her do it if it will give her some kind of comfort (for whatever reason). Her lawyer did not suggest the name being added but also has no advice against it and is willing to draw up the papers if that's what she wants.
So, again, in the specific case of being added to this home, is there a downside to consider?
It depends what type of ownership is created: joint tenancy or tenancy in common. Joint tenancy is where you both own the entire property -- not 50-50, but both own the entire thing. When she dies, you have the right of survivorship. This is the type of ownership spouses have with each other, right? You and your spouse don'te each own 50% of the house; you each own the entire thing with right to survivorship.
Tenancy in common is the form of ownership where you each own a portion, with no right to survivorship. So if you each own 50%, when she dies, you still own 50%. The other 50% goes to whomever she designates in her will. It can also be divided 60-40, 90-10, or however you decide. You have to talk to a lawyer to determine which form of ownership would be best. There are a lot of implications, and nobody here can give you advice on which would be best for your situation.
Thank you, this is helpful. Sounds like for what she wants, she wants joint tenancy on the title/ deed.
conandrob240 said:Thank you, this is helpful. Sounds like for what she wants, she wants joint tenancy on the title/ deed.
Never mind. You have to have a tenancy in common. I just reviewed the definitions. For joint tenancy the ownership has to commence at the same time. https://en.wikipedia.org/wiki/Concurrent_estate
But you MUST talk to an elder lawyer about what happens if she goes into a nursing home and they claw away her assets before she's eligible for Medicaid. I am not sure what the rules are if A) there is a paying tenant in the property, and B) if she only owns a portion of it. I'd also make sure your sister has a lease -- a very long term lease, as long as is legal. I don't know ... is a 10-year lease legal? I'd be concerned that a nursing home can claw back the house after the lease expires. So make it a long one. Also find out what the tax consequences are of her giving you a gift of half the property. She may be subject to gift tax. However, I really don't see how this can be better than you inheriting the property. With an inherited property, there's a 100% stepped-up basis -- meaning when you go to sell, your profit is calculated from the time you inherited it.
There can be other options, like a revocable trust. TALK TO A LAWYER.
I think you are right, unless she gives me the whole house, Medicaid could still get her portion so this plan doesn't make much sense.
conandrob240 said:I think you are right, unless she gives me the whole house, Medicaid could still get her portion so this plan doesn't make much sense.
I have a feeling that the exception would be if someone is living in the house under a legal lease. For example, they can't take your residence if your spouse is living there. That's why I said make sure your sister has a legally executed lease for the longest term possible. Talk to a lawyer.
interesting. If there's a lease and I own 1/2, is that my income then? Lots of good Qs to ask.
IMPORTANT: Speak to an attorney. As far as I can tell, no one here is an attorney, so although very well meaning , the advice here could be inaccurate - and could hurt if you depend on it's accuracy and it's not.
I'm not an attorney - so please check the accuracy of what I post below with an expert.
First, there are different types of joint tenancy. Joint Tenancy in Common ( as I understand it) does not automatically result in one joint tenant inheriting the other half of the property. I believe plain Joint Tenancy means each party owns 1/2. When one party dies the surviving party still owns half and the other half goes to the decedent's heirs.
Joint Tenancy with Rights of Survivorship means the surviving tenant inherits. It does not avoid inheritance taxes.
In any joint tenancy the 1/2 owned by your parents could be subject to liens, and debts incurred by medical or continuing care charges.
Also, if they transfer ownership to you or anyone else, when they apply for Medicaid, the government looks back either 3 or 5 years. So to protect from these bills, the transfer must be made 3 to 5 years beforehand.
I can think of two actions that might work for you. One would be putting the house in a life estate. In a life estate your parents would put the house in the names of those they want to inherit the house. Ownership of the house would technically and legally be transferred to those named in the life estate ( you and/or your nieces and nephew). But they would have the absolute right to live there for the rest of their lives NO MATTER WHAT, or if they don't live there ( say they go to a nursing home) to use the house for their full benefit for the rest of their lives. In a life estate they could rent it out and get the income if they wish. They could do anything they want (as I understand it ) . They would be responsible for paying the taxes, and for all the bills and costs related to living in and maintaining the property. But when they die, ownership would not and could not be questioned. And, any debts they incurred would not be paid off by the sale of the house, because it wouldn't belong to them.
The other option would be to put the house in a family trust. I don't know a lot about how these work, but I've seen them frequently, most often in higher priced properties.
You need to speak to a trusts and estate lawyer. If your mother's intent is to preserve the value of the property for her grandchildren while shielding it from her potential future creditors, then there are better vehicles than simply adding your name to the deed.
she has an attorney. She has no need for estate planning as there is nothing but a house. Her will is in place that everything they have passes to me only. For some reason, it will give her peace to put me on the deed when the house transfers from ex-BIL next week. If there's no real downside to me or to her, I'd rather not add any stress to her life and just let her do it.
conandrob240 said:she has an attorney. She has no need for estate planning as there is nothing but a house. Her will is in place that everything they have passes to me only. For some reason, it will give her peace to put me on the deed when the house transfers from ex-BIL next week. If there's no real downside to me or to her, I'd rather not add any stress to her life and just let her do it.
What DannyArcher says IS in the domain of a trusts & estates lawyer. That is the type of expert who best knows about these things. You need a T&E lawyer, not a general lawyer or a real estate lawyer or a tax lawyer. A T&E lawyer.
sarahzm said:IMPORTANT: Speak to an attorney. As far as I can tell, no one here is an attorney, so although very well meaning , the advice here could be inaccurate - and could hurt if you depend on it's accuracy and it's not. I'm not an attorney - so please check the accuracy of what I post below with an expert. First, there are different types of joint tenancy. Joint Tenancy in Common ( as I understand it) does not automatically result in one joint tenant inheriting the other half of the property. I believe plain Joint Tenancy means each party owns 1/2. When one party dies the surviving party still owns half and the other half goes to the decedent's heirs. Joint Tenancy with Rights of Survivorship means the surviving tenant inherits. It does not avoid inheritance taxes. In any joint tenancy the 1/2 owned by your parents could be subject to liens, and debts incurred by medical or continuing care charges.
No. The above is inaccurate. Tenancy in Common (not "joint tenancy in common") is the form of ownership in which the parties each own a divided interest that can be sold separately and do not automatically by law pass to the other owner(s). The owners can hold equal or unequal interests in the property.
Joint Tenancy is the form of ownership in which each owner owns an undivided interest -- meaning each owner owns the entire property. This is how spouses own a home (except in NYS it is called "tenancy of the entirety" when spouses are involved). It automatically includes right of survivorship by law in New York state, where this property is located. http://legalbeagle.com/43232-joint-tenancy-right-survivorship-new-york-state-law.html
Conandrob cannot become a joint tenant with her mother/parents because interest in the property has to have been conveyed at the same time in order to create a joint tenancy. You cannot ADD a joint tenant at a later date. If Con is added to the deed, she must be a tenant in common.
I am not a lawyer, but as you can tell, I have had to deal with this type of situation. In NY state. But of course, consult a NY lawyer.
the deed is being rewritten so basically starting over so I could be added as joint tenant at this point in time.
Is the law different in different states. I was added as a joint tenant with rights of survivorship to the house my mother had lived in for 20 years - in Connecticut.
sarahzm said:Is the law different in different states. I was added as a joint tenant with rights of survivorship to the house my mother had lived in for 20 years - in Connecticut.
Yes, it varies by state. In NY Joint Tenancy automatically comes with rights of survivorship. There's not a separate category called "joint tenancy with rights of survivorship."
the house is in NY
seeing an elder lawyer makes sense for both houses in order to protect them from being taken to pay for long term care should either parent need it. My mom did this in NY. My brothers and I held the deed, but she had right of lifetime tenancy. Basically we owned the house, but couldn't do anything with it until she died. Not sure how this would work with a house they don't live in. Hence the need for an elder lawyer. My mom had few assets at the time of death because of her need for nursing home care. Because she protected the house in this way, it saved one asset to leave for us as an inheritance. This was extremely important to her. Good luck.
her lawyer told her it was pointless to add me (and had a bit of potential downside for her). That her will is the place to handle the assets. She updated her will to include this property specifically. Thank you.
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