[WSBAPT] Real Estate Purchase Option - Best Practice

[Mike Winslow]

If you want the 'avoid probate' component to work, I think you will need a
trust and a successor trustee. 
 
Otherwise, the sale could take place now on an installment sale basis. That
also would avoid probate and avoid the need to draft an option. And avoids
dealing with the successor trustee, which may be some other family member.
But if there is financing currently in place, beware the Due on Sale Clause
in the existing loan.
 
If you just record an option now, then the transfer would need to be run
through probate to obtain a deed (assuming no trust in place). The option
could also be granted in the LWT of the parent, but that is subject to
possible change; if I were the kid  would want the option to purchase.
 
Also lurking is the issue of use and occupancy as between the Co-tenants
during the parent's life time. If the parent does not live there, but the
kids do, then there should be an agreement defining the rights of the parent
(such as whether rent is due, who pays for maintenance, taxes, insurance,
etc.). You don't want the other kids to come back on the occupant children
and claim some reimbursement on behalf of the deceased parent. A Tenancy in
Common agreement may be appropriate, that contains the option agreement.  
 
A memorandum of the TIC Agreement could be recorded, which denotes there is
an option to purchase, without disclosing terms to the world.
 
 
Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com
 
This message is from an attorney, so it's confidential. If you are not the
intended recipient, it's too late to stop reading this message, but you may
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From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of G. (Gus) Benjamin
Lindsey III
Sent: Tuesday, May 03, 2016 10:55 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Real Estate Purchase Option - Best Practice
 
Good morning,
 
I am coming in on the tail end of a situation and I am hoping that others
can provide some insight on the most effective option for dealing with the
issue. (And more importantly avoiding a estate dispute down the road!)
 
Married couple is purchasing real property (primary residence) with a parent
of one spouse. (Apparently the parties are already in contract with the
purchase scheduled to close any day now.)
 
For reasons unknown to me, the parties did not purchase to property as
tenants-in-common right survivorship rights. However, the parties want to
draft an agreement that gives the survivor the right to purchase any
deceased person's share .  The main focus is allowing the married couple to
purchase the parent's share without it having to go through probate(At this
point, I am unsure as to how real property is handled in anyone estate plan
but I have requested that information.)
 
Lurking in the shadows, in my opinion, is a potential dispute with the other
children of the parent-real property owner upon the parent's death. The
parties seem to be in denial about this potential dispute. (Culturally this
family makes all decisions via consensus.)
 
Another option that has apparently been discussed is the married couple
starting to acquire the parent's interest in the home now via payments. 
 
This may be simple but there are so many cooks in the kitchen that I want to
make sure that I am not missing anything.
 
Thanks!
 
 
 
Sincerely,
 
G. (Gus) Benjamin Lindsey III
Attorney-at-Law

 
The Law Office of G. Benjamin Lindsey III
2012 Grade Road, Suite 202
Lake Stevens, WA 98258
 
Phone:   (425) 263-9585
 
website: www.gbl3law.com <http://www.gbl3law.com/> 
 
Employment/Labor Law     Construction Law     Civil Litigation     Estate
Planning      Probate     
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