[WSBARP] Life estate upon death of grantor

Thu Aug 22 07:56:39 PDT 2019

As always Eric has great advice. For me, I don’t like a life estate for any
reason – too many possible issues that come up. Having had to litigate this
issue in the past, I would get deeper into what is reasonable maintenance
and repair and actually name some of the items the occupant has to
maintain. I’ve learned this can be a hot bed of contention between the
occupant and heir that can cost a lot of legal fees and acrimony that the
grantor did not intend.

Sincerely,

Tom

Thomas J. Westbrook

Attorney at Law

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Rodgers, Kee Card & Strophy, P.S.

324 West Bay Drive NW, Suite 201

Olympia, Washington  98502

Phone: 360-352-8311

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Email: tjw at buddbaylaw.com

Skype: thomas.westbrook

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*From:* wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
*On Behalf Of *Eric Nelsen
*Sent:* Wednesday, August 21, 2019 1:34 PM
*To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
*Subject:* Re: [WSBARP] Life estate upon death of grantor

Having recently encountered some issues with this kind of arrangement--that
is, giving someone a right to occupy property after death of the grantor,
with residue going to someone else--I have compiled a list of
issues/provisions to think about in structuring the arrangement. I think a
trust, whether RLT or testamentary, is the safest way to go, because there
are a lot of potential and unforeseeable problems that can arise and
somebody (the trustee and/or the residue heir) needs some flexibility and
discretionary authority to deal with them. There is background law that
addresses almost all these issues, but better to have express terms in a
trust so there is no argument.

My rough notes to myself:

                gift is only a right to occupy and is conditioned on
fulfilment of all conditions herein. right to occupy is not assignable and
may not be shared except for casual overnight visiting guests.

                gift includes right to occupy without payment of rent
during pendency of probate, but during pendency of probate the beneficiary
must cooperate in allowing access to the property to the full extent the PR
finds it necessary or convenient, at any time, upon 12 hours' oral or
written notice or no notice in case of emergency.

                gift is not a life estate. the gift is intended solely as
an accommodation to X to allow her/him to live at the property. my intent
is for all value of the real property to pass to my residue heir subject
only to this limited right to occupy which has no market value, for the
full value of the property to be preserved for the residue heir, at
occupant's expense during occupancy, and without any financial burden on my
estate or residue heir during occupancy.

                right to occupy is not exclusive as against the estate (not
residue heir) retains rights to enter and inspect to the same extent as a
tenant-in-common, and estate may store tangible personal property that
belonged to decedent at time of death until probate is closed.

                right to occupy belongs to X only and may not be extended
to any overnight guests for longer than seven (7) days out of any six (6)
week period; provided, X may have a paid in-home licensed and certified
caregiver

                occupancy defined as: actually occupying the home on an
overnight basis for at least five weeks out of every ten weeks [except
winter snowbird? except up to 90 days if hospitalized or in convalescent
care?].

                estate has a right to maintain exterior surveillance
cameras and other equipment to keep house secure and monitored.

                must pay for reasonable maintenance and repair.

                must pay all property taxes when due.

                must pay all utilities when due.

                must pay for and maintain homeowner insurance for full
replacement value of the house, naming residue heir as insured; shall cover
for fire, and flooding if necessary, but not responsible for earthquake
coverage; shall include inflation rider to maintain full coverage; occupant
to select the company with residue heir's approval, which approval shall
not be unreasonably withheld.

                residue heir has right to direct access to and
communication with insurer

                must pay mortgage?

                if estate has insufficient other assets to pay all costs of
administration and lawful claims against the estate, then estate may sell
the house and substitute a gift to occupant calculated as $X per year by
actuarial table of occupant's life.

                residue heir to have right to routinely inspect the
property no more often than semi-annually upon 48' hrs notice to occupant,
and additional right to enter at any time without notice in emergency to
preserve property value

                residue heir right to receive annual accounting relating to
payments, maintenance and repair

                notice of default and opportunity to cure, residue heir to
have right to issue

                residue heir to have right to use unlawful detainer
procedure for failure to meet requirements, award of atty fees to
prevailing party

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1417 31st Ave South

Seattle WA  98144-3909

phone 206-625-0092

fax 206-625-9040

*From:* wsbarp-bounces at lists.wsbarppt.com [
mailto:wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>]
*On Behalf Of *Rebecca King
*Sent:* Wednesday, August 21, 2019 12:59 PM
*To:* WSBA Real Property Listserv
*Subject:* Re: [WSBARP] Life estate upon death of grantor

Timothy,

We have done a “House Trust” for these types of situations that outlines
everything from who pays the taxes and maintenance on the property while
the sister is living there to what constitutes “vacating” the property.
The Trust could be an RLT or a Testamentary Trust in the client’s Will.

Warmest regards,

Rebecca King

Attorney

*Northwest Elder Law Group*

2150 N. 107th Street, Suite 501

Seattle, WA 98133

Main: (206) 937-6102

Direct Line and Fax: (206) 866-6544

*Providing Services in Elder Law*

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*From:* wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
*On Behalf Of *Timothy Lehr
*Sent:* Wednesday, August 21, 2019 12:30 PM
*To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
*Subject:* [WSBARP] Life estate upon death of grantor

All,

Client is widowed and has two children and currently owns property solely
in her name. Has a sister living with her on the property. We previously
recorded a TODD per her wishes ensuring the property passes equally to the
two children outside of probate. Now, she wants to ensure the sister can
live on property until she passes or voluntarily decides to leave – even
after property transfers to two children.

First idea that I had and we discussed was granting a life estate in favor
of sister. My understanding is that at client’s death, property would
transfer via TODD to the two children and they would take “subject to the
life estate”. However, client does not want to give sister a present
interest of a life estate in case there is a falling out between client and
sister and sister exercises right to possession of property during her
lifetime.

My question – could client deed property to herself and create a “future”
life estate for sister. (I think back to Property class in law school).
Draft a deed that gives sister a life estate “at the time of
grantor/grantee’s death” with a reversionary interest to the two children?
Or something to that effect. Her main goal is having property pass to the
two children while allowing sister to remain on the property until sister
passes away or leaves, but she does not want to give a present interest in
property to sister. I may be thinking too far into this.

Thanks,

*Timothy C. Lehr*

Attorney at Law

Stiles Law Inc., P.S.

p:   360.855.0131

e:   timothy at stileslaw.com

w:  www.stileslaw.com

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