[WSBARP] Life estate upon death of grantor
Eric Nelsen
Eric at sayrelawoffices.com
Thu Aug 22 10:02:44 PDT 2019
Great point Tom--I'm adding "specify scope of mandatory repair and maintenance" to my list!
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] On Behalf Of Tom Westbrook
Sent: Thursday, August 22, 2019 7:57 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Life estate upon death of grantor
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.
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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> [mailto: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<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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<mailto:timothy at stileslaw.com>
w: www.stileslaw.com<http://www.stileslaw.com>
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