[WSBARP] Transfer of remainder interest.

[Craig Gourley]

Thank you Rebecca,  I am working ion concert with the life estate holder's elder law attorney.

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of RebeccaWiess
Sent: Tuesday, January 22, 2019 11:49 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Transfer of remainder interest.

One warning on life estates - if there is Medicaid involved, now or later, the State may have issues with a transferred remainder interest. This is not a treatise on the topic, just a notice to proceed carefully in this area.


Rebecca K. Wiess
421 24th Avenue East
Seattle, WA  98112
Phone 206 329-6638
rwiess at foxinternet.net<mailto:rwiess at foxinternet.net>
________________________________
From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Craig Gourley
Sent: Tuesday, January 22, 2019 10:25 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Transfer of remainder interest.

Thanks Dwight, you have confirmed my presumptions.
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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 Bickel, Dwight <Dwight.Bickel at fntg.com<mailto:Dwight.Bickel at fntg.com>>
Sent: Tuesday, January 22, 2019 10:08:43 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Transfer of remainder interest.

We have to start with definitions. The remainder interest in property is the rights of possession after expiration of someone else's life estate. The usual severance is by deed from A, owner of the fee estate, to A for life then to B.  A holds the life estate, and upon its expiration A has no interest in the land. Upon A's death, B becomes the fee owner without limitation.

Your question was the ability to transfer the remainder estate. In that scenario, the remainder estate is the rights held by B during the life of A. No possession rights, but a presently vested right to the full ownership at the death of A. That severed estate in the title can be conveyed by B to an LLC during A's life without affecting the severed estates in any way, neither the life estate or the remainder interest.

Of course an LLC cannot hold a life estate; only a natural person has a life that can be the basis of a life estate. But an LLC can hold ownership of that severed title to A's life estate. It is called a life estate pur autre vie<https://www.merriam-webster.com/legal/pur%20autre%20vie>. During A's life, that existing life estate can be transferred to another person, or to an LLC, without affecting the life estate or the remainder interest. The LLC holds the possession during the lifetime of A. Upon A's death, that estate is extinguished and B owns the full fee estate.

Call if you have any questions. Title companies are familiar with this and can provide title insurance upon a severed estate without joinder of the other interest. I provided a mortgage title policy for $300,000 granted by life estate borrower without joinder. The bank understood that its mortgage ceased upon the death of its borrower and was relying upon alternative credit.

Dwight A. Bickel
Regional Counsel
Fidelity National Title Group
701 - 5th Avenue, Suite 2700
Seattle, WA 98104
Phone: (206) 370-3189
E-mail: Dwight.Bickel at fntg.com<mailto:Dwight.Bickel at fntg.com>

Behalf Of Craig Gourley
Listmates,  During the holidays I posted a query but don't recall any responses, or maybe I just don't recall them!  Client wants to transfer their remainder interest in a life estate to an LLC.  I can't think of a reason why not but have never done it before.  Anyone think of a reason why this cannot or should not be done?   Thanks!!  Craig

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