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lsuillini

Can I create a life estate for my stepmother after my father's death

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My father passed away recently with a will that gave me (only child) everything except a specific sum of money to my stepmother as prescribed in both the will and their prenup. 

 

My stepmother is not wealthy and her children don't have the means to support her. For whatever reason, my father did not create a Life Estate allowing her to live in his home after his death. To clarify, he owned the home, she did not pay for anything in the 5 years in which they were married.

 

Can I create a Life Estate to allow her to live in the home during probate? Ideally, we would sell my father's house and buy her something smaller, in the same state but closer to her kids. 

 

Alternatively, since all the assets are mine except for the sum she received as her prenup, can I as the executor give her additional funds so that she can buy a house?

 

A third alternative is I could gift her the annual limit (I think its 15k) for several years while she pays a mortgage. 

 

She was very good to my father and took wonderful care of him at the end, I want to make sure she has a safe, comfortable place to live.

 

Thanks-

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5 minutes ago, lsuillini said:

Can I create a Life Estate to allow her to live in the home during probate?

 

Your post provides no information that would allow anyone to answer this question.  Please provide the following information:

 

1. The state in which the property is located.

2. Whose name(s) is/are on the title for the property?

3. When did your father die?

4. Has probate been opened?  If so, whom did the court appoint to serve as executor?

 

 

Also, when you say "[l]ife [e]state to allow her to live in the home during probate," you're saying two different things.  A life estate would give her exclusive possession of the property as long as she lives (or, the life estate could be measured by someone else's life, but that would be rather uncommon).  Most probates take anywhere from 6 months to a couple years to conclude, so the difference between "until she dies" and "until probate is done" could be a significant amount of time.

 

 

10 minutes ago, lsuillini said:

Ideally, we would sell my father's house and buy her something smaller, in the same state but closer to her kids.

 

Does "we" mean you and your stepmother?

 

Your other questions also depend on the above info, so I'll wait for you to provide additional info before saying more.

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4 minutes ago, pg1067 said:

See my responses in bold. Thanks!

 

4 minutes ago, pg1067 said:

Your post provides no information that would allow anyone to answer this question.  Please provide the following information:

 

1. The state in which the property is located. Tennessee

2. Whose name(s) is/are on the title for the property? Only my father's

3. When did your father die? Last week

4. Has probate been opened?  If so, whom did the court appoint to serve as executor? No and No. I plan to meet with an attorney that specializes in estates next week doing anything as I'm unclear how the process works. This doesn't seem like a DIY area for me.

 

 

Also, when you say "[l]ife [e]state to allow her to live in the home during probate," you're saying two different things.  A life estate would give her exclusive possession of the property as long as she lives (or, the life estate could be measured by someone else's life, but that would be rather uncommon).  Most probates take anywhere from 6 months to a couple years to conclude, so the difference between "until she dies" and "until probate is done" could be a significant amount of time. I meant can we create one now so that she can live there until she dies or doesn't want to anymore.

 

 

 

Does "we" mean you and your stepmother? We means my wife and I. I'd be fine if she wanted to stay in the house, but its a lot for 1 person and I think she'd be happier in a smaller house/condo near her children. I wanted to have an idea of what is possible before we discuss options with her. For now, she's living in my father's home.

 

Your other questions also depend on the above info, so I'll wait for you to provide additional info before saying more.

 

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When your father died his estate took control of his probate assets. Since he had a will, that will determines who gets the various probate assets that he has. You are evidently going to get the house once probate is done, assuming it doesn't need to be sold to pay bills of the estate. Your step-mother is the only one who inherits anything, a bit of cash.

 

Now, if  your step-mother did not like this outcome she could either (1) take the elective share of the estate that Tennessee law allows her to claim, which is 20% of the net estate for a five year marriage, or (2) she could contest the will (if she had any grounds for it) which, if successful, would mean the will gets tossed out and the intestate succession law would apply instead. Under intestacy, since your father had living descendants, she would get one-third of the estate and his descendants would split the other two-thirds.

 

Assuming that she does not want to do either of those and the will is probated without a problem, then you end up with the house. You are also the executor of the estate. No one else other than your step-mother has an interest in the estate. So what you do with the house is up to you. While you could give her a life estate in it, that is really not necessary and may complicate things more than you'd like. Since it's your house, you may let her live there for as long as you want. No life estate is needed for that.  If you want to get her a place nearer her kids, you are free to sell the house and buy a new one closer and let her live there as long as you wish, too.

 

While you could give her the sales proceeds so she can buy the new house or buy the new house and give that to her, both would result in gifts to her from you and that would have a federal gift tax impact for you.  It might also mean the house gets lost to Medicaid later should she need Medicaid assistance later for nursing care or gets lost to pay medical bills that weren't covered by medicare or other insurance.

 

You could give her gifts of $15,000/year without any gift tax impact (note that the $15,000 is the total of ALL gifts during the year, including birthday and holiday gifts, etc. You'd need to ensure that the total of everything does not exceed the $15,000). But would she qualify for a mortgage on her own at decent rates? And again, the home would be vulnerable to any debts she has, like medical bills or medicaid reimbursement.

 

Consulting an estate planning/elder law attorney might be a good idea.

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