Inheritance and Property Rights/Inherited property

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QUESTION: The story is my 3 siblings and I (we live in 4 separate states) own a townhome in Wisconsin our father left us. He did it under the stipulation his surviving wife could live there as long as she wanted. This was in 2000. She has informed us she is on a list to get an apt. at a certain senior living building. There is no timetable for her to move out altho she said when the time came she was definitely going to be moving.

At the time the lawyer who handled our father's estate filed a 'termination of interest' with the county allowing her to stay and said when the time came we'd have to file another one where she relinquished her right to stay there any longer.

After talking to the Register of Deeds for the county and several other people I have gotten nowhere in figuring out what steps we need to take. It probably is not hard, but I simply have no idea what I need to do. Any thoughts would be appreciated.

Thanx, Dan

ANSWER: Dan -- this should be an easy fix but it depends on whether, once she moves out, she wants to rent the place out & keep the rent.  Without seeing the document your father signed I can't say for sure if she has that right.

If she does have a no-strings-attached life estate, not conditioned on her living there, then she could rent it out & keep the rent.  On the other hand she might not want to do that, even if she could and will relinquish upon leaving.

On the other hand, if the original document say she has the right to live there, only, then if she moves out her interest terminates.

In either event, if she moves out and doesn't want the hassles of collecting rent, doing repairs, getting calls at 3AM about a toilet that's backed up, then she can relinquish her life estate interest, now, and you can decide what to do next.

I would recommend you and your siblings put that property into a single asset Illinois Land trust immediately upon the lady relinquishing her interest, whether you keep it or sell it.

We do those trusts from here for properties nationwide.  As I recall Wisconsin has a pretty hefty transfer fee when deeds are recorded but it's worth it.

Also, make positive sure that if the lady reliquishes her rights to the property under either scenario, that she get independent legal advice without any of you present, so it's determined that this is really what she wants.

Otherwise it's likely that her blood relatives (if there are any) or do-gooders at the apartment complex that tell her she got screwed over and cause trouble.  This is insulation to keep that from happening or "I didn't understand all this/I'm just an old lady" type crap that is typically pulled at the urging of blood relatives or assorted busy-bodies.  It's far better to have this done ahead of time.  It won't guarantee no legal action but it sure helps your case.

Good luck!

Lee



---------- FOLLOW-UP ----------

QUESTION: Lee,

Thanx for the reply. After talking to her again today I'm 100% certain there are going to be no issues arising from her possibly making a claim of any kind. So that is how I am going to go forward. If that does happen, then we'll deal with it but I want to find out what the best and easiest course of action is assuming that is not going to be an issue.

You didn't mention anything specific we need to do other than an Illinois Land Trust, but you don't say what that is why we would need it. Again, I am going under the assumption there are going to be no claims going forward.

So any specific forms or procedures you know of we have to do or where we can simply get this info would be appreciated.

I think this is probably not complicated but eventually we need to know exactly what to do.

ANSWER: Dan -- the trust is a probate avoidance tool and takes the place of a will as to this property. When you have multiple owners, it's best that one individual drive the bus, the trustee;  but with the Ill. land trust, the trustee does what he or she is told to do by the beneficiaries, not the other way around.  Also, a side effect is it eliminates the beneficiaries' liability for anything the property owner is responsible for, such as a fire perhaps that burns down adjacent homes and the damages are more than the owner is insured for.

If there's a million dollar uninsured claim against the property owners for example, with four owners on the deed as tenants in common or joint tenants, four pockets to pick;  Illinois land trust as the owner, the sole asset is the property and its insurance as the trustee is not personally liable and the beneficiaries are "layered" away from direct ownership thus no liability there either.

Back to your original question - I can't really give you specific advise without seeing the "set up" document that granted the lady her rights in the property.  If you'd like to send that to me off line I'll look at and respond -- we need a pdf type file.  Steinway at reagan dot com.

Also FYI it normally isn't the person with the rights that causes trouble, it's her blood relatives that egg her on about getting cheated or whatever, telling her she was "confused" and "didn't understand" what was going on, whether that's the case or not.  Usually "not".  

My earlier suggestions were to head such nonsense off before it even starts.  It's far more expensive after a fight breaks out, believe me.

Lee

---------- FOLLOW-UP ----------

QUESTION: Lee,

Sorry for my delay in getting back to you. I have been mostly working with my sister on this and when I could not send you the documents I asked her to. She 'does not feel comfortable with that' for some unknown reason. It just points out the main issue I am afraid of. It isn't my Dad's widow's family I am worried about, it is my own. To say we have different ideas of the 'right way' to do things and how to do them is an understatement. So for now I am stuck again.

I appreciate the time and help.

Thanx, Dan

Answer
Dan -- the push-back/discomfort might be in sharing with me the particulars of who and where -- I do not need that;  feel free to black out names, addresses and ANY identifiers if you want me to look at the originating document.  It's not like I chase people down and make them buy services from us -- but if I have no way of knowing who/where/what, that's just plain impossible.

The magic words will be how her rights are defined in the document and only then can you get good advice on what everyone's rights are.

Otherwise, whoever you talk to, like me, is guessing at what the document says and giving you what-if advice based on guesswork -- which is never good.

So my offer still stands.  We don't use, sell, rent, steal, borrow or anything else with your contact information just to make that clear as well.

Let me know if I can help further.

Good luck,

Lee

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LEE HORNER ESQ.

Expertise

Probate estate and trust questions regarding California and Arizona estates.

Experience

I've been practicing real estate, probate estate and trust law in California since 1985 and in Arizona since 2005. I do NOT do homework questions. I am unable to advise on questions involving the laws of other states.

Organizations
Arizona and California State Bar Associations and the Ninth Circuit Court of Appeals.

Education/Credentials
Business degree from the University of New Mexico Juris Doctorate from Lincoln Law School of Sacramento, CA

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