Dad wants Wife to live in house left to me and sister after he passes

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
rooms222
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by rooms222 »

mouth wrote: Fri Jun 18, 2021 12:07 pm :D the reason for that chat is that he wanted to copy me on a chat he had with NoLo. That didn't work; it just invited me to a blank chat. But the important thing is ...

he's now going to talk to an estate lawyer in the next few days. WIN!!!!

He saw the link about the Elective Shares Statute and it really kicked him into action.

Thank you so much Rooms22 ... you may have just literally saved me and my family a ton of stress drama and heartache :sharebeer
You are welcome. Happy Juneteenth!
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

rooms222 wrote: Fri Jun 18, 2021 12:32 pm You are welcome. Happy Juneteenth!
Happy Juneteenth to you as well!

EDIT TO ADD: Thank you Mako as well who first mentioned the Elective Shares Statute!!
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Broken Man 1999 »

mouth wrote: Fri Jun 18, 2021 11:12 am
Dottie57 wrote: Fri Jun 18, 2021 9:49 am Has your Dad asked his wife what she would want? Does she want the house?

All I can say after reading the thread - I am glad I am not a wife with a husband who has this plan. I realize that have not been married for decades, but still..
Wife has expressed two things; first that she's worried about where she will live when he dies and second that she would like to live in that house.

I know this might be controversial, but to my mind, my sister's mind, and most important my father's mind, she has no claim to the house. She wasn't there when it was bought, contributes nothing financial to the houses upkeep, and there is some "drama" between Dad and Wife related to a "walk out event" that contributes to his state of mind and trust issues with her and her family. What's more, and this dips a toe into family history I'll only briefly discuss, the house was bought with proceeds from the sale of a home owned originally by my mother's father, then my mother, and which our mother's first will left to my sister and I but was changed at the insistence of our father while she was on her death bed from breast cancer. My sister has some emotions on this topic that I lack, but I'll have to deal with if we find ourselves needing to consider disclaiming the house.

Reasonable people can totally debate, outside issues of "the house", my father's moral obligation to have his wife cared for after his death. Right, wrong, or indifferent, he has decided she deserves to live in the house near cost free, but that he's not willing to put any funds into her control because he believes it will just end up in Son's hands.

Addition to my above post: I've also suggested to my father that he consider putting the house into a trust with me as successor to avoid any risks of the house being in probate. We'll see if he bites. The link was from NoLo so maybe he'll consider it. NC doesn't allow TOD deeds unfortunately so the answer is a trust.
Despite you stating your step-mother has no claim on the house, neither do you or your sister. Your father has chosen to marry her and seems intent to not have her removed from the residence after his death.

Frankly, I hope your father prevents this from happening to her.

Broken Man 1999
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texasdiver
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by texasdiver »

Correct me if I'm wrong about this. But isn't it true that:

1. If the wife inherits the house directly then the inheritance transfer is completely tax free, BUT

2. If the son and daughter inherit the house and later gift it to the wife to wash their hands of the mess, she will owe substantial gift taxes on the exchange for everything over $30,000 in value ($15,000 for the son's share and $15,000 for the daughter's share).
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Petrocelli »

JonnyDVM wrote: Thu Jun 17, 2021 11:49 am
Petrocelli wrote: Thu Jun 17, 2021 9:28 am I just finished a dispute involving a life estate that lasted over a decade, so listen up...

My wife's stepfather named her as a beneficiary of his trust. (For those of you in the know, it was this trust that bought the $5,000 watch, but that's another story...)

The trust included a factory that one of the brothers was leasing from his father. The trust terms stipulated that one of the brothers could lease the factory at fair market value as long as he operated his company there. FMV would be set by the Trustee, his brother.

The trustee brother set the lease price at about $10,000 a month. The lessor brother complained that was too high, and that lead to a series of lawsuits where the Court appointed an independent trustee to set the rent. The independent trustee concluded the rent was to low, and set the rent at around $17,000. This lead to another series of lawsuits which cost around $250,000

The lessor brother then complained that the property was contaminated. He claimed his father had contaminated the property when the property was worth less rent because of that. This lead to a series of tests and remediation which cost about $250,000.

The brother then stopped paying rent. This lead to another series of lawsuits. That probably cost around another $100,000.

Finally, the lessor brother gave up. Last year, we sold that property and an adjacent property with 20 commercial units (which is located at the junction of the 405 and 101 Freeway in Los Angeles) for $6.6 million, but not after spending about $750,000 on lawyers and professionals.

So my advice is to DISENTANGLE YOURSELF FROM EACH OTHER AS SOON AS POSSIBLE!
That’s a crazy story. Brother cost the estate 3/4 of a million for no reason whatsoever.
Yes. If I learned one thing from this decade-long experience is that people involved in will contests often do not behave rationally.

To the OP: a life estate is a problem in and of itself. A life estate with a restriction on the wife's son's ability to use the property is an invitation to a lawsuit.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Broken Man 1999 wrote: Fri Jun 18, 2021 1:01 pm
mouth wrote: Fri Jun 18, 2021 11:12 am
Dottie57 wrote: Fri Jun 18, 2021 9:49 am Has your Dad asked his wife what she would want? Does she want the house?

All I can say after reading the thread - I am glad I am not a wife with a husband who has this plan. I realize that have not been married for decades, but still..
Wife has expressed two things; first that she's worried about where she will live when he dies and second that she would like to live in that house.

I know this might be controversial, but to my mind, my sister's mind, and most important my father's mind, she has no claim to the house. She wasn't there when it was bought, contributes nothing financial to the houses upkeep, and there is some "drama" between Dad and Wife related to a "walk out event" that contributes to his state of mind and trust issues with her and her family. What's more, and this dips a toe into family history I'll only briefly discuss, the house was bought with proceeds from the sale of a home owned originally by my mother's father, then my mother, and which our mother's first will left to my sister and I but was changed at the insistence of our father while she was on her death bed from breast cancer. My sister has some emotions on this topic that I lack, but I'll have to deal with if we find ourselves needing to consider disclaiming the house.

Reasonable people can totally debate, outside issues of "the house", my father's moral obligation to have his wife cared for after his death. Right, wrong, or indifferent, he has decided she deserves to live in the house near cost free, but that he's not willing to put any funds into her control because he believes it will just end up in Son's hands.

Addition to my above post: I've also suggested to my father that he consider putting the house into a trust with me as successor to avoid any risks of the house being in probate. We'll see if he bites. The link was from NoLo so maybe he'll consider it. NC doesn't allow TOD deeds unfortunately so the answer is a trust.
Despite you stating your step-mother has no claim on the house, neither do you or your sister. Your father has chosen to marry her and seems intent to not have her removed from the residence after his death.

Frankly, I hope your father prevents this from happening to her.

Broken Man 1999
Hi Broken Man 1999 and thank you for your perspective. The question of "claim" is clearly a philosophical issue/debate you and I (and my father and sister) will disagree on. At this point the only person who's opinion matters is his and if he decides his children have claim then that's that. Hopefully we can move on from that line of discussion since it rarely ends in a good place. There are of course objective legal statutes that might force his hand [shrug] and those are some of the questions I'm eager to discuss, or actually for him and a lawyer to discuss.

As for preventing his Wife from being removed from the house I will say this as clearly as I can: I have no intent nor desire to do that. That is his prime directive that she gets to stay there and I have every intent to honor that. More so, I agree that it would be really horrible to kick her out. My sister agrees with at least those two statements as well.

All other discussion is driven by My prime directive which is that I want it to happen with as little drama, stress, and bluntly effort as possible on my part.

The confounding factor here is the son. I will give no ground on the idea that my father is right to seek methods to prevent money flowing to him given his history. HOWEVER, the practicality of ensuring that is an entirely different matter and I am reluctantly being placed in a position to enforce that as a trustee. I would much prefer that Wife just be given whatever the effective value would be of my father's schemes and I walk away. Maybe that means she gets the house and sister and I get the pot of money intended for the trust; the delta on those values being the price we pay to walk away. Whatever happens to her, her son, and the rest of her family is no concern of mine. I harbor no ill will, but I have no connection with them, and have no desire to maintain a connection either.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

texasdiver wrote: Fri Jun 18, 2021 1:22 pm Correct me if I'm wrong about this. But isn't it true that:

1. If the wife inherits the house directly then the inheritance transfer is completely tax free, BUT

2. If the son and daughter inherit the house and later gift it to the wife to wash their hands of the mess, she will owe substantial gift taxes on the exchange for everything over $30,000 in value ($15,000 for the son's share and $15,000 for the daughter's share).
Those are great points. And if that line of thinking can turn my father's mind away from his schemes that's great. But given his intent to not put money within reach of the son it's unlikely. Then the tax concerns become part of the consideration of how to balance her staying in the house (a given) with my desire to make a clean break (the variable).

EDIT TO ADD: I think the way the taxes are avoided is for me and my sister to disclaim the inheritance of the house. Pending anything else crazy in NC law, the house should go to Wife as if sister and I were never in line and I would think that maintains the tax free transfer. A good question would be what happens with the trust and the funds in it as it will likely be set up in Wife's name and me as the trustee. If we're debating quid pro quo then that should come to use but how to make it happen [shrug]
Last edited by mouth on Fri Jun 18, 2021 3:31 pm, edited 1 time in total.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Petrocelli wrote: Fri Jun 18, 2021 2:28 pm To the OP: a life estate is a problem in and of itself. A life estate with a restriction on the wife's son's ability to use the property is an invitation to a lawsuit.
The good news is that since my first post that restriction is now gone per my phone call with him last night [phew].

Now the restriction is limited to keep funds structurally out of son's reach. For the time being that means wife doesn't get the house (son could extract money out of it and leave her in debt) and a trust is set up to to pay expenses related to the house with me as the executor.

That can all completely change now that Dad's plan includes speaking with an estate attorney [another phew] who might present him with objective non-emotional alternatives along with the pitfalls of his current course of action. If that results in her getting the house outright and I get to walk away I have no problem with that whatsoever.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by cchrissyy »

texasdiver wrote: Fri Jun 18, 2021 1:22 pm Correct me if I'm wrong about this. But isn't it true that:

1. If the wife inherits the house directly then the inheritance transfer is completely tax free, BUT

2. If the son and daughter inherit the house and later gift it to the wife to wash their hands of the mess, she will owe substantial gift taxes on the exchange for everything over $30,000 in value ($15,000 for the son's share and $15,000 for the daughter's share).
OP and the dad should absolutely ask a lawyer about that

but no, in no case is there such thing as a gift tax where the OP or the widow would have to pay. honestly this misconception comes up so frequently i think the site ought to have a link to quickly clear it up every time somebody expresses that they can't or shouldn't give more than 15k.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Pu239 »

Gift tax:
1) it is my understanding that recipients never have to pay a tax;
2) Gifts are taxable to the donor only if the estate exceeds $11 million.

For gifts over $15k/year, additional income tax reporting requirements apply. Under current law, the great majority of donors never have to pay gift tax,
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by texasdiver »

Pu239 wrote: Fri Jun 18, 2021 4:26 pm Gift tax:
1) it is my understanding that recipients never have to pay a tax;
2) Gifts are taxable to the donor only if the estate exceeds $11 million.

For gifts over $15k/year, additional income tax reporting requirements apply. Under current law, the great majority of donors never have to pay gift tax,
But in this case we aren't talking about an inheritance at all.

OP and his daughter inherit the house. It is theirs. A few years later they decide to give it to the wife because the hassles of owning it long distance while she is living there are just too much to deal with. The wife isn't inheriting anything and there is no estate. Son and daughter are still alive. They are just giving her the house as a gift.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by ChrisC »

mouth wrote: Fri Jun 18, 2021 12:07 pm :D the reason for that chat is that he wanted to copy me on a chat he had with NoLo. That didn't work; it just invited me to a blank chat. But the important thing is ...

he's now going to talk to an estate lawyer in the next few days. WIN!!!!

He saw the link about the Elective Shares Statute and it really kicked him into action.

Thank you so much Rooms22 ... you may have just literally saved me and my family a ton of stress drama and heartache :sharebeer
Didn't you earlier say there's a pre-nup involved here? If that is the case, you have a more complicated situation especially if the pre-nup only addresses limited assets owned by your Dad that wind up in his estate at death. It could be that a broad pre-nup could trump the statutory elective share rights that a spouse might have in NC. Consult a competent NC lawyer knowledgeable about estate law.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by texasdiver »

mouth wrote: Fri Jun 18, 2021 2:53 pmThe confounding factor here is the son. I will give no ground on the idea that my father is right to seek methods to prevent money flowing to him given his history. HOWEVER, the practicality of ensuring that is an entirely different matter and I am reluctantly being placed in a position to enforce that as a trustee. I would much prefer that Wife just be given whatever the effective value would be of my father's schemes and I walk away. Maybe that means she gets the house and sister and I get the pot of money intended for the trust; the delta on those values being the price we pay to walk away. Whatever happens to her, her son, and the rest of her family is no concern of mine. I harbor no ill will, but I have no connection with them, and have no desire to maintain a connection either.
It would seem like the most iron-clad way to do that would be to specify that the wife receive her inheritance in the form of an annuity. It will provide her with income for the remainder of her life but will vanish upon her death leaving no sum for the son to inherit. I don't know if is possible to specify that an inheritance take that form. But that would seem to accomplish the objective. The son might still mooch off his mother when she is alive. But he has no way to take the money or inherit it when she dies.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

texasdiver wrote: Fri Jun 18, 2021 4:54 pm
Pu239 wrote: Fri Jun 18, 2021 4:26 pm Gift tax:
1) it is my understanding that recipients never have to pay a tax;
2) Gifts are taxable to the donor only if the estate exceeds $11 million.

For gifts over $15k/year, additional income tax reporting requirements apply. Under current law, the great majority of donors never have to pay gift tax,
But in this case we aren't talking about an inheritance at all.

OP and his daughter inherit the house. It is theirs. A few years later they decide to give it to the wife because the hassles of owning it long distance while she is living there are just too much to deal with. The wife isn't inheriting anything and there is no estate. Son and daughter are still alive. They are just giving her the house as a gift.
OP and sister ... we're not THAT kind of family ;-)
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

ChrisC wrote: Fri Jun 18, 2021 5:01 pm
mouth wrote: Fri Jun 18, 2021 12:07 pm :D the reason for that chat is that he wanted to copy me on a chat he had with NoLo. That didn't work; it just invited me to a blank chat. But the important thing is ...

he's now going to talk to an estate lawyer in the next few days. WIN!!!!

He saw the link about the Elective Shares Statute and it really kicked him into action.

Thank you so much Rooms22 ... you may have just literally saved me and my family a ton of stress drama and heartache :sharebeer
Didn't you earlier say there's a pre-nup involved here? If that is the case, you have a more complicated situation especially if the pre-nup only addresses limited assets owned by your Dad that wind up in his estate at death. It could be that a broad pre-nup could trump the statutory elective share rights that a spouse might have in NC. Consult a competent NC lawyer knowledgeable about estate law.
Chris, you are 100% correct. Thank you. Luckily Dad has seen the light and started the process to obtain professional legal advice. Beyond answering some questions / retorting comment I'll have nothing substantive to add until I hear the results of that consultation.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by afan »

mouth wrote: Fri Jun 18, 2021 3:14 pm
Petrocelli wrote: Fri Jun 18, 2021 2:28 pm To the OP: a life estate is a problem in and of itself. A life estate with a restriction on the wife's son's ability to use the property is an invitation to a lawsuit.
The good news is that since my first post that restriction is now gone per my phone call with him last night [phew].

Now the restriction is limited to keep funds structurally out of son's reach. For the time being that means wife doesn't get the house (son could extract money out of it and leave her in debt) and a trust is set up to to pay expenses related to the house with me as the executor.

That can all completely change now that Dad's plan includes speaking with an estate attorney [another phew] who might present him with objective non-emotional alternatives along with the pitfalls of his current course of action. If that results in her getting the house outright and I get to walk away I have no problem with that whatsoever.
That would be the easiest solution but I thought your sister needed the money? Or in this case, the proceeds from the house sale after the wife passes.

Leave the house and the money in a trust with you as the trustee and you and your sister as the remainder people. That means the two of you get nothing until the wife passes. Then you can sell the house and distribute that money along with whatever is left in the trust.
From the sound of it, there is a good chance the son will move in while the wife is there, but if so, will have to leave when the house is being sold.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

texasdiver wrote: Fri Jun 18, 2021 5:04 pm
mouth wrote: Fri Jun 18, 2021 2:53 pmThe confounding factor here is the son. I will give no ground on the idea that my father is right to seek methods to prevent money flowing to him given his history. HOWEVER, the practicality of ensuring that is an entirely different matter and I am reluctantly being placed in a position to enforce that as a trustee. I would much prefer that Wife just be given whatever the effective value would be of my father's schemes and I walk away. Maybe that means she gets the house and sister and I get the pot of money intended for the trust; the delta on those values being the price we pay to walk away. Whatever happens to her, her son, and the rest of her family is no concern of mine. I harbor no ill will, but I have no connection with them, and have no desire to maintain a connection either.
It would seem like the most iron-clad way to do that would be to specify that the wife receive her inheritance in the form of an annuity. It will provide her with income for the remainder of her life but will vanish upon her death leaving no sum for the son to inherit. I don't know if is possible to specify that an inheritance take that form. But that would seem to accomplish the objective. The son might still mooch off his mother when she is alive. But he has no way to take the money or inherit it when she dies.
:oops: That is brilliant!!! why didn't I think of that? I do think Dad might still balk that son could still mooch (that is what he does now and what infuriates him) but it'll be a slow drip at least rather than convincing her to spend the entirety of $150k of proceeds from the sale of her condo in less than 2 years. Wife will also have a chance to realize she should only give him money she can afford to give him. History says she might not show that restraint, but 1) not my problem 2) again, it's a slow drip at least and she does have her own 401k balance and SS.

Vanishing after she dies would be seen as a benefit to my father for sure. But I know his real concern is protecting her from her son and he's trying to place me in that role :shock: :(

I wonder if the lawyer will suggest it. I'm going to stay silent for now both out of respect to this being my father's choice to make and because I know his reaction to ideas that aren't his own.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by DidItMyWay »

That's great that you were able to hash a lot of it out in a conversation with your dad and that it sounds like he will get some legal counsel as well.

Beause I haven't seen it mentioned here by you in the context of your conversation with your dad, what would be the stipulations, if any, regarding his wife getting remarried? If she remarries, will she still be able to stay there? Would her new spouse be able to live in the house with her? Or if she had a boyfriend, would be he be allowed to live in the house with her? Just some things that you all may want to consider.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

afan wrote: Fri Jun 18, 2021 5:34 pm
mouth wrote: Fri Jun 18, 2021 3:14 pm
Petrocelli wrote: Fri Jun 18, 2021 2:28 pm To the OP: a life estate is a problem in and of itself. A life estate with a restriction on the wife's son's ability to use the property is an invitation to a lawsuit.
The good news is that since my first post that restriction is now gone per my phone call with him last night [phew].

Now the restriction is limited to keep funds structurally out of son's reach. For the time being that means wife doesn't get the house (son could extract money out of it and leave her in debt) and a trust is set up to to pay expenses related to the house with me as the executor.

That can all completely change now that Dad's plan includes speaking with an estate attorney [another phew] who might present him with objective non-emotional alternatives along with the pitfalls of his current course of action. If that results in her getting the house outright and I get to walk away I have no problem with that whatsoever.
That would be the easiest solution but I thought your sister needed the money? Or in this case, the proceeds from the house sale after the wife passes.

Leave the house and the money in a trust with you as the trustee and you and your sister as the remainder people. That means the two of you get nothing until the wife passes. Then you can sell the house and distribute that money along with whatever is left in the trust.
From the sound of it, there is a good chance the son will move in while the wife is there, but if so, will have to leave when the house is being sold.
While not nothing, the value of the house is only 22% of the total estate at current values and only half of that 22% would go to her. So there should be a fair bit for my sister.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

DidItMyWay wrote: Fri Jun 18, 2021 5:46 pm That's great that you were able to hash a lot of it out in a conversation with your dad and that it sounds like he will get some legal counsel as well.

Beause I haven't seen it mentioned here by you in the context of your conversation with your dad, what would be the stipulations, if any, regarding his wife getting remarried? If she remarries, will she still be able to stay there? Would her new spouse be able to live in the house with her? Or if she had a boyfriend, would be he be allowed to live in the house with her? Just some things that you all may want to consider.
Thanks DidItMyWay. It was a much more productive conversation than I thought possible given historical communication challenges between the two of us.

As with the son, short of legal marriage, that falls into that ugly area where I'm being asked to police her life and I'm flat out unwilling to perform that duty when the time comes. A legal marriage on the other hand would seem an obvious breach of terms if they are stated in the will. Personally I don't care and I won't bring it up with him unless he does. Even then, I'll demure and say I will honor his wishes whatever they are so long as they are clearly legally enforceable. If the will is silent on the matter I will be too. CAVEAT: unless there some risk new-husband could have some claim on the house. Then I'll be like Ripley in Aliens, "Nuke it from orbit, it's the only way to be sure" :twisted:
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by basspond »

We have a family friend who remarried after both of their spouses passed. Both sets of children were not happy. The man passed suddenly without a new will, within a year of being married and it was difficult for the survivors to handle the situation. Your dad is doing the right thing by expressing his thoughts but you have been lucky that nothing happened in those ten years. Tell your dad you want to do what he wants but that he needs to get it legalized as soon as possible, communicate to all involved, and explain to him that policing or complicated arrangements could put more burden on his grieving relatives.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by afan »

mouth wrote: Fri Jun 18, 2021 5:48 pm
afan wrote: Fri Jun 18, 2021 5:34 pm
mouth wrote: Fri Jun 18, 2021 3:14 pm
Petrocelli wrote: Fri Jun 18, 2021 2:28 pm To the OP: a life estate is a problem in and of itself. A life estate with a restriction on the wife's son's ability to use the property is an invitation to a lawsuit.
The good news is that since my first post that restriction is now gone per my phone call with him last night [phew].

Now the restriction is limited to keep funds structurally out of son's reach. For the time being that means wife doesn't get the house (son could extract money out of it and leave her in debt) and a trust is set up to to pay expenses related to the house with me as the executor.

That can all completely change now that Dad's plan includes speaking with an estate attorney [another phew] who might present him with objective non-emotional alternatives along with the pitfalls of his current course of action. If that results in her getting the house outright and I get to walk away I have no problem with that whatsoever.
That would be the easiest solution but I thought your sister needed the money? Or in this case, the proceeds from the house sale after the wife passes.

Leave the house and the money in a trust with you as the trustee and you and your sister as the remainder people. That means the two of you get nothing until the wife passes. Then you can sell the house and distribute that money along with whatever is left in the trust.
From the sound of it, there is a good chance the son will move in while the wife is there, but if so, will have to leave when the house is being sold.
While not nothing, the value of the house is only 22% of the total estate at current values and only half of that 22% would go to her. So there should be a fair bit for my sister.
That's great. How much of the estate will be needed to support the wife and maintain the house? Only half of what is left after those expenses will be available, eventually, to your sister.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
FoolStreet
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by FoolStreet »

Meg77 wrote: Wed Jun 16, 2021 9:17 am I haven't read all the responses, but this is a VERY typical and normal arrangement. She will simply have a "life estate" in the home which stipulates that she must actually live there and pay taxes and insurance and maintenance. When she dies - or moves out - the life estate is dissolved and the owners can sell, move in or rent the place out as they see fit.

Of course you would know if/when she dies because as the owner of the property you should do periodic checks to make sure it's occupied and well taken care of and that the bills are paid. Somewhat similar to a landlord/tenant relationship, you would have some rights if she were to totally abandon the terms of the life estate - including not keeping it up. Obviously evicting your ex-stepmother wouldn't be simple or advisable, but my point is you'd have options and also obligations as the owner.

As for her son, that's a tricky one. I don't think your dad has the right to dictate whether his wife takes on a roommate - or lover or houseguest or caretaker. Even if he tries to put that in the will, it's going to be impossible for you to monitor or to enforce that kind of clause. It's kind of like giving the silver set to you but saying your husband can't use it - whatever, lol. You can try to put parameters on gifts from beyond the grave, but without expensive trusts and diligent enforcers who love being mired in the legal system, it's all just words on a page at the end of thday.
What if she were to get sick and need nursing home care. What is normally done in those situations that you’ve had experience with?
Saving$
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Saving$ »

Your dad is trying to protect his wife from the shenanigan's of her own son. However, the reality is, the son can't get anything the wife does not give him. So your dad real issue is his wife's decisions. He does not like them. But he can't rule her decisions from the grave. And they are her wishes and her decisions. He needs to set her up to be comfortable, and let it go at that. If she lets her son beg borrow or steal that money and is thus no longer comfortable, that is on her, not on her son...
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celia
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by celia »

texasdiver wrote: Fri Jun 18, 2021 4:54 pm
Pu239 wrote: Fri Jun 18, 2021 4:26 pm Gift tax:
1) it is my understanding that recipients never have to pay a tax;
2) Gifts are taxable to the donor only if the estate exceeds $11 million.

For gifts over $15k/year, additional income tax reporting requirements apply. Under current law, the great majority of donors never have to pay gift tax,
But in this case we aren't talking about an inheritance at all.

OP and his daughter inherit the house. It is theirs. A few years later they decide to give it to the wife because the hassles of owning it long distance while she is living there are just too much to deal with. The wife isn't inheriting anything and there is no estate. Son and daughter are still alive. They are just giving her the house as a gift.
This still isn't correct, regarding the "gift tax". In the year the donor(s) gift more than $15K to a person, they report it on a tax form. Nothing happens until the donor dies. If the donor's estate is worth more than the estate tax exclusion (the amount not subject to estate taxes, currently $11.7M), the excess gifts (over $15K) are subtracted from the estate tax exclusion, meaning the donor's estate will have to pay estate taxes on more assets.

Since the house value is so much less than the estate tax exclusion, there is unlikely to be a problem for either donor (OP or OP's sister).


If OP and sister gift the house to the wife at some time, the wife (receiver) gets the same basis the donors had (step-up value from dad's date of death). If the receiver sells it*, they only pay taxes on the capital gains of the property sale (over and above the value on date of death). But if the receiver dies while still owning the house, it is stepped-up again.

* I suggest that whoever inherits the house get it officially appraised. That will be needed for determining the capital gains, if they do not live in the house for 2 of the previous 5 years before the sale.
Last edited by celia on Sat Jun 19, 2021 3:04 am, edited 2 times in total.
halfnine
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by halfnine »

mouth wrote: Fri Jun 18, 2021 5:55 pm
DidItMyWay wrote: Fri Jun 18, 2021 5:46 pm That's great that you were able to hash a lot of it out in a conversation with your dad and that it sounds like he will get some legal counsel as well.

Beause I haven't seen it mentioned here by you in the context of your conversation with your dad, what would be the stipulations, if any, regarding his wife getting remarried? If she remarries, will she still be able to stay there? Would her new spouse be able to live in the house with her? Or if she had a boyfriend, would be he be allowed to live in the house with her? Just some things that you all may want to consider.
Thanks DidItMyWay. It was a much more productive conversation than I thought possible given historical communication challenges between the two of us.

As with the son, short of legal marriage, that falls into that ugly area where I'm being asked to police her life and I'm flat out unwilling to perform that duty when the time comes. A legal marriage on the other hand would seem an obvious breach of terms if they are stated in the will. Personally I don't care and I won't bring it up with him unless he does. Even then, I'll demure and say I will honor his wishes whatever they are so long as they are clearly legally enforceable. If the will is silent on the matter I will be too. CAVEAT: unless there some risk new-husband could have some claim on the house. Then I'll be like Ripley in Aliens, "Nuke it from orbit, it's the only way to be sure" :twisted:
Better than the alternative, "Game over, man! Game over!"
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celia
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by celia »

mouth wrote: Fri Jun 18, 2021 7:51 am
  • He is going to go through the last few years of expenses, do some more thinking, and come up with a list of things to be paid for related to the house. Then he and I will go through that list together to hash out what's reasonable for Wife to pay for and what the 'account' I'll control will pay for. He'll share the list with Wife before finalizing the will to get her thoughts and ensure she's fully informed so there are no surprises after he passes. I thanked him for this and reminded him that I don't really care who pays for what so long as it's clearly stated in the will to avoid ambiguity...
I don't see how there's anyway to "split" unknown future expenses between what she pays and what a potential trust pays. Her health could deteriorate and she might need assisted living. Who do you think should pay for that? What if she needs expensive drugs in the future? What if she wants something that ends up being invented next year that costs more than her monthly income?
  • Wife has a ~400k 401(k) and $1900/m in SS. So she has cash flow to live on, minimal expenses, and a nest egg for future care. She also has other responsible family besides Son to provide emotional, physical, and financial support. I don't know / assume that $1900/m is her SS now. When he passes is there any reason she wouldn't also get something based on his SS???
I'll wager she also has a lot in taxable savings if your dad has been paying for most of the expenses. She has likely saved her income throughout her marriage to your dad, or already given some to her son, who will likely be her heir. There is nothing you can do about that, if that is her choice

Does the wife also have a will? Is your dad entitled to half of her assets if she dies first, or will your dad have to take her son to court? [Remember that a spouse is entitled to at least half the estate in NC.]

rooms222 wrote: Fri Jun 18, 2021 11:26 am Note also the the trustee must be "non-adversarial" and someone who is not ever benefiting from the trust.
Thank you for providing the state.
I only see one person in this saga who is not "benefiting" from your father's trust who could be a trustee.
Just saying...
:oops:
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

afan wrote: Fri Jun 18, 2021 7:11 pm
mouth wrote: Fri Jun 18, 2021 5:48 pm
While not nothing, the value of the house is only 22% of the total estate at current values and only half of that 22% would go to her. So there should be a fair bit for my sister.
That's great. How much of the estate will be needed to support the wife and maintain the house? Only half of what is left after those expenses will be available, eventually, to your sister.
A good question. When I spoke with him last, after the new info about the Elective Shares Statute, he had finished his "homework" coming up with a list of expenses (taxes, insurance, HOA, lawn maintenance, etc) and said $10-12K/y. I have no idea how many years he'd want to fund for, if he want it done as 'cash', or a 'endowment' using the 4% rule which would dictate the fund level. But to his mind he expects her to pay for her own personal expenses with the monies and cash flow she owns.

Not specifically for you afan, but I feel it's important to state that Wife is not penniless and at risk of being destitute, nor is she without familial support of her own (other than son). The main concern is housing as she sold her condo (about 8 years after they married) but spent the proceeds on son (totally her right, but it has consequences), and the fact that regardless, she would like to stay in the house she's lived in for 10 years, around the community she has come to know, and that's a totally legit and reasonable desire that my father wants to ensure.

So big picture I don't suspect it'll make that big of an impact. Then again, these are all little chips away at the pile and they add up. And there's still the question of what will come from his meeting with a lawyer and the Elective Shares Statute. I might find myself with much less than initially suspected [shrug] and sister with still more than she had been planning on because she had no idea / expected it to all be gone.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Saving$ wrote: Fri Jun 18, 2021 10:48 pm Your dad is trying to protect his wife from the shenanigan's of her own son. However, the reality is, the son can't get anything the wife does not give him. So your dad real issue is his wife's decisions. He does not like them. But he can't rule her decisions from the grave. And they are her wishes and her decisions. He needs to set her up to be comfortable, and let it go at that. If she lets her son beg borrow or steal that money and is thus no longer comfortable, that is on her, not on her son...
I 100% agree. Having that conversation however will be as pointless as it would be heated. That's what a lawyer is hopefully going to tell him and then counsel him on how to best ensure everyone gets what he wants everyone to get within the laws and statutes of NC law. Now if this was Bird Law we'd have an entirely different conversation ;-)
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

halfnine wrote: Sat Jun 19, 2021 2:52 am Better than the alternative, "Game over, man! Game over!"
You're my kinda person :sharebeer May he rest in peace.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

celia wrote: Sat Jun 19, 2021 3:50 am
mouth wrote: Fri Jun 18, 2021 7:51 am
  • He is going to go through the last few years of expenses, do some more thinking, and come up with a list of things to be paid for related to the house. Then he and I will go through that list together to hash out what's reasonable for Wife to pay for and what the 'account' I'll control will pay for. He'll share the list with Wife before finalizing the will to get her thoughts and ensure she's fully informed so there are no surprises after he passes. I thanked him for this and reminded him that I don't really care who pays for what so long as it's clearly stated in the will to avoid ambiguity...
I don't see how there's anyway to "split" unknown future expenses between what she pays and what a potential trust pays. Her health could deteriorate and she might need assisted living. Who do you think should pay for that? What if she needs expensive drugs in the future? What if she wants something that ends up being invented next year that costs more than her monthly income?
If it relates to the home, the trust will pay for it. Estimates can be made as to the costs and priced in and if there's money left over when she passes then it comes to sister and I (assuming it isn't set up as a marital trust with me as the trustee).

Right or wrong my father's current state of mind is that all those other non-house related expenses are for her to pay for. And as I mentioned above, she isn't without means nor familial support. Before they married she was a widow living a fully independent and sustainable life without my father and is capable of doing so after he passes.

I know those statements might rub some people the wrong way, but I would just remind folks that everyone's life experience, relationships, willingness to trust, and situations are different and we don't all live in the land of RomComs and The Notebook. Sometimes two people come together because they enjoy each other's company and don't want to die alone. More so, none of the major muscle movements I'm discussing are surprises to Wife; she already knows! This only all started as a tweak to an already existing Will that left her NOTHING (legal or not) and in fact was only intended to put in writing what my father told me 4 years ago, "you and your sister get everything, but I want Wife to live in the house until she passes"
  • Wife has a ~400k 401(k) and $1900/m in SS. So she has cash flow to live on, minimal expenses, and a nest egg for future care. She also has other responsible family besides Son to provide emotional, physical, and financial support. I don't know / assume that $1900/m is her SS now. When he passes is there any reason she wouldn't also get something based on his SS???
I'll wager she also has a lot in taxable savings if your dad has been paying for most of the expenses. She has likely saved her income throughout her marriage to your dad, or already given some to her son, who will likely be her heir. There is nothing you can do about that, if that is her choice

Does the wife also have a will? Is your dad entitled to half of her assets if she dies first, or will your dad have to take her son to court? [Remember that a spouse is entitled to at least half the estate in NC.]
You may very well be right about taxable savings; you might not. What I know is the proceeds from the sale of her condo 2-3 years ago (~$150k) has been depleted through a series of events involving her Son; paying his rent, buying him a car, paying for no less than three different schools/training programs none of which have resulted in gainful employment, food, clothes etc. Basically she is 100% supporting him and has been for nearly his entire life (he's in his 50's). Beyond that, I don't know the state of her finances nor if she has a Will. I have no idea my father's intention concerning her estate if she passes first. I would 100% agree my father has no "moral" claim to her assets. As for the law, at this point I think it's 33% given their 10y marriage. It'll be 50% once they hit 15 years.
rooms222 wrote: Fri Jun 18, 2021 11:26 am Note also the the trustee must be "non-adversarial" and someone who is not ever benefiting from the trust.
Thank you for providing the state.
I only see one person in this saga who is not "benefiting" from your father's trust who could be a trustee.
Just saying...
:oops:
haha yeah that crossed my mind. But the trustee doesn't have to be family. I wonder if I can be the trustee such that I get none of the money from that trust when she passes, but my sister does. That would be totally fine with me; questions of fairness at that point could be handled through other means such as me getting a larger share of the assets not put in trust. But my sister and I also have a close enough relationship I trust her to get 100% of what's left in the trust and give me 50% back. Or I'd just let her have it as she'd need it more than me anyway.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Carefreeap »

mouth wrote: Fri Jun 18, 2021 5:38 pm
texasdiver wrote: Fri Jun 18, 2021 5:04 pm
mouth wrote: Fri Jun 18, 2021 2:53 pmThe confounding factor here is the son. I will give no ground on the idea that my father is right to seek methods to prevent money flowing to him given his history. HOWEVER, the practicality of ensuring that is an entirely different matter and I am reluctantly being placed in a position to enforce that as a trustee. I would much prefer that Wife just be given whatever the effective value would be of my father's schemes and I walk away. Maybe that means she gets the house and sister and I get the pot of money intended for the trust; the delta on those values being the price we pay to walk away. Whatever happens to her, her son, and the rest of her family is no concern of mine. I harbor no ill will, but I have no connection with them, and have no desire to maintain a connection either.
It would seem like the most iron-clad way to do that would be to specify that the wife receive her inheritance in the form of an annuity. It will provide her with income for the remainder of her life but will vanish upon her death leaving no sum for the son to inherit. I don't know if is possible to specify that an inheritance take that form. But that would seem to accomplish the objective. The son might still mooch off his mother when she is alive. But he has no way to take the money or inherit it when she dies.
:oops: That is brilliant!!! why didn't I think of that? I do think Dad might still balk that son could still mooch (that is what he does now and what infuriates him) but it'll be a slow drip at least rather than convincing her to spend the entirety of $150k of proceeds from the sale of her condo in less than 2 years. Wife will also have a chance to realize she should only give him money she can afford to give him. History says she might not show that restraint, but 1) not my problem 2) again, it's a slow drip at least and she does have her own 401k balance and SS.

Vanishing after she dies would be seen as a benefit to my father for sure. But I know his real concern is protecting her from her son and he's trying to place me in that role :shock: :(

I wonder if the lawyer will suggest it. I'm going to stay silent for now both out of respect to this being my father's choice to make and because I know his reaction to ideas that aren't his own.
Unless Wife is naive enough to sell the annuity to one of those firms that buys annuities for "instant cash" for her son, :shock:

There's only so much control from the grave. You gotta let people make their own decisions and live with the consequences. :beer
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Carefreeap wrote: Sat Jun 19, 2021 10:50 am
mouth wrote: Fri Jun 18, 2021 5:38 pm
texasdiver wrote: Fri Jun 18, 2021 5:04 pm
mouth wrote: Fri Jun 18, 2021 2:53 pmThe confounding factor here is the son. I will give no ground on the idea that my father is right to seek methods to prevent money flowing to him given his history. HOWEVER, the practicality of ensuring that is an entirely different matter and I am reluctantly being placed in a position to enforce that as a trustee. I would much prefer that Wife just be given whatever the effective value would be of my father's schemes and I walk away. Maybe that means she gets the house and sister and I get the pot of money intended for the trust; the delta on those values being the price we pay to walk away. Whatever happens to her, her son, and the rest of her family is no concern of mine. I harbor no ill will, but I have no connection with them, and have no desire to maintain a connection either.
It would seem like the most iron-clad way to do that would be to specify that the wife receive her inheritance in the form of an annuity. It will provide her with income for the remainder of her life but will vanish upon her death leaving no sum for the son to inherit. I don't know if is possible to specify that an inheritance take that form. But that would seem to accomplish the objective. The son might still mooch off his mother when she is alive. But he has no way to take the money or inherit it when she dies.
:oops: That is brilliant!!! why didn't I think of that? I do think Dad might still balk that son could still mooch (that is what he does now and what infuriates him) but it'll be a slow drip at least rather than convincing her to spend the entirety of $150k of proceeds from the sale of her condo in less than 2 years. Wife will also have a chance to realize she should only give him money she can afford to give him. History says she might not show that restraint, but 1) not my problem 2) again, it's a slow drip at least and she does have her own 401k balance and SS.

Vanishing after she dies would be seen as a benefit to my father for sure. But I know his real concern is protecting her from her son and he's trying to place me in that role :shock: :(

I wonder if the lawyer will suggest it. I'm going to stay silent for now both out of respect to this being my father's choice to make and because I know his reaction to ideas that aren't his own.
Unless Wife is naive enough to sell the annuity to one of those firms that buys annuities for "instant cash" for her son, :shock:

There's only so much control from the grave. You gotta let people make their own decisions and live with the consequences. :beer
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Dottie57 »

mouth wrote: Fri Jun 18, 2021 11:12 am
Dottie57 wrote: Fri Jun 18, 2021 9:49 am Has your Dad asked his wife what she would want? Does she want the house?

All I can say after reading the thread - I am glad I am not a wife with a husband who has this plan. I realize that have not been married for decades, but still..
Wife has expressed two things; first that she's worried about where she will live when he dies and second that she would like to live in that house.

I know this might be controversial, but to my mind, my sister's mind, and most important my father's mind, she has no claim to the house. She wasn't there when it was bought, contributes nothing financial to the houses upkeep, and there is some "drama" between Dad and Wife related to a "walk out event" that contributes to his state of mind and trust issues with her and her family. What's more, and this dips a toe into family history I'll only briefly discuss, the house was bought with proceeds from the sale of a home owned originally by my mother's father, then my mother, and which our mother's first will left to my sister and I but was changed at the insistence of our father while she was on her death bed from breast cancer. My sister has some emotions on this topic that I lack, but I'll have to deal with if we find ourselves needing to consider disclaiming the house.

Reasonable people can totally debate, outside issues of "the house", my father's moral obligation to have his wife cared for after his death. Right, wrong, or indifferent, he has decided she deserves to live in the house near cost free, but that he's not willing to put any funds into her control because he believes it will just end up in Son's hands.

Addition to my above post: I've also suggested to my father that he consider putting the house into a trust with me as successor to avoid any risks of the house being in probate. We'll see if he bites. The link was from NoLo so maybe he'll consider it. NC doesn't allow TOD deeds unfortunately so the answer is a trust.
If dad and wife have a prenup then you are correct about no claims on house. In my state the spouse , by state law, is entitled to a specific portion of the estate - 1/3. It is hard to disinherit a spouse. There have been lawsuits which the remaining spouse won because of the requirement. Death is handled differently than a rules of divorce. Check with a lawyer so probate goes well when the time comes. Better to know now than when plans can’t be changed.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by SuzBanyan »

Mouth wrote: “If it relates to the home, the trust will pay for it.”

Just realize that there is a wide latitude in what “relates to the home”, especially if the surviving wife lives decades after the husband. Kitchen remodel? Bath remodel? Installing elevator? Adding or removing hardwood floors? Creating a suite for a caregiver? The list obviously goes on and on and begs the question of who gets to make the decision: wife or trustee?

Is wife a renter paying no rent? If so, then the property owner will not be able to deduct expenses incurred. The property owner’s taxes would be higher in the short term, thus depleting the principal sooner.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

SuzBanyan wrote: Sat Jun 19, 2021 12:19 pm Mouth wrote: “If it relates to the home, the trust will pay for it.”

Just realize that there is a wide latitude in what “relates to the home”, especially if the surviving wife lives decades after the husband. Kitchen remodel? Bath remodel? Installing elevator? Adding or removing hardwood floors? Creating a suite for a caregiver? The list obviously goes on and on and begs the question of who gets to make the decision: wife or trustee?

Is wife a renter paying no rent? If so, then the property owner will not be able to deduct expenses incurred. The property owner’s taxes would be higher in the short term, thus depleting the principal sooner.
This is why I suggested Dad make a list of what is considered the trust's to pay for vs her. In his words "the trust should pay for what she 'needs', not what she wants" and to his mind that starts with taxes, insurance, HOA, lawn care, major maintenance and repairs, and ends at "if she wants house cleaners to come in she can pay for that" [shrug] I personally wouldn't begrudge a house cleaner for a 75+yo women unless someone (son!) was living with her to help out.

Kitchen remodel? That isn't a need. Broken appliance or deteriorating cabinets those are a need. Replacing any of that with top 10% level type stuff would fall under "want". It's a ranch, so no elevator needed; totally flat elevation from road to front door too. Floors (all carpet with some tile) is legit grounds for "upkeep" and the trust's responsibility. Upgrading those carpets to Amish Hardwood or wall to wall Alpaca fur, that's gonna be a "Naw for me dawg". It's a 23yo 1900sqft 3 BR 2 bath ADA compliant house with attached 2-car garage in a golf community on the NC coast ... caregiver suite is built in.

But you're right the list goes on and your point is the major reason I do NOT want to be in the position of deciding. And if I am, then I want the terms clearly spelled out. To my Dad's way of thinking I will be the trustee and i will make the decisions. Hopefully the lawyer will provide him with a lot to chew on.

"Is wife a renter ..." I have no idea what the terms will be other than (currently) the house will be ours and she will be allowed to live in it. We'll see what the future holds with a lawyer advising. But yes as a landlord to my own condo I'm well aware of the tax rules there.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by TimeRunner »

IMHO, I think you should do everything you can to not take on this ongoing responsibility. Will your Dad let you attend the meeting with his attorney? If not, consider hiring your own attorney who can represent your interests to review anything that comes out of your Dad's attorney meeting.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

TimeRunner wrote: Sat Jun 19, 2021 12:59 pm IMHO, I think you should do everything you can to not take on this ongoing responsibility. Will your Dad let you attend the meeting with his attorney? If not, consider hiring your own attorney who can represent your interests to review anything that comes out of your Dad's attorney meeting.
You've read my mind. Or at least my posts ;-) Seriously though, that's my hope. I just don't know how to avoid it given his concerns re: her son outside of actions I take after he passes (read: disclaim the house and step-down as executor/trustee)

Right now I can't make my way 8-hours south to have the meeting, but video could be an option. I'm also traveling down there in 5 weeks for a visit so maybe that will be an opening. The hard part of broaching the topic with Dad and not appearing to Dad to be trying to influence him. I also don't know how fast he's planning to move on all of this. If I can't get in front of it I might have no recourse than to take a copy to my own lawyer as you suggest.

My employer offers some free legal services I might be able to use to get some reasonable first-cut advice. Sadly I just checked services through the VA and they are very sparse for my area :( but I'll see if the JAG on any of the many bases near me have openings once I hear back from my father.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Gray »

sport wrote: Tue Jun 15, 2021 10:18 pm It would seem to be a lot easier for everyone if the house is sold upon Dad's demise and the estate pays for an apartment for his wife as long as she is alive. That way what she does with her son does not affect you in any way. The estate would also be relived of taxes and maintenance for the house.
I agree with this 1000%. Besides, when your Dad passes, he’s not going to have a stake in this. It will be a decision of his heirs.

If your mother’s “needs” are vaguely codified then who is to say that they cannot also include funding that could be redirected to your step brother. Put the house and assets in an irrevocable trust that becomes yours and your sister’s upon your mother’s death. Prior to then, your mother would receive fixed payouts adjusted for inflation (without any other withdrawals except as approved by you and your sister) would be a better remedy. Have some contingency, if your mother is not competently managing her finances, to arrange for a third party to pay her fixed bills.

I think your leverage here is channeling your Dad’s desire to ensure your step-brother doesn’t milk your mother’s assets.
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Gray wrote: Sat Jun 19, 2021 6:24 pm
sport wrote: Tue Jun 15, 2021 10:18 pm It would seem to be a lot easier for everyone if the house is sold upon Dad's demise and the estate pays for an apartment for his wife as long as she is alive. That way what she does with her son does not affect you in any way. The estate would also be relived of taxes and maintenance for the house.
I agree with this 1000%. Besides, when your Dad passes, he’s not going to have a stake in this. It will be a decision of his heirs.

If your mother’s “needs” are vaguely codified then who is to say that they cannot also include funding that could be redirected to your step brother. Put the house and assets in an irrevocable trust that becomes yours and your sister’s upon your mother’s death. Prior to then, your mother would receive fixed payouts adjusted for inflation (without any other withdrawals except as approved by you and your sister) would be a better remedy. Have some contingency, if your mother is not competently managing her finances, to arrange for a third party to pay her fixed bills.

I think your leverage here is channeling your Dad’s desire to ensure your step-brother doesn’t milk your mother’s assets.
Minor correction that feels important: this is not my mother. This is my fathers 2nd remarriage after my mother, his wife at the time, passed 40 years ago. The first remarriage ended in divorce after ~15 years.

The apartment idea was nixed by Dad in our phone call as making her feel like she was being kicked out. I was soooo close :(

Your idea it sounds like a Life Estate that many people here are strongly against and still ultimately leaves me connected. It certainly has me out of the middle of day-to-day life decisions which I find very attractive. But my strong preference is for my connection to die with my father. She's a very sweet woman, but I have minimal connection after 10 years nor impulse to continue it after he passes.
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AllMostThere
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by AllMostThere »

All I can say is WOW! :shock: Op's Father is trying to rule from the Grave with this setup. This is all something that should have been thought of (by Father) prior to Father getting married for a third time. Father is NOT blessing his children with this setup, he is fully burdening them with housing responsibility for 3rd wife for a timeframe that could be decades. The Father married into this family, not OP nor Sister, so future housing care of third wife is responsibility of Father, not his children. There needs to be a clean break upon death of Father: 1) Third wife gets house, 2) House is sold and proceeds split between Children and Widow as dictated by Fathers Will or other Estate Document. Op is correct in his actions by questioning his Father on this desired path. It doesn't make sense and unnecessarily burdens his children. OP, please continue down your level headed path of questioning your father on this poorly thought plan and perhaps bring your sister into the process to gain her perspective also as she too will receive this burden. I do thank you for this post as it educates others on how this type of setup complicates lives of heirs after death of a loved one and needs to be avoided. Good luck and keep us updated.
It is not about how much you make, it is about how much you keep and how well you invest it. - Author Unknown
WillRetire
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by WillRetire »

AllMostThere wrote: Sun Jun 20, 2021 7:48 am All I can say is WOW! :shock: Op's Father is trying to rule from the Grave with this setup. This is all something that should have been thought of (by Father) prior to Father getting married for a third time. Father is NOT blessing his children with this setup, he is fully burdening them with housing responsibility for 3rd wife for a timeframe that could be decades. The Father married into this family, not OP nor Sister, so future housing care of third wife is responsibility of Father, not his children. There needs to be a clean break upon death of Father: 1) Third wife gets house, 2) House is sold and proceeds split between Children and Widow as dictated by Fathers Will or other Estate Document. Op is correct in his actions by questioning his Father on this desired path. It doesn't make sense and unnecessarily burdens his children. OP, please continue down your level headed path of questioning your father on this poorly thought plan and perhaps bring your sister into the process to gain her perspective also as she too will receive this burden. I do thank you for this post as it educates others on how this type of setup complicates lives of heirs after death of a loved one and needs to be avoided. Good luck and keep us updated.
Exactly. Agree 1000%.

OP: You probably know this already, but it bears stating: Unless you have a burning desire to be a long-distance landlord to stepmother and her allegedly-deadbeat-caregiver-son, inform your father sooner rather than later that you do not wish to be a long-distance landlord. He may be disappointed to hear that, but better now than later. The lawyer may have other reasons for recommending against father's plans, but time is money, so why pay for advice that is a moot point? And let sis speak for herself. Perhaps she wants the house and is willing to be a long-distance landlord to stepmother et al.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

WillRetire wrote: Sun Jun 20, 2021 8:38 am
AllMostThere wrote: Sun Jun 20, 2021 7:48 am All I can say is WOW! :shock: Op's Father is trying to rule from the Grave with this setup. This is all something that should have been thought of (by Father) prior to Father getting married for a third time. Father is NOT blessing his children with this setup, he is fully burdening them with housing responsibility for 3rd wife for a timeframe that could be decades. The Father married into this family, not OP nor Sister, so future housing care of third wife is responsibility of Father, not his children. There needs to be a clean break upon death of Father: 1) Third wife gets house, 2) House is sold and proceeds split between Children and Widow as dictated by Fathers Will or other Estate Document. Op is correct in his actions by questioning his Father on this desired path. It doesn't make sense and unnecessarily burdens his children. OP, please continue down your level headed path of questioning your father on this poorly thought plan and perhaps bring your sister into the process to gain her perspective also as she too will receive this burden. I do thank you for this post as it educates others on how this type of setup complicates lives of heirs after death of a loved one and needs to be avoided. Good luck and keep us updated.
Exactly. Agree 1000%.

OP: You probably know this already, but it bears stating: Unless you have a burning desire to be a long-distance landlord to stepmother and her allegedly-deadbeat-caregiver-son, inform your father sooner rather than later that you do not wish to be a long-distance landlord. He may be disappointed to hear that, but better now than later. The lawyer may have other reasons for recommending against father's plans, but time is money, so why pay for advice that is a moot point? And let sis speak for herself. Perhaps she wants the house and is willing to be a long-distance landlord to stepmother et al.
Thank you both. Indeed I do hope, beyond supporting my own learning, this all might be instructive for others. Your assessments of the situation are as on the nose as they are starkly stated. :beer I can only imagine as modern blended families from parents born in the 1940s-50s continue to age this will be a more common situation. My father's control issues are a different matter entirely.

Sister: her and I are in communication about this very regularly. One thing I can promise you, she has less desire to be a long-distance landlord than I do and wants a clean break. She's frankly less accepting of the concept of Wife getting to live there than I am but it's about emotional history and not directed at Wife herself. Logistically she has even less capability to be a long distance landlord short of hiring a property manager to handle it all. But that's another cost burden tipping the scale towards walking away from the house completely after our father passes.

In addition to back-briefing her about calls with our father I've copied her on my two major posts from this thread (OP and my major follow up). She is, for now, thankful that I'm taking the lead because the stress would cause her to shutdown. Sadly also, in my father's mind there's a reason he wants me as the trustee/executor and that means my sister's input will be less welcome and impactful :annoyed. She knows I have her best interests at heart and she knows I understand her emotional attachment to the house due to a perceived linkage to our long-ago-sold childhood familial home; which is to say, neither of us grew up in the current house so there is no emotional attachment, only a financial one. In our talks she's also come to understand there's a lot more inheritance in play beyond the house. My logic to her was that if she wants to be emotionally attached to the monies involved (proceeds from childhood home sale), then she should focus on the brokerage accounts. Bluntly, the sale of the NJ family home generated WAY more proceeds than the ~$150k cost of this NC home. She had been assuming all this time the bulk of our mother's "legacy" resided in the house. In her own words, "So, I still am shifting perspectives... Finding my new normal...".

And yet despite everything I said, I agree that there will come a time where I have to step back and insist she make her wishes known because if I have to "put my foot down" for my own well-being, she's next in line unless Dad decides to just disinherit both of us [shrug]
Mr. Rumples
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Mr. Rumples »

When my father died, there was property with strings attached. Not wanting the drama, I wrote to the court after his death and disclaimed that part of the estate. I have never regretted it - I had zero interest in dealing with my stepmother and her family. Don't know about other states, but where I live, all I had to do was write the court. The Clerk of the Court was so amused since it happens so seldom she made it very easy in how to word it and she ensured it was handled properly.

If the father wants to ensure his wife is comfortable, that's on him, not the kids. Owning a home one lives in is hard enough when it comes to maintenance, imagine the drama of an aging step-mother. Whose liable if she falls from rotten stairs or loose flooring and cracks open her head? Wouldn't her son sue?

Maybe I missed it, but while the father lives in NC, does the OP? In VA, the executor must either reside in VA or hire someone in VA to represent him/her.
Last edited by Mr. Rumples on Sun Jun 20, 2021 11:26 am, edited 1 time in total.
Dottie57
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Dottie57 »

Mr. Rumples wrote: Sun Jun 20, 2021 10:56 am When my father died, there was property with strings attached. Not wanting the drama, I wrote to the court after his death and disclaimed that part of the estate. I have never regretted it - I had zero interest in dealing with my stepmother and her family. Don't know about other states, but where I live, all I had to do was write the court. The Clerk of the Court was so amused since it happens so seldom she made it very easy in how to word it and she ensured it was handled properly.
To me, a will is to disperse property ( house, accounts etc) , not actions. It is really too bad dad won’t have the house sold and leave everyone cash, and set wife up with enough for a nice condo and an SPIA to help fund her life. Boxing People in is not good.
Freetime76
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Freetime76 »

A SPIA does sound like a good option.

Adding: refusing to play (be executor) is an option. I am glad it already occurred to you. Most likely, you could call your dad’s bluff if he put something egregious in his new will, and I bet he would find his own reasons to come around. Or, at least you’d be out of dealing with it.

[I used this method, nicknamed the nuclear option by my DH, when my mom wanted her house to go to both me and my sister. My mom went into her attorney’s office with one plan and came out with this bizarro-world scheme. Not a good plan, and she refused to listen to reason because her attorney insisted it would be fine (he hasn’t met my sister, nor experienced the joys of her actions while settling our dad’s estate.). Mom was digging her heels in, and it’s her decision, right? Of course. So, all I could do was say thank you, please take me off as the executor and let my sister or someone else do it. It’s a sucky job, anyway. 24 hours later, voila, a new appointment with the attorney and the change was done to sell the house instead. ]

Maybe it’s not such a bad thing that your dad is a control nut :wink: - he’s doing his best to protect his wife from her son.
Please spell out new acronyms. Thank you.
SuzBanyan
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by SuzBanyan »

What about a reverse mortgage? Dad takes out reverse mortgage now and places cash proceeds in investment account with son and daughter as POD (or even gifts it now). Step-mom gets the home when Dad passes and she can continue to own it without paying off the reverse mortgage as long as she still lives in it. When she passes, the bulk of the value in the home will likely go to the lender. Step-Mom will need to use her assets to pay upkeep. Depending on how long she lives, this ongoing cost may be zeroed out by the equity in the home when she passes.
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dodecahedron
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by dodecahedron »

SuzBanyan wrote: Sun Jun 20, 2021 12:43 pm What about a reverse mortgage? Dad takes out reverse mortgage now and places cash proceeds in investment account with son and daughter as POD (or even gifts it now). Step-mom gets the home when Dad passes and she can continue to own it without paying off the reverse mortgage as long as she still lives in it. When she passes, the bulk of the value in the home will likely go to the lender. Step-Mom will need to use her assets to pay upkeep. Depending on how long she lives, this ongoing cost may be zeroed out by the equity in the home when she passes.
This strikes me as a potentially brilliant solution. Essentially Dad would be extracting the present value of the expected residual fair market value of the property at the later of his or his spouse's death (admittedly with some frictional transactions costs fees etc.) up front and can give that to his kids in the form of a known lump sum now.

This would greatly simplify many things, including the settlement of the estate.
Lee_WSP
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by Lee_WSP »

dodecahedron wrote: Sun Jun 20, 2021 1:05 pm
SuzBanyan wrote: Sun Jun 20, 2021 12:43 pm What about a reverse mortgage? Dad takes out reverse mortgage now and places cash proceeds in investment account with son and daughter as POD (or even gifts it now). Step-mom gets the home when Dad passes and she can continue to own it without paying off the reverse mortgage as long as she still lives in it. When she passes, the bulk of the value in the home will likely go to the lender. Step-Mom will need to use her assets to pay upkeep. Depending on how long she lives, this ongoing cost may be zeroed out by the equity in the home when she passes.
This strikes me as a potentially brilliant solution. Essentially Dad would be extracting the present value of the expected residual fair market value of the property at the later of his or his spouse's death (admittedly with some frictional transactions costs fees etc.) up front and can give that to his kids in the form of a known lump sum now.

This would greatly simplify many things, including the settlement of the estate.
Give wife encumbered property whose actual value is zero? And then go and give the kids the cash withdrawn? I suggest you both plus OP think on the implications and the spousal share law before seriously considering this further.
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mouth
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Re: Dad wants Wife to live in house left to me and sister after he passes

Post by mouth »

Mr. Rumples wrote: Sun Jun 20, 2021 10:56 am Maybe I missed it, but while the father lives in NC, does the OP? In VA, the executor must either reside in VA or hire someone in VA to represent him/her.
:P

[insert google noises]
https://www.nolo.com/legal-encyclopedia ... cutor.html
For practical reasons, it's smart to name an executor who lives near you. Your executor may have to handle day-to-day matters for weeks, months, or sometimes longer. If you must appoint an executor who lives far away, you should know the requirements North Carolina imposes on out-of-state executors.

In North Carolina, a nonresident executor must appoint someone who lives in the state to act as an agent. Your executor's in-state agent will accept legal papers on behalf of your estate. (N.C. Gen. Stat. § 28A-4-2.)
:(

You gave me hope there Mr. Rumples. But perhaps the requirement to hire someone in-state will be enough to tip the scales.
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