[Virginia] Transfer on Death Deeds .. New Husband?

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alpaca1
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[Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 7:42 am

Hello new poster here. Long time lurker but I'm about to run into a dilemma.

So my mother lives in a house that is mortgaged to me yet she is on the deed. We did a quitclaim and I deeded the house back to her and then I moved out to take advantage of a tax benefit that is offered to her as long as she is only on the deed, and I do not live on the property.

At some point last year, I went to the land records office and we filled out/notarized a "Transfer on Death" deed using the template which is found at the VA law catalog here: https://law.lis.virginia.gov/vacode/tit ... n64.2-635/

VA has intestate succession laws so I would've been able to claim the property as mine eventually, it just would've been a long drawn out probate process.

Now the issue is this..

She has actually found a new man who is 5 years younger than her, and he has already bought her a ring so that they can get married. Needless to say, this concerns me because I have a financial interest in the property. Besides doing another quitclaim and having her add me to the deed again, what else can be done to protect myself in case there is a divorce or heaven forbid a death in the near term of my elderly mother? She is 67 years old.

Very concerned and looking for guidance.. thank you.

Lastrun
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 9:35 am

alpaca1 wrote:
Wed Jan 17, 2018 7:42 am
I deeded the house back to her and then I moved out to take advantage of a tax benefit that is offered to her as long as she is only on the deed, and I do not live on the property.
Was this for eligibility for real property tax relief for the elderly?
alpaca1 wrote:
Wed Jan 17, 2018 7:42 am
VA has intestate succession laws so I would've been able to claim the property as mine eventually, it just would've been a long drawn out probate process.
Not really true, probate of real estate in VA is typically simple, if there are minimal other assets.
alpaca1 wrote:
Wed Jan 17, 2018 7:42 am
Now the issue is this..
I am not sure why this is a new issue? Once you deeded the property to your mother you subjected it to her control, to her creditors, and to potential spousal claims. The risk was there from the start.

I am making an assumption here that you transferred the property into your mother's name to obtain elderly property tax relief, but still consider yourself as the true owner of the property. I tell clients this is like the old game of Twister and we all know how that game ends. I have thought about this for a while this morning and am of the opinion that you will just need to take the property out of your mother's name if my assumption is correct. You can call the local county commissioner of revenue to discuss the situation, but I think they would not accept joint ownership, and with joint ownership the creditor issues will remain.

But again, my first question above is the key to all of this.

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dodecahedron
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dodecahedron » Wed Jan 17, 2018 9:44 am

So the fiance is 62 and presumably will have income of his own. Regardless of whether he has any ownership interest in the home, if he moves in with her, his age and/or income may disqualify the household for the property tax exemption.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:10 am

my mother lives in a house that is mortgaged to me yet she is on the deed. We did a quitclaim and I deeded the house back to her and then I moved out to take advantage of a tax benefit that is offered to her as long as she is only on the deed, and I do not live on the property.
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?

We live in a Virginia jurisdiction with a very generous tax deferral/relief program for Seniors that earn less than a certain amount - so I am aware of the requirements and benefits. It saves DW and I about $6,000 per year.

I do not think the TOD is affected by her upcoming marriage. In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:12 am

dodecahedron wrote:
Wed Jan 17, 2018 9:44 am
So the fiance is 62 and presumably will have income of his own. Regardless of whether he has any ownership interest in the home, if he moves in with her, his age and/or income may disqualify the household for the property tax exemption.
OK - NOW I see an "issue". Similar rules in my jurisdiction.. Marriage might make it better or worse .. check the detaails. it is also possible that his adverse affect may be temporary - as he becomes older and/or his income changes.

Then again, maybe she will move to his place and you can get the house back..

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by mouses » Wed Jan 17, 2018 10:16 am

dm200 wrote:
Wed Jan 17, 2018 10:10 am
In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.
I have the dim idea that in some states a surviving spouse has a right to some portion of the deceased person's estate.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 10:19 am

dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.

Lastrun
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 10:24 am

mouses wrote:
Wed Jan 17, 2018 10:16 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.
I have the dim idea that in some states a surviving spouse has a right to some portion of the deceased person's estate.
Yes, despite the TOD, now these are not huge in VA, but . . ..

Big ones would be the spousal allowance, probate homestead, and any debts owed to the surviving spouse.

§ 64.2-634. Liability for creditor claims and statutory allowances.
A. After the death of the transferor, and subject to the transferor's right to direct the source from which liabilities will be paid, property transferred at the transferor's death by a transfer on death deed is subject to claims of the transferor's creditors, costs of administration of the transferor's estate, the expenses of the transferor's funeral and disposal of remains, and statutory allowances to a surviving spouse and children of the transferor including the family allowance, the right to exempt property, and the homestead allowance to the extent the transferor's probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:33 am

mouses wrote:
Wed Jan 17, 2018 10:16 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.
I have the dim idea that in some states a surviving spouse has a right to some portion of the deceased person's estate.
Depends on details and state law.

I doubt this is the case in Virginia for such a late marriage AND child(ren) of prior marriage/relationship.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:35 am

Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.
After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Seems to be a potential risk.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by KATNYC » Wed Jan 17, 2018 10:42 am

alpaca1 wrote:
Wed Jan 17, 2018 7:42 am
Hello new poster here. Long time lurker but I'm about to run into a dilemma.

So my mother lives in a house that is mortgaged to me yet she is on the deed. We did a quitclaim and I deeded the house back to her and then I moved out to take advantage of a tax benefit that is offered to her as long as she is only on the deed, and I do not live on the property.

At some point last year, I went to the land records office and we filled out/notarized a "Transfer on Death" deed using the template which is found at the VA law catalog here: https://law.lis.virginia.gov/vacode/tit ... n64.2-635/

VA has intestate succession laws so I would've been able to claim the property as mine eventually, it just would've been a long drawn out probate process.

Now the issue is this..

She has actually found a new man who is 5 years younger than her, and he has already bought her a ring so that they can get married. Needless to say, this concerns me because I have a financial interest in the property. Besides doing another quitclaim and having her add me to the deed again, what else can be done to protect myself in case there is a divorce or heaven forbid a death in the near term of my elderly mother? She is 67 years old.

Very concerned and looking for guidance.. thank you.
67 is elderly? My dad is 68 and I never felt he was elderly. A cousin died over Christmas at 96 & her sister died at 102. Now they were elderly in my book.

With respect to your dilemma, I was in a meeting about this last night (random discussion prior to the real meeting). Neighbors here in NY get a substantial seniors tax credit. The Board for our cooperative encourages seniors to add their adult children to their property since it's easier to transfer at death; however, they also mentioned last night that adding someone who does not meet the income standards disqualifies the senior from taking the tax credit. What is their combined income? They may make too much for the tax credit.

If all else fails, take full possession of the house and set it up as a rental for mom/husband. You may end up getting more of a benefit if it's set up as an investment property in your name.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:46 am

67 is elderly? My dad is 68 and I never felt he was elderly. A cousin died over Christmas at 96 & her sister died at 102. Now they were elderly in my book.


"elderly" is often the term used by jurisdictions for benefits. :)

I feel the same way at 72. Do not feel "elderly"

I recall my maternal grandfather (who lived to 95). Well into his 80's, as he puffed on his pipe, when the subject of someone would come up, hig might ask, "How old is he?" Someone would answer, "70" and, with another puff on his pipe, would say, "Young man!"

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 10:48 am

With respect to your dilemma, I was in a meeting about this last night (random discussion prior to the real meeting). Neighbors here in NY get a substantial seniors tax credit. The Board for our cooperative encourages seniors to add their adult children to their property since it's easier to transfer at death; however, they also mentioned last night that adding someone who does not meet the income standards disqualifies the senior from taking the tax credit. What is their combined income? They may make too much for the tax credit.
Exactly the stuation in my Virginia jurisdiction for ownership and getting tax deferral/relief.

alpaca1
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 11:10 am

Sorry, I don't mean to offend anyone with the 67 being considered "elderly". A previous poster was correct in that I just referred to her as being elderly because she qualifies in the county to take advantage of tax relief, which saves me about $6000 a year.

I do understand that some people are alarmed I would have put myself into this position in the first place, but I assure you being an only son and since it's a situation where we have mutual trust, I was OK with it. Don't get me wrong, she is in no way going to deeding the home over to her new husband or anything like that.

Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:

1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.

2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed. If I was on the deed, I'd get the property in its entirety.

https://law.lis.virginia.gov/vacode/tit ... n64.2-200/

It seems to me the best course of action in order to mitigate both of these, is to lose the elderly tax relief, and put myself back on the deed as joint or hold solely by myself.

Edit: Yes he does have a job and has income, as well as a townhouse of his own (Says he has $150k equity), and some stocks or so I hear.
Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.

Does my logic seem sound? Does anyone else have an opinion?
Last edited by alpaca1 on Wed Jan 17, 2018 11:25 am, edited 1 time in total.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 11:22 am

alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Sorry, I don't mean to offend anyone with the 67 being considered "elderly". A previous poster was correct in that I just referred to her as being elderly because she qualifies in the county to take advantage of tax relief, which saves me about $6000 a year.
I do understand that some people are alarmed I would have put myself into this position in the first place, but I assure you being an only son and since it's a situation where we have mutual trust, I was OK with it. Don't get me wrong, she is in no way going to deeding the home over to her new husband or anything like that.
Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:
1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.
2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed. If I was on the deed, I'd get the property in its entirety.
https://law.lis.virginia.gov/vacode/tit ... n64.2-200/
It seems to me the best course of action in order to mitigate both of these, is to lose the elderly tax relief, and put myself back on the deed as joint or hold solely by myself.
Edit: Yes he does have a job and has income, as well as a townhouse of his own (Says he has $150k equity), and some stocks or so I hear.
Does my logic seem sound? Does anyone else have an opinion?
I would check with an estate attorney, but it seems to me that if she had a will, he would not be entitled to a share in HER house. IMO, she should have a will.

One possibiity - again check this out - would be for them to have separate "legal" residences after marriage.

alpaca1
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 11:44 am

dm200 wrote:
Wed Jan 17, 2018 11:22 am
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Sorry, I don't mean to offend anyone with the 67 being considered "elderly". A previous poster was correct in that I just referred to her as being elderly because she qualifies in the county to take advantage of tax relief, which saves me about $6000 a year.
I do understand that some people are alarmed I would have put myself into this position in the first place, but I assure you being an only son and since it's a situation where we have mutual trust, I was OK with it. Don't get me wrong, she is in no way going to deeding the home over to her new husband or anything like that.
Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:
1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.
2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed. If I was on the deed, I'd get the property in its entirety.
https://law.lis.virginia.gov/vacode/tit ... n64.2-200/
It seems to me the best course of action in order to mitigate both of these, is to lose the elderly tax relief, and put myself back on the deed as joint or hold solely by myself.
Edit: Yes he does have a job and has income, as well as a townhouse of his own (Says he has $150k equity), and some stocks or so I hear.
Does my logic seem sound? Does anyone else have an opinion?
I would check with an estate attorney, but it seems to me that if she had a will, he would not be entitled to a share in HER house. IMO, she should have a will.

One possibiity - again check this out - would be for them to have separate "legal" residences after marriage.
I think checking with an estate attorney is a good idea.

I just called the land records office and they told me that if she did a quit claim, half the equity in the house at the time would be taxable? This sounds like BS to me? There's no money changing hands.. and I can't find anything that talks about this.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 11:52 am

I think checking with an estate attorney is a good idea.

I just called the land records office and they told me that if she did a quit claim, half the equity in the house at the time would be taxable? This sounds like BS to me? There's no money changing hands.. and I can't find anything that talks about this.
I would not accept tax advice from this office. May or may not be correct..

Maybe I am missing it, but what are her opinions, views, choices, ??

Within the "letter" of the law and policies, I might suggest the separate legal residences alternative. Perhaps he could find a rent paying person to "share" his house as well.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by BolderBoy » Wed Jan 17, 2018 11:57 am

alpaca1 wrote:
Wed Jan 17, 2018 7:42 am
She has actually found a new man who is 5 years younger than her, and he has already bought her a ring so that they can get married. Needless to say, this concerns me because I have a financial interest in the property. Besides doing another quitclaim and having her add me to the deed again, what else can be done to protect myself in case there is a divorce or heaven forbid a death in the near term of my elderly mother? She is 67 years old.
You need a lawyer to tell you how solid a TOD deed is in Virginia. If it is solid and your mother doesn't revoke it, upon her death the property is yours immediately. A spouse may sue you and it may cost you $$$ to defend against that but if TOD deeds are solid you should prevail.

So consult an attorney who knows the TOD deed law in Virginia just to be sure.

(my mom died last year in Virginia with a TOD deed in place. the property transferred immediately to my sister and me without question or challenge)

IANAL.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Nutmeg » Wed Jan 17, 2018 12:07 pm

OP--A prenuptial agreement could address many problems, and could be prepared in conjunction with the new wills that both members of the happy couple should prepare anyway. Note that a prenup must be signed before the wedding, and the wills can be prepared in advance but should be signed after the wedding.

The facts in your situation are a bit unclear. I recognize that the deed is now solely in your mother's name. When you state that the property is "mortgaged to me," do you mean that you lent her the money to buy the house, for which she granted you a mortgage on the property, or do you mean that a third party lent the money to buy the house, for which you granted a mortgage on the property to the third party?

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 12:37 pm

Nutmeg wrote:
Wed Jan 17, 2018 12:07 pm
OP--A prenuptial agreement could address many problems, and could be prepared in conjunction with the new wills that both members of the happy couple should prepare anyway. Note that a prenup must be signed before the wedding, and the wills can be prepared in advance but should be signed after the wedding.

The facts in your situation are a bit unclear. I recognize that the deed is now solely in your mother's name. When you state that the property is "mortgaged to me," do you mean that you lent her the money to buy the house, for which she granted you a mortgage on the property, or do you mean that a third party lent the money to buy the house, for which you granted a mortgage on the property to the third party?
I believe that if there is a mortgage lien on a property, the mortgage holder must consent to the ownership change.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 12:50 pm

BolderBoy wrote:
Wed Jan 17, 2018 11:57 am
You need a lawyer to tell you how solid a TOD deed is in Virginia.
TOD is solid, but that is not the issue.

The threats are:

1. Manipulation of the TOD deed prior to death; and

2. Claims against the TOD property after death. See my post above, the TOD deed in VA remains subject to the debts of the estate, including spousal claims and the augmented estate claims.
Nutmeg wrote:
Wed Jan 17, 2018 12:07 pm
OP--A prenuptial agreement could address many problems,
Prenup solves no 2. but not no. 1.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Unless he's a hypnotist or does some SERIOUS manipulation,
This is the risk you, and you alone, must assess. As an example, suppose Mom gives new husband a boilerplate Power of Attorney with a power to gift. Husband uses POA to revoke TOD deed. Also, someone needs to advise you on the augmented estate claim risk versus the TOD based on the actual make up of your mother's estate.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
If I was on the deed, I'd get the property in its entirety.
As as noted above in the VA statute, yes you would get the property in its entirety, and potentially subject to a boatload of claims and offsets.
dm200 wrote:
Wed Jan 17, 2018 11:22 am
I would check with an estate attorney,
This^^^^^^

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 12:55 pm

dm200 wrote:
Wed Jan 17, 2018 12:37 pm
Nutmeg wrote:
Wed Jan 17, 2018 12:07 pm
OP--A prenuptial agreement could address many problems, and could be prepared in conjunction with the new wills that both members of the happy couple should prepare anyway. Note that a prenup must be signed before the wedding, and the wills can be prepared in advance but should be signed after the wedding.

The facts in your situation are a bit unclear. I recognize that the deed is now solely in your mother's name. When you state that the property is "mortgaged to me," do you mean that you lent her the money to buy the house, for which she granted you a mortgage on the property, or do you mean that a third party lent the money to buy the house, for which you granted a mortgage on the property to the third party?
I believe that if there is a mortgage lien on a property, the mortgage holder must consent to the ownership change.
This is not technically correct. A deed could be filed, and deeds are often filed, without any notice or knowledge of the lien holder. Of course the grantee takes subject to the mortgage or the lien, and the "due on sale clause" in the promissory note has likely triggered a default. The classic case of this is that many transfer their residence to a revocable trust without notification or consent of their lender as the Garn-St. Germain Act under federal law precludes the lender from exercising the default in such a transfer.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 1:02 pm

Thanks everyone. Great amount of info on this forum!

I contacted a titling agency and I'm going to pay a relatively small fee ($250) to get my name added back in to the deed. Great insurance in case something does go south.

I'm also going to contact some attorneys to see if she would like to draft a will.

Edit: Not sure if I mentioned this or not but we do have a TOD deed as well.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 1:42 pm

Lastrun wrote:
Wed Jan 17, 2018 12:55 pm
dm200 wrote:
Wed Jan 17, 2018 12:37 pm
Nutmeg wrote:
Wed Jan 17, 2018 12:07 pm
OP--A prenuptial agreement could address many problems, and could be prepared in conjunction with the new wills that both members of the happy couple should prepare anyway. Note that a prenup must be signed before the wedding, and the wills can be prepared in advance but should be signed after the wedding.

The facts in your situation are a bit unclear. I recognize that the deed is now solely in your mother's name. When you state that the property is "mortgaged to me," do you mean that you lent her the money to buy the house, for which she granted you a mortgage on the property, or do you mean that a third party lent the money to buy the house, for which you granted a mortgage on the property to the third party?
I believe that if there is a mortgage lien on a property, the mortgage holder must consent to the ownership change.
This is not technically correct. A deed could be filed, and deeds are often filed, without any notice or knowledge of the lien holder. Of course the grantee takes subject to the mortgage or the lien, and the "due on sale clause" in the promissory note has likely triggered a default. The classic case of this is that many transfer their residence to a revocable trust without notification or consent of their lender as the Garn-St. Germain Act under federal law precludes the lender from exercising the default in such a transfer.
Thanks.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 1:44 pm

alpaca1 wrote:
Wed Jan 17, 2018 1:02 pm
Thanks everyone. Great amount of info on this forum!
I contacted a titling agency and I'm going to pay a relatively small fee ($250) to get my name added back in to the deed. Great insurance in case something does go south.
I'm also going to contact some attorneys to see if she would like to draft a will.
Edit: Not sure if I mentioned this or not but we do have a TOD deed as well.
How much of the real estate tax relief will she lose?

In our case, we save $6,000 a YEAR.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by c1over8 » Wed Jan 17, 2018 2:38 pm

Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Based the original post, the child is the only one liable and the mother is not liable on the mortgage. If that is true then Brown v. Hargrave is not on point at all. In Brown, the decedent was personally liable on the mortgage.
dm200 wrote:
Wed Jan 17, 2018 10:33 am
mouses wrote:
Wed Jan 17, 2018 10:16 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.
I have the dim idea that in some states a surviving spouse has a right to some portion of the deceased person's estate.
Depends on details and state law.

I doubt this is the case in Virginia for such a late marriage AND child(ren) of prior marriage/relationship.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:

1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.

2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed...
If your mom dies intestate survived by her spouse, the spouse would be entitled to 1/3 of her estate. 64.2-200

If your mom dies testate but leaves everything to you, the spouse can claim the allowances already mentioned (family 64.2-309, exempt property 64.2-310, homestead 64.2-311) and an elective share of her augmented estate. The size of the elective share is based on how long they have been married (up to 50% of the augmented estate). See 64.2-308.1 et seq. for what composes the augmented estate, how it is calculated, and the percentages based on length of marriage.

So - in addition to getting a will, mom should get a prenup to waive his right to these allowances and her assets if she dies first (not to mention his rights upon divorce).

Of course, mom can always change her will and leave everything to the spouse despite the prenup. Even if you are added back to the deed, I believe she can also unilaterally break JTWROS and convert it to TICs and then leave her half of the house to her spouse - double check that I know it can be done in some states and believe VA is one of them. But a prenup and a will and hoping mom doesn't change her mind are about the best you can down unless she transfers full title to you.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Carefreeap » Wed Jan 17, 2018 2:55 pm

c1over8 wrote:
Wed Jan 17, 2018 2:38 pm
Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Based the original post, the child is the only one liable and the mother is not liable on the mortgage. If that is true then Brown v. Hargrave is not on point at all. In Brown, the decedent was personally liable on the mortgage.
dm200 wrote:
Wed Jan 17, 2018 10:33 am
mouses wrote:
Wed Jan 17, 2018 10:16 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
In addition, she can have a will (as far as I know) naming you as a beneficiary to the degree whe desires.
I have the dim idea that in some states a surviving spouse has a right to some portion of the deceased person's estate.
Depends on details and state law.

I doubt this is the case in Virginia for such a late marriage AND child(ren) of prior marriage/relationship.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:

1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.

2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed...
If your mom dies intestate survived by her spouse, the spouse would be entitled to 1/3 of her estate. 64.2-200

If your mom dies testate but leaves everything to you, the spouse can claim the allowances already mentioned (family 64.2-309, exempt property 64.2-310, homestead 64.2-311) and an elective share of her augmented estate. The size of the elective share is based on how long they have been married (up to 50% of the augmented estate). See 64.2-308.1 et seq. for what composes the augmented estate, how it is calculated, and the percentages based on length of marriage.

So - in addition to getting a will, mom should get a prenup to waive his right to these allowances and her assets if she dies first (not to mention his rights upon divorce).

Of course, mom can always change her will and leave everything to the spouse despite the prenup. Even if you are added back to the deed, I believe she can also unilaterally break JTWROS and convert it to TICs and then leave her half of the house to her spouse - double check that I know it can be done in some states and believe VA is one of them. But a prenup and a will and hoping mom doesn't change her mind are about the best you can down unless she transfers full title to you.
This explanation is how I understand it.

One of the problem with the OP's situation is that while he may be responsible for the mortgage, the transfer of the property and the equity could go to the new spouse and the transfer would not trigger the Due on Transfer under Garn St. Germain. So the OP's credit is at risk with no corresponding asset. That's a bad place to be in.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Carefreeap » Wed Jan 17, 2018 3:01 pm

Lastrun wrote:
Wed Jan 17, 2018 12:55 pm
dm200 wrote:
Wed Jan 17, 2018 12:37 pm
Nutmeg wrote:
Wed Jan 17, 2018 12:07 pm
OP--A prenuptial agreement could address many problems, and could be prepared in conjunction with the new wills that both members of the happy couple should prepare anyway. Note that a prenup must be signed before the wedding, and the wills can be prepared in advance but should be signed after the wedding.

The facts in your situation are a bit unclear. I recognize that the deed is now solely in your mother's name. When you state that the property is "mortgaged to me," do you mean that you lent her the money to buy the house, for which she granted you a mortgage on the property, or do you mean that a third party lent the money to buy the house, for which you granted a mortgage on the property to the third party?
I believe that if there is a mortgage lien on a property, the mortgage holder must consent to the ownership change.
This is not technically correct. A deed could be filed, and deeds are often filed, without any notice or knowledge of the lien holder. Of course the grantee takes subject to the mortgage or the lien, and the "due on sale clause" in the promissory note has likely triggered a default. The classic case of this is that many transfer their residence to a revocable trust without notification or consent of their lender as the Garn-St. Germain Act under federal law precludes the lender from exercising the default in such a transfer.
Also under D 6 A transfer to the spouse or children are also exempt from the Due on Transfer.

https://www.law.cornell.edu/uscode/text/12/1701j-3

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 3:54 pm

I am not ready to give up on this, I think the OP needs some good advice and/or a talk with the local Commissioner of Revenue. Each county is a little different and I would be upfront and honest in what I was trying to accomplish.

I think many of the responses on here are great----prenup with waivers, a good will, etc. But they don't resolve the issue in the entirety. The simple issue is that Mom has fee simple title to the real estate while she is alive. This is the danger.

So to help the OP we need to think of a way to divest Mom of sole title so she can, or limit her ability to, defeat the TOD during her lifetime, ALL WHILE still qualifying for the reduced property taxes. This is the ultimate tension--we want Mom to be the sole owner for property tax relief, but not for purposes of title transfer.

Just some random thoughts:

1. Would a life estate work? I have not tried this in VA in terms of property tax relief. This would create a remainder interest that could only be defeated with the OPs consent.

2. Would a VA land trust work with OP at the trustee and Mom as the beneficiary? Would this still qualify for property tax relief?

3. I am fairly certain an irrevocable trust will not qualify for tax relief because we use such trusts TO QUALIFY clients for tax relief by moving liquid assets out of the estate.

4. I think a simple revocable trust will simply create the same issues since Mom would have the power of revocation

Just thinking out loud.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by Lastrun » Wed Jan 17, 2018 4:05 pm

c1over8 wrote:
Wed Jan 17, 2018 2:38 pm
Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Based the original post, the child is the only one liable and the mother is not liable on the mortgage. If that is true then Brown v. Hargrave is not on point at all. In Brown, the decedent was personally liable on the mortgage.
If you take a look at how I opened the remark, I assumed the OP held the debt in response to dm200's thought that the debt may solve the issue.

It is still not clear to me whether the OP is on the mortgage or holds the mortgage, but you are correct that the doctrine of exoneration in VA would not apply if the OP does not hold the mortgage.

c1over8
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by c1over8 » Wed Jan 17, 2018 5:04 pm

Lastrun wrote:
Wed Jan 17, 2018 4:05 pm
c1over8 wrote:
Wed Jan 17, 2018 2:38 pm
Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Based the original post, the child is the only one liable and the mother is not liable on the mortgage. If that is true then Brown v. Hargrave is not on point at all. In Brown, the decedent was personally liable on the mortgage.
If you take a look at how I opened the remark, I assumed the OP held the debt in response to dm200's thought that the debt may solve the issue.

It is still not clear to me whether the OP is on the mortgage or holds the mortgage, but you are correct that the doctrine of exoneration in VA would not apply if the OP does not hold the mortgage.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.
Looking at it again I agree the original post was ambiguous as to whether OP was the maker or the holder. I interpreted OP's quoted update to mean OP is liable on the note rather than holding the note but the mortgage situation is still not crystal clear.

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dm200
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dm200 » Wed Jan 17, 2018 5:36 pm

Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.
Depending on the assessed value of the house AND the tax rate, it might be a "big deal". As I said, in our case, it is $6,000 per year OR $500 per month difference.

It means, I think, that if the lender has escrow your monthly mortgage payment will go UP by the monthly amount of the real estate tax. Ours is a big deal indeed. If this were me, I would look for legitimate way(s) of keeping the tax relief.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by dekecarver » Wed Jan 17, 2018 8:28 pm

Since your mom's suitor has his own house, why not have your mom sign the house back over to you with only you on the deed. Give her living rights to the house until she remarries and then she goes to live in his house. At some point you have to lose some some tax benefit to avoid the potential migraine. Some things just aren't worth the time and energy. Just a thought.

alpaca1
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 10:16 pm

c1over8 wrote:
Wed Jan 17, 2018 5:04 pm
Lastrun wrote:
Wed Jan 17, 2018 4:05 pm
c1over8 wrote:
Wed Jan 17, 2018 2:38 pm
Lastrun wrote:
Wed Jan 17, 2018 10:19 am
dm200 wrote:
Wed Jan 17, 2018 10:10 am
Do you hold a mortgage on the house? If so, isn;t that a degree of protection?
Lets assume the OP does hold the debt.

After marriage, Mom revokes the TOD deed and conveys the house into joint name with the spouse, or devises the property in her will to the spouse. Under the specific devise, unless the will stated otherwise, the new husband would receive the property debt free. Under the JTWROS scenario, under VA law, new husband would have the right to claim that the estate pay 1/2 of the debt (see Brown v. Hargrave). So in either case, the OP basically would have to pay some or all of the debt out of the estate.
Based the original post, the child is the only one liable and the mother is not liable on the mortgage. If that is true then Brown v. Hargrave is not on point at all. In Brown, the decedent was personally liable on the mortgage.
If you take a look at how I opened the remark, I assumed the OP held the debt in response to dm200's thought that the debt may solve the issue.

It is still not clear to me whether the OP is on the mortgage or holds the mortgage, but you are correct that the doctrine of exoneration in VA would not apply if the OP does not hold the mortgage.
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.
Looking at it again I agree the original post was ambiguous as to whether OP was the maker or the holder. I interpreted OP's quoted update to mean OP is liable on the note rather than holding the note but the mortgage situation is still not crystal clear.
I'm the one who is paying on the mortgage, so yeah I am liable.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Wed Jan 17, 2018 10:22 pm

dm200 wrote:
Wed Jan 17, 2018 5:36 pm
Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.
Depending on the assessed value of the house AND the tax rate, it might be a "big deal". As I said, in our case, it is $6,000 per year OR $500 per month difference.

It means, I think, that if the lender has escrow your monthly mortgage payment will go UP by the monthly amount of the real estate tax. Ours is a big deal indeed. If this were me, I would look for legitimate way(s) of keeping the tax relief.
Yes indeed it is a huge deal. However, right now I own a condo with a large balance, and of course I don't technically own the house that my mother is in but I'm paying for it. I realize that I will have to pay property taxes when I move in, but there are other reasons as to which I would like to move in as well. One being, is that my mother is getting older and I would like to be next to her in case she does need help. Another, is that I don't want to deal with the maintenance of two different homes. Third, and this is something I learned while lurking these forums is that I would rather spend the extra money that would go into interest payments in the second home, towards investing (in a relatively safe manner) instead.

The biggest drawback is privacy... and of course paying the extra money for property tax.

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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by KATNYC » Thu Jan 18, 2018 12:48 am

alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Sorry, I don't mean to offend anyone with the 67 being considered "elderly". A previous poster was correct in that I just referred to her as being elderly because she qualifies in the county to take advantage of tax relief, which saves me about $6000 a year.

I do understand that some people are alarmed I would have put myself into this position in the first place, but I assure you being an only son and since it's a situation where we have mutual trust, I was OK with it. Don't get me wrong, she is in no way going to deeding the home over to her new husband or anything like that.

Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:

1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.

2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed. If I was on the deed, I'd get the property in its entirety.

https://law.lis.virginia.gov/vacode/tit ... n64.2-200/

It seems to me the best course of action in order to mitigate both of these, is to lose the elderly tax relief, and put myself back on the deed as joint or hold solely by myself.

Edit: Yes he does have a job and has income, as well as a townhouse of his own (Says he has $150k equity), and some stocks or so I hear.
Edit2: Yes their combined income would likely make them unable to be eligible for the tax relief. This isn't that big of an issue as I am the only one paying the mortgage anyways and will be going forward.

Does my logic seem sound? Does anyone else have an opinion?
No offense taken. My dad is 68 and his wife is 12 years younger.
I have no interest in the house and no expectations about inheriting it.

In your case, since they will lose the tax benefit anyway due to income, I'd put the house in my name (solely) and be their landlord. A prenup is a good idea but it can be challenged in court. A judge isn't bound to uphold a prenup.

I don't see anything wrong with protecting your assets from the new husband. You can't know his intentions or those of his family. A friend lost his mom who was around 65. She had no will and over $500K in assets from life insurance/pension/retirement. Assets went to her husband. He died shortly after with no will. The entire $500K+ went to his kids. My friend and a sibling got nothing.

mouses
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by mouses » Thu Jan 18, 2018 2:27 am

dm200 wrote:
Wed Jan 17, 2018 1:44 pm
alpaca1 wrote:
Wed Jan 17, 2018 1:02 pm
Thanks everyone. Great amount of info on this forum!
I contacted a titling agency and I'm going to pay a relatively small fee ($250) to get my name added back in to the deed. Great insurance in case something does go south.
I'm also going to contact some attorneys to see if she would like to draft a will.
Edit: Not sure if I mentioned this or not but we do have a TOD deed as well.
How much of the real estate tax relief will she lose?

In our case, we save $6,000 a YEAR.
On my house, it's a puny $300 out of a total of $10,000 in property taxes.

alpaca1
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Thu Jan 18, 2018 7:06 am

It brings me to another question then..

In VA, would anyone know if I held the deed in joint tenancy with my mother and if she were to pass.. would the deed of the home automatically fall to me? Or her new spouse?

I'm pretty certain it will fall to me, but just in case.. because some of you have been talking about legal loopholes people have taken and I need to know if that's a risk as well. I know that there were some mentions of lawsuits being brought up by a spouse during a divorce to dig into what the other person owned, but let's keep that out of the picture for now.

c1over8
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by c1over8 » Thu Jan 18, 2018 9:02 am

alpaca1 wrote:
Thu Jan 18, 2018 7:06 am
In VA, would anyone know if I held the deed in joint tenancy with my mother
Deeds are public record. Anyone who has a copy of your deed or requests one from the circuit court (most if not all circuits charge only .50 per page for copies and anyone and their cat may request a copy) will know who owned the property and how (i.e., JTWROS or TICs).
alpaca1 wrote:
Thu Jan 18, 2018 7:06 am
and if she were to pass.. would the deed of the home automatically fall to me? Or her new spouse?
If you owned it JTWROS title will automatically pass to you. If your mom's estate is not sufficient to pay her spouse's elective share claim (if the spouse makes one), your title in your mom's interest in the real estate is subject to divestment to pay the elective share.
§ 64.2-308.10. Sources from which elective share payable.

C. If, after the application of subsection A, the elective share amount is not fully satisfied, amounts included in the decedent's net probate estate, other than assets passing to the surviving spouse by testate or intestate succession, and in the decedent's non-probate transfers to others under subdivisions 1, 2, and 3 b of § 64.2-308.6 are applied first to satisfy the unsatisfied balance of the elective share amount.
§ 64.2-308.6. Decedent's non-probate transfers to others.
The value of the augmented estate includes the value of the decedent's non-probate transfers to others, not included under § 64.2-308.5, of any of the following types, in the amount provided respectively for each type of transfer:

1. Property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent's death. Property included under this category consists of:
...

b. The decedent's fractional interest in property held by the decedent in joint tenancy with the right of survivorship. The amount included is the value of the decedent's fractional interest, to the extent the fractional interest passed by right of survivorship at the decedent's death to a surviving joint tenant other than the decedent's surviving spouse.
So my prior advice stands - if you aren't going to have your mom transfer full title to you, have your mom get a prenup and hope she doesn't change her mind and agree to revoke the prenup down the line.

alpaca1
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by alpaca1 » Thu Jan 18, 2018 9:18 am

c1over8 wrote:
Thu Jan 18, 2018 9:02 am
alpaca1 wrote:
Thu Jan 18, 2018 7:06 am
In VA, would anyone know if I held the deed in joint tenancy with my mother
Deeds are public record. Anyone who has a copy of your deed or requests one from the circuit court (most if not all circuits charge only .50 per page for copies and anyone and their cat may request a copy) will know who owned the property and how (i.e., JTWROS or TICs).
alpaca1 wrote:
Thu Jan 18, 2018 7:06 am
and if she were to pass.. would the deed of the home automatically fall to me? Or her new spouse?
If you owned it JTWROS title will automatically pass to you. If your mom's estate is not sufficient to pay her spouse's elective share claim (if the spouse makes one), your title in your mom's interest in the real estate is subject to divestment to pay the elective share.
§ 64.2-308.10. Sources from which elective share payable.

C. If, after the application of subsection A, the elective share amount is not fully satisfied, amounts included in the decedent's net probate estate, other than assets passing to the surviving spouse by testate or intestate succession, and in the decedent's non-probate transfers to others under subdivisions 1, 2, and 3 b of § 64.2-308.6 are applied first to satisfy the unsatisfied balance of the elective share amount.
§ 64.2-308.6. Decedent's non-probate transfers to others.
The value of the augmented estate includes the value of the decedent's non-probate transfers to others, not included under § 64.2-308.5, of any of the following types, in the amount provided respectively for each type of transfer:

1. Property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent's death. Property included under this category consists of:
...

b. The decedent's fractional interest in property held by the decedent in joint tenancy with the right of survivorship. The amount included is the value of the decedent's fractional interest, to the extent the fractional interest passed by right of survivorship at the decedent's death to a surviving joint tenant other than the decedent's surviving spouse.
So my prior advice stands - if you aren't going to have your mom transfer full title to you, have your mom get a prenup and hope she doesn't change her mind and agree to revoke the prenup down the line.
This.. is the most informative forum I've ever been on. Thanks a lot everyone!

Everyone is able to suggest things, but also back it up with the law or past experiences.

afan
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by afan » Thu Jan 18, 2018 5:38 pm

The safest seems to be to have mom transfer the house to child. Child would then have the "normal" situation of owing money on a mortgage for a house that child owns. Nothing happens at mom's death since child owns the house and is liable for the mortgage.
This may cost more money, but if child no longer has the second home, that should free up cash to cover the increase in property taxes.

Half measures that try to give child control of the house without appearing on the deed are just that. If the tax break is aimed at "elderly" people living alone, in homes they own, on limited incomes, that does not seem to describe the situation if OP moves in or if new husband moves in. In other words, the cost of the house will be what it should be. If that is too much, then mom can move in with new husband and OP can sell the house. Or move in and pay the full costs.

Privacy is one thing when moving in with mom. Privacy is quite another when moving in with mom and new husband. That does not sound like a good situation for anyone.
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clemrick
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by clemrick » Thu Jan 18, 2018 6:15 pm

alpaca1 wrote:
Wed Jan 17, 2018 11:44 am
dm200 wrote:
Wed Jan 17, 2018 11:22 am
alpaca1 wrote:
Wed Jan 17, 2018 11:10 am
Sorry, I don't mean to offend anyone with the 67 being considered "elderly". A previous poster was correct in that I just referred to her as being elderly because she qualifies in the county to take advantage of tax relief, which saves me about $6000 a year.
I do understand that some people are alarmed I would have put myself into this position in the first place, but I assure you being an only son and since it's a situation where we have mutual trust, I was OK with it. Don't get me wrong, she is in no way going to deeding the home over to her new husband or anything like that.
Unless he's a hypnotist or does some SERIOUS manipulation, then the risk scenario here I see is:
1.They get married, live together for a while and share a joint account then get divorced. And although he didn't pay the mortgage, or any bills.. he still tries and gets a lawyer to come after half of the equity in the property.
2. They get married, mother gets a serious illness and dies within a few years. Does the spouse get the property? According to the law, it looks like they would be eligible for 1/3 and I'd get 2/3, if I was not on the deed. If I was on the deed, I'd get the property in its entirety.
https://law.lis.virginia.gov/vacode/tit ... n64.2-200/
It seems to me the best course of action in order to mitigate both of these, is to lose the elderly tax relief, and put myself back on the deed as joint or hold solely by myself.
Edit: Yes he does have a job and has income, as well as a townhouse of his own (Says he has $150k equity), and some stocks or so I hear.
Does my logic seem sound? Does anyone else have an opinion?
I would check with an estate attorney, but it seems to me that if she had a will, he would not be entitled to a share in HER house. IMO, she should have a will.

One possibiity - again check this out - would be for them to have separate "legal" residences after marriage.
I think checking with an estate attorney is a good idea.

I just called the land records office and they told me that if she did a quit claim, half the equity in the house at the time would be taxable? This sounds like BS to me? There's no money changing hands.. and I can't find anything that talks about this.
No, they are correct about owing taxes. When you quitclaimed the house to her, you GIFTED her your ownership in the house. The house has value, just like money, and it can be taxed. The Gift Tax is owed by you, unless you filed the proper form to apply the amount against your lifetime $5.6 million untaxed gift limit allowed by tax laws.

If she quitclaims back to you, then SHE owes the tax (tax is paid by giver, not receiver) or can claim it against her $5.6 untaxed gift limit.

I am also amazed your mortgage company hasn't called the mortgage in due to the change of ownership.

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BL
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Re: [Virginia] Transfer on Death Deeds .. New Husband?

Post by BL » Thu Jan 18, 2018 7:12 pm

Lastrun wrote:
Wed Jan 17, 2018 3:54 pm
I am not ready to give up on this, I think the OP needs some good advice and/or a talk with the local Commissioner of Revenue. Each county is a little different and I would be upfront and honest in what I was trying to accomplish.

I think many of the responses on here are great----prenup with waivers, a good will, etc. But they don't resolve the issue in the entirety. The simple issue is that Mom has fee simple title to the real estate while she is alive. This is the danger.

So to help the OP we need to think of a way to divest Mom of sole title so she can, or limit her ability to, defeat the TOD during her lifetime, ALL WHILE still qualifying for the reduced property taxes. This is the ultimate tension--we want Mom to be the sole owner for property tax relief, but not for purposes of title transfer.

Just some random thoughts:
1. Would a life estate work? I have not tried this in VA in terms of property tax relief. This would create a remainder interest that could only be defeated with the OPs consent.

2. Would a VA land trust work with OP at the trustee and Mom as the beneficiary? Would this still qualify for property tax relief?

3. I am fairly certain an irrevocable trust will not qualify for tax relief because we use such trusts TO QUALIFY clients for tax relief by moving liquid assets out of the estate.

4. I think a simple revocable trust will simply create the same issues since Mom would have the power of revocation

Just thinking out loud.
1. I also wondered if a Life Estate would be useful. Parent could live there indefinitely, son or daughter would inherit on her death (with step-up, AFAIK).

Wills and TODD can be changed at any time.

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