Residence in life estate with parent and 2 siblings

[tprice]

Family member is in life estate with sibilant and parent on parents primary residence. Parent is in nursing home/assitted living under medicaid.

Now that it is time for the 2 to start splitting costs of house and upkeep one wants out and is willing to sell their share

My question is can this be done without disturbing the life estate

Needless to say I know tax implications but that is only part of life estates I know about basically.

Thought maybe someone here has dealt with stuff like this before , IDK

TIA

[Hogg]

Yes

[Buck70]

Quit claim deed

[tprice]

Let me throw a wrench in this, figured someone here has dealt with this

Both parties are considered best route is to sell house completely and be done

I assume that Mother in Law part will got straight to medicaid and wife and her sister each get their part. I do know they use an IRS life expectancy table for MIL but at this point I could care less PLUS wife and sister in law will very little basis and capital gains tax will hit both of them

House will need some repairs , not major but some updates to sell. They have couple folks very interested in buy as is to flip (2 of them are clients of mine that do this routinely).

Concern I have is IF they sell and MIL has more than medicaid allows I know she is off medicaid until money is spent back to under that 2K limit However will not take but few months. My concern is that she could be moved to another nursing home facility . She is really settled in where she is and likes it there plus very convenient for family to go by and see her (NHC Anderson ).

I am trying my best to stay out of this one but both are asking my opinions ,(yep mine was just maintain insurance and basic utilities until she dies and get stepped up basis BUT my Sister in Law is really not in favor of that ). Honestly had you asked me this time last year I would tell you MIL would not live but couple years but she has made a 180 degree change now that she is around people every day and taken care of . She could live 5-10 more years honestly

hate to bother you folks on here with personal stuff but just trying to help my wife and her sister out . Have given them couple of attorneys I deal with to talk with at my expense. Also told them to reach out to medicaid and NHC and ask them as well.

Honestly my idea of buying SIL out is best idea BUT wife just does not want to go that route for concerns of hard feelings down the road when we sell at very good profit.

[Maggie Glover]

I think topics like this are informative for all of us to follow; however, I have no insight other than to offer that the LLM/AI platforms can answer questions like this very well and give you objective direction enough before you start the clock with a professional. I am sure that opinion will anger some on here, but that does not make it wrong. You can literally have a voice conversation with it, versus typing, and it will respond in voice and text for you to be able to archive. My only further recommendation is to do it with more than one platform to compare answers and strategies. Post up what you find, and do so we can learn. My mother will turn 80 this year, and my father just turned 87, so change will come soon for me as well. Good luck, MG

[Highstrung]

yeah, I basically have a lawyer on retainer.. I know what I don't know, and that's a powerful tool in life. There's no grey area with it in the long run hiring one. Capital gains is one of the most disgusting things we've let our government get away with.

[Maggie Glover]

Capital gains is one of the most disgusting things we've let our government get away with.

. Yes except Estate Tax>Capital Gains> Property Tax. MG

[centurian]

We had a similar situation but parents placed their residence in our name (there are 5 of us kids). When they both passed we sold it, paid taxes, and split the money very clean with a group that big. If more than two involved better to sell to keep the upkeep down as some will not want to contribute to upkeep and taxes. I our case some were not really able to contribute to upkeep. I had nothing ventured and some cash after the sale. We could have gotten more for the property but the expenses were a consideration.

[SCSportsman]

I would definitely recommend buying some time from a knowledgeable estate attorney.

Make dang sure that y'all understand the Medicaid 5 year lookback period as that catches a lot of folks.

[DG34YF]

SCSportsman's comments need to be understood by all you young-bloods who's elderly folks own a home.

Many states' Estate Recovery Units don't have fools working for them.

[tprice]

I think topics like this are informative for all of us to follow; however, I have no insight other than to offer that the LLM/AI platforms can answer questions like this very well and give you objective direction enough before you start the clock with a professional. I am sure that opinion will anger some on here, but that does not make it wrong. You can literally have a voice conversation with it, versus typing, and it will respond in voice and text for you to be able to archive. My only further recommendation is to do it with more than one platform to compare answers and strategies. Post up what you find, and do so we can learn. My mother will turn 80 this year, and my father just turned 87, so change will come soon for me as well. Good luck, MG

I (or my Sis and I ) were very fortunate in that our parents handled lot of this prior and Mom had always told my Sis and I to sell IOP house not long after she died to keep problems with family to a minimum down the road. (we sold it 2 yrs after she died and paid dearly in taxes however if Gene and Grace saw that check in Heaven they were smiling/laughing the entire time )

SCSportsman's comments need to be understood by all you young-bloods who's elderly folks own a home.

Many states' Estate Recovery Units don't have fools working for them.

This house has been in life estate for 8 + yrs so they are beyond that 5yr look back.

We had a similar situation but parents placed their residence in our name (there are 5 of us kids). When they both passed we sold it, paid taxes, and split the money very clean with a group that big. If more than two involved better to sell to keep the upkeep down as some will not want to contribute to upkeep and taxes. I our case some were not really able to contribute to upkeep. I had nothing ventured and some cash after the sale. We could have gotten more for the property but the expenses were a consideration.

Yes even though only 2 in this one I could see it being an issue long term when costing each month to maintain insurance and utilities , part of the equation they have looked at. Pay $4-5K yr in basic costs and if she lived 5-7 yrs that would negate a lot of profit that to be made. I am also skeptical due to fact not real sure what crawl space of house looks like. House was built in mid 1970’s

I also would not want it to be a burden to anyone and I know everyone has different financial situations or challenges. I think main reason my Wife is willing to sell now is she does realize the costs if MIL lives quite a while.


It is something folks need to start planning before too late, my FIL went thru this with his Parents house and I was honestly shocked he did not start preparing then but as much as I thought of him he really did not look at long term affects of something like this . Everyone is different

[tprice]

Appreciate all the ideas and help on here, SIL is relying on AI research and while I know AI works I like all my bases covered . Lot of folks will read things that give them the answers they want instead of all the details

[Maggie Glover]

I (or my Sis and I ) were very fortunate in that our parents handled lot of this prior and Mom had always told my Sis and I to sell IOP house not long after she died to keep problems with family to a minimum down the road. (we sold it 2 yrs after she died and paid dearly in taxes however if Gene and Grace saw that check in Heaven they were smiling/laughing the entire time )



This house has been in life estate for 8 + yrs so they are beyond that 5yr look back.



Yes even though only 2 in this one I could see it being an issue long term when costing each month to maintain insurance and utilities , part of the equation they have looked at. Pay $4-5K yr in basic costs and if she lived 5-7 yrs that would negate a lot of profit that to be made. I am also skeptical due to fact not real sure what crawl space of house looks like. House was built in mid 1970’s

I also would not want it to be a burden to anyone and I know everyone has different financial situations or challenges. I think main reason my Wife is willing to sell now is she does realize the costs if MIL lives quite a while.


It is something folks need to start planning before too late, my FIL went thru this with his Parents house and I was honestly shocked he did not start preparing then but as much as I thought of him he really did not look at long term affects of something like this . Everyone is different

I am not so lucky, although I might be. I say that because either my parents have covered all of their bases (according only to them) and my brother and I have nothing to worry about, or it will be a nightmare. They will not so much as give my brother or me limited power of attorney, or review what they have done. My dad was an engineer at a paper mill and had a traditional retirement with them, along with some other modest investments, so it is not going to be life-changing for either sibling. I just do not want a scramble should one or either become mentally incapacitated.

I just say prayers for my time with them and to preserve my sanity when that time comes, because they are not budging. MG

[Carolina Counsel]

I think one of the best things that parents can do for their adult children is to be transparent and open about their estate/financial situation so that everyone is on the same page. While I appreciate that it is the parents' decision, it can certainly be helpful if the future heirs can be involved in the estate planning process.

[Short_track_champ]

I think one of the best things that parents can do for their adult children is to be transparent and open about their estate/financial situation so that everyone is on the same page. While I appreciate that it is the parents' decision, it can certainly be helpful if the future heirs can be involved in the estate planning process.

This.

I have a few friends going through some untimely family deaths, who's parents didn't have their finances in order and were not above board with there current financial situation. Made it a nightmare for them to jump in and try to figure it all out, pay off debts, just to sell the house.

[tprice]

I think one of the best things that parents can do for their adult children is to be transparent and open about their estate/financial situation so that everyone is on the same page. While I appreciate that it is the parents' decision, it can certainly be helpful if the future heirs can be involved in the estate planning process.

Completely agree, for some reason LOT of kids (adult kids) seem to think parents have a lot more money than they do. See it a lot in my office

Was talking with my Son in Law yesterday and educating him on things he and our daughter need to know. Also had a long explanation of retirement savings and retirement plans. He was very interested , did not understand a lot of it. Guess at times we do not educate our kids on personal finance , I take for granted I grew up in my world understanding a lot of these things.

As I tell them you do not have to be Warren Buffet BUT you work for MONEY, you NEED a good understanding of MONEY

I see lot of Sr clients that start getting confused and urge them to get children involved. Heck have seen more than my share of Widows/Widowers that had NO CLUE what they had or didnt have.

[Thumpmaster]

Income trust could keep your MIL below the income limit if you were to sell and put her part in it to cover her care expenses. Going through that with my Dad right now.

[tprice]

Income trust could keep your MIL below the income limit if you were to sell and put her part in it to cover her care expenses. Going through that with my Dad right now.

Wife and Sis in Law met with NHC Administrator yesterday just for Q&A. He basically said same thing they have found on research. IF house sells MIL portion is prorated by IRS life expectancy charts. What ever MIL gets she will be on private pay till that runs out and then back on Medicaid once that amount is below $2K . Medicaid will go thru entire process again of bank statements. (She has zero funds, only money in her account is that Wife/SIL have put in to pay typical household expenses but that is minimal ). Biggest question my Wife had was the chance she would be moved to another facility but they were assured that she is at NHC to stay. Like I said MIL really likes it there, handful of lady’s she has known all her life and they like a bunch of teenagers Honestly nice to see my MIL enjoying last years of her life, she has been miserable last 4-5 yrs and becoming very depressed and not even going outside.

Both my FIL and MIL are/were great people (little odd at times and MIL can be BATSHIT crazy but we all have our oddities ) and he worked hard (Supervisor at Carolina Beer for many years ) to take care of his girls. But like a lot in that generation not a lot of thought of retirement and things like that and his health went down hill very quickly (diabetes and prostate cancer ) and that pretty much wiped out his retirement funds paying for meds. NEVER had a cross word or disagreement with my FIL in all those years , only problem was he would get sea sick in a damn bath tub . Never forget time he got sick in my boat and we were anchored up behind sandbar off Dewees Island , told him to drink more beer he would be fine LOL


But this has all been a learning experience and with wife and I at our age (64 & 63 this fall ) . These are things I understand but my wife was pretty much clueless so been a real education for her.

Again I always appreciate all the help and ideas here and will update as they move along

[Remy]

The majority of adults don't manage their finances well. That goes from lower class folks all the way to doctors, etc.

I'm not commenting directly at the situation in this thread, but if you shield assets so that the government has to pay for your nursing home stay, you should never look down on people taking food stamps, housing ,etc. Just another form of getting the government to pay for something by manipulating the system.

[tprice]

The majority of adults don't manage their finances well. That goes from lower class folks all the way to doctors, etc.

I'm not commenting directly at the situation in this thread, but if you shield assets so that the government has to pay for your nursing home stay, you should never look down on people taking food stamps, housing ,etc. Just another form of getting the government to pay for something by manipulating the system.

Could not agree more, you would shocked to see what I come across in my office with people and their finances regardless of income levels

As for me I NEVER looked down on anyone as long as they play by the rules, even food stamps Whether I like it or not some folks just do not make enough to get by however there are always people that are going to try and manipulate the system anyway they can I just figure some where down the road karma will strike back and not up to me to judge

Naturally as I got older I really understood how well my parents raised me