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John Elder
John Elder, Estate & Elder Law
Category: Estate Law
Satisfied Customers: 4631
Experience:  Over 14 years experience in Medicaid, Estates, Trust.
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Hi. What is the formula for determining the value of the life

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Hi. What is the formula for determining the value of the life estate and the remainderman value of the home. Thank you.
Welcome! Thank you for your question.

In what context is this value needed? The value can vary depending on what agency the value is being used.

For example the IRS uses a different value formula than social security and Medicaid.
Customer: replied 3 years ago.

The man who is in my Mom’s home in a life estate is fixing to allow his foster daughter to live there and has a history of drug use She also has 2 young children and going through a nasty divorce with 4 restraining orders during this time for domestic violence. AS the remainderman I do not want this to happened and KNOW it will damage the home, lower it’s value and cause the risk of violence at my family home. This man knew my mother 2 years before she died and it is still hard to believe she let him live there after being with my father for 45 years.


 


I want to let him buy it and need to figure the amounts.

Here is an easy table that Social Security uses to value life estates and remainder interests. https://secure.ssa.gov/POMS.NSF/lnx/0501140120

It is much easier to use than the IRS formula valuation system.

Letting him buy you out or you buying him out are probably your best options if you can come to a reasonable agreement.

Your alternative is if they do damage the place then you can sue him for "waste." A life estate holder has an obligation to keep the property up and not do anything to damage the value of the property for the remainder interest holder. His estate would also be liable for this damage after his death if he has assets to go after at his death.

With that said, litigation can be very expensive. You could possibly get your expenses paid if you win but could spend more than 10K before you get through a lawsuit for waste. That is why your settlement discussions are likely the best for everyone.

I cannot provide you with legal advise. I have provided you with information about the law related to your question. My answer, and any information that you find online, should not take the place of having a consultation with a lawyer in your area to advise you regarding your specific issues.

Please show your appreciation for my candid, accurate information by clicking VERY INFORMATIVE, OR the OR and positive feedback. You should only rate me if you are satisfied with the information I provided you. If you cannot rate me GREAT please do not rate. Give me a chance to make it right by clicking REPLY TO EXPERT.

I appreciate your question and repeat customers. You can request me by beginning your question with "Dear XXXXX..."

Thank you,

John

Customer: replied 3 years ago.

1) If we decide to send a legal letter through an estate atty stating his foster daughter with the current drug history, vilolence, little kids and risks involved to the home cannot take place..... do we have a good case? in your opinion. Thank you

Unfortunately you cannot prevent or limit his use of the property in any way. Until there is physical damage sufficient to cause a decrease in value then you have no case against him with regard to the property. In fact, it would be fine if she damages the property so long as he repairs within a short period of time so as to have the property retain it's value.

Customer: replied 3 years ago.

I am confused, I thought I had the right to also protect MY interests in the home since it comes to me. The man with the life estate living there is 80 years old. HOW will I even know what has occurred. I have read the divorce which is public record and do not want this risk to my inheritance.


 


What I have read in articles tells me that as remainderman, the life tenant is supposed to keep me informed of any changes or risks to the home. I am not totally out of the picture.

You are not totally out of the picture. The life tenant is not required to inform you of anything. You have to take it upon yourself to continually review and check on the status of your asset. You can know he died if you check the county death certificates regularly. His death certificate will be a public record.

The rights you have are the ones stated in my original post. You have the right to recover any damage he does to the property. He has exclusive use while he is alive but he cannot do anything that harms the property. Once he harms the property, you can step in.
Customer: replied 3 years ago.

Thank you. But your answers leave many questions and no direction for us. We will seek out an attorney and get answers.


 

Chuck,

Not sure what you mean. I gave you the direction of yes, you can offer to sell or buy him out. I also stated that you cannot take proactive action but can take action if he in fact does something that were to damage the property.

I understand that this may not be what you wanted to hear. However, the law sometimes does not support what you want it to. I can only provide you accurate information regarding the law.

I would hope that you could appreciate my candid information and rate me with five stars.

John
Customer: replied 3 years ago.

"Not sure what you mean. I gave you the direction of yes, you can offer to sell or buy him out. I also stated that you cannot take proactive action but can take action if he in fact does something that were to damage the property”.


 


How can we know there is damage to the property to make sure he is taking care of it. When the Life Tenant sold is little home he had, after moving in with my mom, he had rotten wood all over his house, water damage, plumbing issues and more. He tried to fix it all himself and did not pass a repeat inspection and HAD to call in a professional. This is proof that he will not take care of the home and NOW his foster daughter who uses drugs and has ALL kinds of issues and documented violence and 2 small children in the home. There has to be some way to protect my family home . I NEED TO KNOW THE HOME IN IS GOOD REPAIR NOW. That is the direction I need help with.

You do have a right to go and inspect the property from time to time. You must exercise this right within reasonable limits (meaning that you cannot go over every day.) Checking on the property once a month or every other month is certainly reasonable. If he refuses to let you in then you can request the assistance from a sheriff deputy. You can possibly check more often if you are just looking outside for signs of damage. The tight line you are walking is your right to assure your future interest is protected and not crossing over to interfering with his right to have exclusive enjoyment of the property while he is alive. I wish the law gave you more, but it does not.

You have to understand that speculation based on past actions is not enough to warrant a lawsuit for waste.
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