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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Family Law
Satisfied Customers: 41221
Experience:  I provide family and divorce law advice to my clients in my firm.
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My step mom has a life estate in our family house granted by

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My step mom has a life estate in our family house granted by my father in a pre-nup. He died in 2002, leaving a well done will and a family trust which now owns the house and of which I'm the executor. The step mom has always been, and continues to be, a real problem for everyone, including her own 4 grown kids and us. She's an out of control spender, running up over $50k of credit card debt before my dad married her, and generally being irresponsible. Her own kids want little to do with her. She's tried several dirty tricks, like extending a line of credit secured by the house, giving away my dad's car (not hers), trying to change 2 timeshares into her name and more. (sigh)

Our family house is a large 5 bedroom 2 story house. My dad started building a master suite downstairs after he married stepmom because his knee and hips really bothered him climbing the stairs. He died mid-construction and my sister and I were left to pay over $160,000 to complete the construction. She lives in this huge house alone except for a renter she's letted out to against our wishes, and we would like to use this asset to benefit everyone, including her, and help us out of this mess.

We've paid all the taxes and insurance and HOA up until now, because we know she couldn't, but we've both run up on difficult financial times. We know that a person with a life estate is responsible for taxes and insurance (right?) but now we can't pay them anymore and we don't want the house to go to the state or probate. How can we compel her to do so?

An additional complication is that we were told that since she has a life estate and enjoys all the benefits of ownership short of selling the house, that we shouldn't change the title until she dies. Thus, it's still in my Dad's name. I now know that we had 3 years from his death to change it and that if we change it now, they'll re-assess it to current market value. We're 5 years past the deadline and a tax advisor told me that if we go ahead and change the title into the name of the trust, as it should be, that the house will be liable for current market assessment for the 5 delinquent years, but then they should take it back down to our grandfathered rate we rightfully should have inherited from my parents. Any opinions?

We've offered her a plan whereby if she moves into a nice 2 bedroom townhome, we'll pay all her taxes / insurance / HOA as well as honoring the life estate for the rest of her life, but she refuses to even communicate with us, much to everyone's consternation.

How do we compel her to move?
She does have to pay the taxes and insurance with a life estate, right?
By paying the taxes, that doesn't give her any title to the house, does it?

Thanks, Kirk
Kirk,

Thank you for your question. You are in a very thorny situation here, as you have a party that directly refuses to deal with you in a legitimate manner.

The problem is that if you wish to keep the home, you remain responsible for it. You are absolutely correct that the life tenant has to pay all short term taxes on the property, not commit waste, and pay interest on the mortgage if any. The best solution, should she fail to do so, is to consider a suit by the real owner of the property for breach of duty and for committing waste on the premises--through this suit you can try to force her to pay the fees, but really, short of losing the property via foreclosure, you are truly stuck.

I am sorry.
Customer: replied 6 years ago.

Thanks for your answer. We didn't address this:

 

An additional complication is that we were told that since she has a life estate and enjoys all the benefits of ownership short of selling the house, that we shouldn't change the title until she dies. Thus, it's still in my Dad's name. I now know that we had 3 years from his death to change it and that if we change it now, they'll re-assess it to current market value. We're 5 years past the deadline and a tax advisor told me that if we go ahead and change the title into the name of the trust, as it should be, that the house will be liable for current market assessment for the 5 delinquent years, but then they should take it back down to our grandfathered rate we rightfully should have inherited from my parents. Any opinions?

 

Also, there's an issue of whether my dad had the right to give her a full life estate in the first place. My mom and dad both had 50% ownership of the family trust which owned the house and all assets. When mom died, her half went into the family trust, not to my dad. He subsequently granted a life estate to his new wife through his pre-nuptial with her in a house he only had 50% ownership of.

 

Your thoughts?

Thank you for your follow-up.

I will be happy to address the other questions for you:

An additional complication is that we were told that since she has a life estate and enjoys all the benefits of ownership short of selling the house, that we shouldn't change the title until she dies. Thus, it's still in my Dad's name. I now know that we had 3 years from his death to change it and that if we change it now, they'll re-assess it to current market value. We're 5 years past the deadline and a tax advisor told me that if we go ahead and change the title into the name of the trust, as it should be, that the house will be liable for current market assessment for the 5 delinquent years, but then they should take it back down to our grandfathered rate we rightfully should have inherited from my parents. Any opinions?

The tax advisor is correct--if you do transfer it today, ti will be assessed at today's market rates (which, as the rates dropped, may even be a net benefit).

 

Also, there's an issue of whether my dad had the right to give her a full life estate in the first place. My mom and dad both had 50% ownership of the family trust which owned the house and all assets. When mom died, her half went into the family trust, not to my dad. He subsequently granted a life estate to his new wife through his pre-nuptial with her in a house he only had 50% ownership of.

 

Your thoughts?

That is still a legitimate transfer, if he was the trustee of the estate. If he had full rights to utilize the property, even if it was in trust, such a transfer would be upheld by the courts.

 

I am sorry.

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Customer: replied 6 years ago.
Hi Dmitri, One of the remedies you suggested to my problem above was a possible suit for waste of the property and breach of duty. Since the yearly amount we're talking about is below $5000, could we do this in small claims court?
Thank you for your follow-up.

That very much depends on the cause of action. What exactly (specifically) are you alleging that this person did to the property?
Customer: replied 6 years ago.

She hasn't maintained it: Failure to tent for termites, she let the lawn die, she cut down a 40' 30 year old tree in the front yard just because a root was pushing on the sidewalk, etc.. In addition, she's taken in tenants without any insurance to protect us should someone get hurt and sue us.

 

Her failure to pay taxes, insurance and HOA fees has led to penalties as well as risking the property.

Thank you for your follow-up.

Under California law if you have a claim of under $7,500, you CAN bring it to small claims, but you can't exactly sue for waste. That type of a claim is a district court cause of action. Here you can sue for reimbursement of costs, but they have to be direct costs and fees that you can prove you suffered or expended on the premises when that duty was the other person's. In other words you cannot sue for breach of her duty and for waste but you can sue for reimbursement.

Hope that clarifies.
Dimitry K., Esq. and 4 other Family Law Specialists are ready to help you