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Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 42824
Experience:  Texas Attorney for 30 years dealing in real estate
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Last will vs add as beneficiary vs add as joint owner: My

Customer Question

Last will vs add as beneficiary vs add as joint owner:
My mother has a mortgage that I still pay for her. This house was bought with my father but now divorced and is off the deed. I am the only child and with her being 57 we are deciding what is best for the future to avoid probate. She counts on this property during tax season so I do not wish to mess that up for her. I understand some implications that follows with each decision but would like to get an opinion on what usually comes out as a winner.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. Ray here to help you tonight.

I would recommend a life estate deed.This gives her a life estate and the remainder goes to you at her death.She retains lower taxes as an elderly person, it passes to you upon her death.This saves probate it also prote4cts in case she needs medicaid as it is exempt for her lifetime , passes to you avoiding probate and medicaid estate recovery here.

This is good estate planing here.

Reference to explain it to you.

The Maryland Life Estate Deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of your mother the life tenant.

I appreciate the chance to help you tonight.Thanks again.

Customer: replied 1 year ago.
Hello Ray, thanks for the fast response! I have a few (maybe more than a few) questions. Does life estate deed avoid gift taxes? Would her mortgage be smoothly transferred to me if she passes? What extra information is needed to fill out such form? Any advice on other descriptions that should be written?Thanks!
Customer: replied 1 year ago.
Also, a more frightening question.....What happens if I were to become disabled or pass away?
Expert:  Ray replied 1 year ago.

Does life estate deed avoid gift taxes?

Yes they just report the gift for informational purposes as I set out above.

Would her mortgage be smoothly transferred to me if she passes?

Yes once they pass you contact lender and they have to allow you to assume the mortgage.

What extra information is needed to fill out such form? Any advice on other descriptions that should be written?

Get the property description off the old deed they got.The parents here are grantors you are grantee here thats about it.

Thanks again for letting me help you and the best here.

Customer: replied 1 year ago.
What happens if I were to become disabled or pass away?Do you have a sample blank life estate deed?
Expert:  Ray replied 1 year ago.

Life Estate Deed

This Deed is made on this day of _______________, 20__, between the Grantor _________________________ of address
and the Grantee _________________________ of address

WITNESSETH, That the Grantor, for good and valuable consideration paid by the Grantee, the receipt of which is hereby acknowledged, does grant, sell and convey unto the said Grantee, all the rights, title, interest, claim or demand that the Grantor may have in the following described real property:

Property Address:

Legal Description:

EXPRESSLY RESERVING Life Estate in the above described property unto the Grantor and its assigns. The Grantor shall have full ownership, possession and use of the property, as well as the rents, revenues and profits generated by the property during the term of the Grantor's natural life.

Upon the expiration of the Grantor's natural life, the ownership, possession, use, rents, revenues and profits of the above described property shall revert to the Grantee.

EXECUTED this day of _______________, 20__.

Grantor Name: _________________________

Grantor Signature: _________________________

STATE OF _________________________

COUNTY OF _________________________

On this day, personally appeared before me, _________________________, to me known to be the person(s) described in and who executed the within instrument, and acknowledged that he/she signed the same as his/her voluntary act and deed, for the uses and purposes therein mentioned.

Witness my hand and official seal hereto affixed on this day of _______________, 20__.

Notary's Public Signature: _________________________

My commission expires _______________.

The gift tax exemption is $5,450, 000 for your lifetime so no federal taxes here.You would file death certificate in the deed records when she passes to complete chain of title.Thats it after you record the life estate deed.

You get the property description here from the deed where they bought it.You can get a copy of that deed from county deed records if you need it .

Thanks again for letting me help you.

Expert:  Ray replied 1 year ago.

If you can positive rate 5 stars it is much appreciated .I wish you the best here in court

Customer: replied 1 year ago.
I'm not sure if you have answered this question or perhaps I'm just confused. Can she still sell the property if I passed away before her?Is it a easy process in court?
Expert:  Ray replied 1 year ago.

Here your remainder interest passes to whoever you will it to or if no will under the laws of intestacy.You need to will your interest to her here in the event you predecease.This would be the means to give her your remainder interest in such a situation here.The deed is a one way street, it gives you a vested interest that you take if you outlive her , otherwise your will would return it to her.Thanks again for letting me clarify .