you can make asmall amendment to your LT which states exactly what you wrote in your post. Daughter has the right to reside in this residence until her death, but has no ownership rights or powers. If she vacates the house, the Trustee may then do whatever makes sense (sell it, rent it to someone else, whatever). You will want to address maintenance carrying costs. Will she pay for property taxes or insurance? Will she be responsible to maintain the place, to keep it in good working order. Who pays for repairs? What if you need a new roof? Depending on the answers, yuo will also want to leave a pile of money in trust, where the sole purpose of that money is maintaining the house.
your understandning of special needs trusts is mostly correct. we use them for beneficiaries on public assistance in order to protect their benefits. there are EP attorneys out there who do a LOT of this stuff. Steve Dale in Walnut Creek, CA is one of them. but they are not as expensive as you may think.
as for providing money for your daughter. its easy enough. arrange for the trust to pay for certain of her expenses, and to do so directly. or limit distributions of money to her to certain purposes.
I’ll send an email with my real address. I use the abc@abc.com thing to keep the robots of collecting my email address.
I have had a coulple of deals that involved Life Estate. My basic question to Mr Bronchick and anyone else is are they legal and under what circumstances?
I do not dispute that almost anyone can put their property in a so called Life Estate to be passed to some one else upon their demise. But can they legally pass the property to sucessive heirs at the same time?
If they can, does that not negate the intervening owners from having full control of their legally transfered property? How can anyone logically believe that someone who legally owns the property, even through a life estate has no say so in what he may do with the property, i.e. sell it? It seems to me that a Life Estate should only be able to be legal through the first heir and then he/she should have the right to do with it what they want? What do you think?
This question was asked before. The bottom line is, no, I don’t think that a testator or grantor can transfer property to a life estate beneficiary subject to successive reservations. After the first generation takes (as a grantee or distributee of an estate or trust), they are free to transfer or encumber their interest, so long as it does not inure to the interest of the remainderman (the person holding the portion of the asset that’s subject to the life estate.
Otherwise, show me how you COULD comtrol successive generations. I spoke to several highly qualified pbt/RE attorneys about this very issue in the last 30 days and they agree with my assessment.
Rick The probate Guy-So what is the easiest way to protect an estate from a wasteful heir? My daughter is over 55 and is a problematic person. My son is not. I have it set up so my daughter’s portion will remain in trust until her death(she has no children or husband) with my son being the successor trustee. I was thinking maybe my son could create a life estate after my passing. Does anyone know if this is a good idea?
it is absolutely possible to create a life estate in one party, with the remainder in another party. there is a huge body of property law concerning contingent and vested remainders, executory interests, the rule against perpetuities, etc. you can’t tie up a property forever, unless, of course, you are in a state which has repealed its R-A-P. like Alaska.
But these interests are now rare, as TRUSTS have taken over. Trusts are far more versatile, elegant and user-friendly than the old remainder/life estate stuff.
trusts are also subject to the perpetuities rules. but if you really want to tie something up forever, and its valuable ebough, go to Alaska or South Dakota or a couple other places, or go offshore to the Isle of Man or Cook Islands…
You’re wrong. The grantor may create a life estate subject to a condition subsequent i.e O to A for life, but if A is divorced, to Z.
A grantor may create successive life estates i.e O to X for life, then to y for life then to Z.
A life tenant may transfer their interest but the measuring life remains the same. A life tenant may encumber the property only with consent of the future interest holder (whether the interest is a remainder or a reversion).
If the grantor retains a reversion he may defeat a remainder interest—O conveys to A for life then to B’s children. If before B has children O acquires A’s life estate then O’s reversion and acquired life estate merge–O has fee simple interest. B’s children have no interest.
Poor Jack thinks any interest subsequent to the life estate is invalid and he now thinks your muddled answer supports his premise. You two deserve eachother.
Rick. Thanks very much. That is exactly what I thought and makes the purchasing of the property from any successive generations very suspect to say the least.
this is an easy job for an experienced estate planning attorney. I practiced for 20 yrs in CA. there are many ways to maintain control after you are gone. a trust arrangement can take hundreds of different forms. children can be treated equally, but non-symmetrically. an irresponsible kid can be cut out entirely, or can have her share help in trust and doled out slowly. or doled out only for purposes set forth in the trust. and my trusts contained “hold-back” provisions, whereby the Trustee could deny, delay or condition trust benefits in circumstances of alcohol/drug abuse, gambling, destructive cult memberships, self-destructive behavior, incarceration, or other circs where it apears the bene will immediately waste or give away the property. drug and alcohol testing are permissible conditions to receiving benefits.
trust instruments are extremely versatile and adaptable, and can be tailored to your facts and circs.
but don’t expect a living trust shop to be able to do this. find a pro.
Mel - What you’re asking is an estate planning question. I’m not qualified to answer. Best bet would be to talk to an attorney that specializes in such matters.
When these type trust are created to address a wasteful beneficiary, planners often provide for a spendthrift provision limiting the problem child’s ability to waste the assets. Also, I see a fair amount of special needs trusts that are drafted in such a way as to provide limited distributions via a third party fiduciary or similar person, so the bene can’t get into too much trouble (so the theory goes).
I’ll bet it won’t be very difficult to achieve the objectives you seek, tho’.
Nike. What is it with you? Are you a lawyer with a degree or what? Your explanation makes no sense to the average individual. Get off your high horse and explain why and where for you are talking about. I would like to believe what you say, but you give no proof or back up to your opinions. Therefore, I or anyone else haft to assume they are only that, opinions. Put some proof to it buddy!
You may be right. I’m not an attorney and that’s why I took the time to contact not one but two, very high-profile CA probate litigators before answering.
I didn’t receive any cites to CA PC or cases so it’s just straight from my sources. My desire was to be helpful, but if I gave “poor old JacK” a bum steer, that sure wasn’t my intention.
Of course, you don’t cite either, nor ID state reference, however you seem to post with some confidence.
Further question. If the Life Estate is found to be illegal, how could the problem of Adverse Possession effect it? Since by its nature the Life estate is bound to covever an extended period of time, and is then challenged, could the litigants not have a good case for Adverse Possession? How can this be contested.
Thanks to both of you. Im more of an oldie than a goodie these days-so that theory goes. My other theory is that Rick is more than qualified than probably most attorneys out there. I have spoken to numerous estate attorneys and the problem here is that they all give conflicting opinions some have even gone so far as to suggest selling all 3 properties and purchase an annunity (they have good friends that are finincial advisors)Bad Idea-to many fees and I wouldnt know which one would not lose value-R.E. will give my daughter at least a small stable roof over her head (dont want her to be able to sell or lien it only live in it or rent it until her death. Part of the problem is finding a “pro” How do I do that? I already have a living trust. It states 50/50 with my daughters share staying in the trust with my son as trustee-which is fine since he has done very well for himself and my daughter definately has not. Special needs from my understanding is highly complicated, expensive matter and is best for people receiving some sort of governament assistance so they wont lose benefits and can recieve their inheritance in monthly increments. I would like to attend your probate seminar but I am too far (so cal desert area)and am not well enough. I enjoy all your posts and only come on the computer once a week-I spend most of my time in my garden when I am able I am old enough to be your father and Jimmy’s father and then some. Jimmy do you still practice law are you still in Ca? How would I reach you? Thank you both again.
The reason is Nike usually does not know from where he/she speaks. He uses the hostile sarcasm to cover up that he does not quote any authority (other than his self as he thinks he is a legend in his own mind) and therefore does not need any.