Legal Question in Wills and Trusts in Massachusetts
Revocation of Life Tenancy (Life Estate)
Mother's house & property were transfered to children to hold as Joint Tenants and she (mother) was granted Life Tenancy. This was done 12 years ago. Within the past 6 months she was moved to a nursing home where she will spend the rest of her life.
The children & mother have decided to sell the house and divide the proceeds amongst the children. The attorney for the mother has told the children that because she has a Life Tenancy and is still alive - she will have to receive her portion of the proceeds. She does not wish to do this since all proceeds awarded to her will go to the nursing home. Mother is willing to sign a waiver of her life estate rights, however, the attorney said that he does not believe that this legal. His said that he will have to do further research.
Is there any way around this?
1 Answer from Attorneys
Re: Revocation of Life Tenancy (Life Estate)
One way around this is to wait. All resolves quite nicely upon mother's death.
There is a vehicle called a QPRT (qualified personal residence trust) which would allow mother to give ("gift" used as a verb) her property rights to her children with a reduction in value (a steep discount) from the full value of the life tenancy she now has, so that the nursing home gets even less. You would need to talk about some numbers for me to tell you more ... how old is she, how sick is she (how likely to die within 1 year), how much is the house worth, and by the way, has she ever had reason to file a gift tax return before, that is, has she ever given away more than $10,000 to someone in a single year? Specifically, how did the property come to be owned as it currently is? Did she give away the remainder interest when she was younger? Or was it given or left in a will to her and the children this way in the first place?
It's also possible, depending upon value, that the nursing home has no legal interest in her life tenancy, even though signing such an agreement appears to be a gift. Let me know!
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