Legal Question in Wills and Trusts in Massachusetts

Re: Will, Life Estate

Without reading the Will and the Deed it is difficult to answer your question. the number seems very high at the age of 77. Also, it depends on the language of the Will as to what happens to her rights if she permanently vacates the property. I would ask the attorney how he computed her interest to be 39%.

I would suggest you contact an attorney and have him review the Will and the Deed. I would be happy to assist, if you do not have an attorney of your own.

Likewise there are a number of ways to deal with the issue which would protect both her interest and yours depending upon whether Medicare is involved.

Re: Will, Life Estate

The remainder beneficiaries (children) should really hire an attorney. The following is not legal advice, just general information.

It is impossible to know exactly what a life beneficiary's interest is unless you know when the interest is going to be sold. It is dependent on the interest rate, and arguably on the health of the individual if they are not in good health. For a 77 year old, 39% may not be far off, based upon IRS figures. The figure is dependent upon age and prevailing interest rates, typically using figures specified by the IRS. The older one is, the smaller the fraction becomes. The beneficiaries can also argue for a smaller fraction if the surviving spouse is in markedly poor health (worse than typical for someone of the spouse's age.)

Absent restrictions in the will, an argument can be made that the surviving spouse should be entitled to the present value of the surviving spouse's life estate if the property is sold. A surviving spouse with a life estate has the power to block a sale if the spouse does not receive what they think is fair.

A life tenant, barring restrictions in the will, could rent out the property during the life tenant's lifetime. Absent abandonment of the property, it is not clear that a remainder beneficiary would have the right to move into the property during the life tenant's lifetime, without consent.

There are other issues involved, including taxation and estate planning issues, as well as the question of whether there would be an impact on Medicaid (not Medicare) eligibility.

Please feel free to contact my office if you are interested in engaging legal counsel.

Re: Will, Life Estate

Your stepmother has a "life estate" in the house, which makes her the "life tenant." As a life tenant, she has the sole right to use and occupy the property during her lifetime. The life tenant has the sole responsibility to make the payments necessary to preserve the property for the benefit of the "remaindermen" -- which means you and the other children.

The life tenant has the legal right to rent to a third party and keep the profits. No one else may live there without the life tenant's consent. If one of the children moves in without her consent, he or she could be evicted.

The value of the remainder interest does decrease with age. If the property is sold, the value is determined by a table put out by the IRS.

As a practical matter, if the life tenant no longer wants to live in the property, then there should be an agreement to buy out her interest or to put the property on the market and split the profits.

Please feel free to contact me if I can be of further assistance.