Legal Question in Real Estate Law in Minnesota

Re: Lifetime Estate

Rather than a contract for deed, why not have all of the people give you a deed, and give them back a mortgage. That way you only need one signatory on the satisfaction when you pay off the mortgage, rather than a bunch of signatures. You should retain an attorney to help you with making sure you get clear title when you purchase the property, because you will need the signature of the elderly person and all of her kids and all of their spouses, and there may be an issue with regard to whether the County will get some of the proceeds.

Re: Lifetime Estate

First of all, I can't tell you for sure what the tax consequences to the sellers would be. It would be best to consult a tax attorney or accountant concerning the tax issues. The last time I checked, upon their parent's death, the children would receive a stepped up basis for capital gains purposes. I would have some fear, if I were them, that the sale prior to the death would impair that stepped up basis.

From your point of view, this sounds messy. I would advise against it. Too many things can go wrong. Too many signatures - the elderly person, and all the children and their spouses - required to transfer title. All you need for a serious problem is for one of those folks to die, file bankruptcy, have a problem with the IRS or wind up in divorce. Any of those events could tie up the property for a while.

It would be much better for you to go get a mortgage and cash them out.

This response is for general information purposes and does not create an attorney-client relationship. You are advised to consult the attorney of your choice concerning the details of your case.