Legal Question in Real Estate Law in New York

Re: Life Estate

In addition to considering Atty Markowitz' most succinct response...

If the "Life Estate" was established by Will or is a part of your father's Estate, you should consult with the attorney who established the "Life Estate," and obtain copies from the Surrogate's Court of any and all documents that may apply to your rights, title and interest in the property. Then decide how you will proceed.

Good luck,

Phroska L. McAlister,ESQ

Re: Life Estate

Q. Does she lose out on the life estate by not taking care of this.

A. The bank will foreclose on the property if it does not receive payment.

Q. What are my rights, I do not want to lose this property.

A. You can pay the bank. The interest paid is a deduction on your taxes.

Q. And she is refusing to give us any paperwork on the property.

A. Deed and mortgage is on file with the County Clerk.

Mike.

Re: Life Estate

This is a case we don't see very often. In fact, you sent me digging through my old casebooks from law school.

This is a case of waste. Waste is a legal term for the wrongful acts of an owner in possession that destroy or diminish the future interest held by a remainderman, reversioner, or, sometimes holder of an executory interest.

To put it simply, you can sue for damages. Your probable recourse when and if you win consists of a judicial sale of your stepmother's property; i.e., just the life estate. There are not likely to be any bidders other than your goodself and your brother.

In the meantime, you will have to protect your interest in the property by paying the mortgage and taxes. I would not rule out the bank's stupidity when it forecloses (i.e., don't count on the bank notifying you of anything) and while the law tries to protect your interest in the property, you might have to pay off the loan, with penalty interest, attorney's fees and lots of other costs, on only ninety days notice (or so). It can be challenging to refinance the property inasmuch as your stepmother is not likely to cooperate in the process.

So, the recommendation is to engage a lawyer, talk to the bank, keep the mortgage (and taxes and insurance) current, and sue.

This post is not legal advice and does not create an attorney-client relationship. It is a comment on the legal question posed by the poster and should not be relied upon unless and until an attorney-client relationship is entered into. Doing so would require signing an engagement letter and depositing a retainer to secure payment of legal fees.

Re: Life Estate

Has this actually taken place by a new Deed? Were you aware the transfer was to take place? What, if anything did you agree to, in exchange for this "gift"? Is there anything in writing? While I concur with Kevin in his thinking, but there are several additional ramifications, in part including value of the property and the outstanding mortgage balance. This is a complicated situation, in part answerable only when I receive answers to my questions. Presuming you have not solicited this transfer nor agreed to any of the conditions, it appears your step-mother (SM) is trying to preserve a place to live, without cost to her. In most instances this is done with consent of the persons to whom the property is being transferred, who have agreed to the conditions. However, the transfer is not binding upon the bank which holds the mortgage. They might consider this a "sale" and call the mortgage, if it is not assumable by a new owner. That could trigger a potential default if not satisifed. Or, they could just let it continue. If you do not like the conditions and want to get out of the life estate, contact the bank, let them foreclose, and acquire the property at a private foreclosure sale. The foreclosure should terminate the life estate, particularly if not solicited by you. Then, by purchasing the property, you would acquire it clean. I also suggest you check (a simple title seach, cost about $150 or so) the terms of the existing mortgage, also for any other liens there may be against the property and judgments against SM, to be sure you are not taking on more than you anticipated. This will also show what was contained in the Deed transferring title to you, which might call upon you to pay other things. Be sure you get copies of all documents. Contact me directly if you have any other questions, or with your answers to my questions.