Legal Question in Wills and Trusts in Utah

Re: Sale of Home to Relative

Once the property is transferred to our grandmother, it is hers, and other potential heirs cannot come back years later and challenge the will. You don't state what other heirs may have an interest in the home, but unless this was a second marriage, even the children would not have any interest in anything until grandmother dies. Once title vests in her name, it is hers and she can do with it as she sees fit, unless there was some restriction in the will. However, the problem in selling the house to you for less than fair market value may have tax implications--the IRS may challenge the transfer and claim that the difference the purchase price and the fair market value is a gift, and that a gift tax return should be filed. However, assuming that your grandmother's estate is not subject to estate taxes (less than $1.5 million), I doubt the IRs will get involved, because no tax would be due anyway.

Re: Sale of Home to Relative

There are several approaches to this problem. I suggest that grandmother place the house in an irrevocable trust, reserving to herself a life estate (can live there as long as she is capable or until she dies) with the trust giving you title to the house on her death. The other children could not contest this if properly drafted. It would also help protect the house from unexpected events in your life (some sort of disaster which results in a judgment against you or bankruptcy.)

She can sell the house to you, and if anywhere near a reasonable price, then the transaction would be final. However, small minds can always challenge - but they would not likely prevail. Grandmother can put a provision in the trust that if anyone challenges her gifts that they get nothing. Regardless of what she does, it would be wise to have a trust just to protect her estate from probate and dissenting relatives. The cost of such a trust is far less than the cost of probate.