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Lifetime tenancy, Life esate..etc ?

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fbhester

Junior Member
What is the name of your state (only U.S. law)? Pa

My Wife and I are willed A Farm from her mother (father desceased) What we want to know are fair and legal method to transfer ownership to us with securing her life tenancy rights beside joint ownership with survivorship. With that her mothers issues (age 84) issues are her liability from grandchildren, place to live and have say so on her house. Life Tenancy isnt a issue as we want to build a house on another site on the farm, but we want to make Improvements and have no suitable solutions to make her comfortable. Since JOWSR doesnt do it, what are the other options we could persue.

Inherentance tax is also a convern. Does Lifetime inherithence exemtions apply to real estate:
 


anteater

Senior Member
Inherentance tax is also a convern. Does Lifetime inherithence exemtions apply to real estate:
If you are asking if a transfer with a reserved life estate is subject to the PA Inheritance Tax, the answer is yes.

4. TRANSFERS IN WHICH THE DECEDENT
RESERVED A LIFE INTEREST
Include transfers that the decedent expressly or impliedly
reserved for life or any period which does not, in fact, end before
death the income or the enjoyment of the property. For example,
a reservation of life interest in real estate includes the right to use
or occupy the real estate or receive rents. Continued occupancy
without the actual payment of fair market value rent is one
example of a reserved life estate.
 

fbhester

Junior Member
Thank You

Yes, that ansers one of the questions. Thank you.

I guess the other concern are or can there any provisons in a standard or modified deed to give irrivocable/conditional life tenacy or occupancy to a person?
 

fbhester

Junior Member
Observation Question?

I finaly found time to go through some of the post on the site in several thread and It seem courious to me that in simular post as this one/ every one seems to shy away from Life estate and tennacy questions. Ive also seen this on other sites? Looks like glancing attmepts or cherry picking at cerrtain parts of the questions. Are these that complicated, just generaly frowned apon or dark areas? Just a courisity? :rolleyes:
 

tranquility

Senior Member
There are complex legal and tax issues involving such things along with a certain disregard by OPs for their goals and instead focus on their purported solution.

I think you can accomplish what you probably want in a better way. But, no one is going to pull teeth in an attempt to discover your goals. This is the internet and we are confined to little boxes. Better would be to go to an attorney who will talk with the parent and frame the best solution.
 

fbhester

Junior Member
Understood....

Not my intention to a lawyer or avoid a legal route. Just to educate myself to ask the right questions ans understand the answers as they apply to our situation. Past experiences have left me wanting after a consult or being told what they wanted me to do, not offering all options. Or simpler expressed, only being told what I can't do.

The original goal to find a legal way for Mom to feel comfortable and protected and we could invest and improve property before we got into our retirement years.

Tax implications may be secondary as the Tax Liabilies stand today, paying them is well worth the lost time. (wifes family are tradionally long livers).

Her concerns in Joint Tennancy are if her daughter would pass before her, She would have Estate taxes in taking the property back, then liability of her grandkids at the property in addition that she has a irrevokable right to live there.

Our Concerns are to protect ourselves, and Lookback laws
 
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tranquility

Senior Member
Tax implications may be secondary as the Tax Liabilies stand today, paying them is well worth the lost time. (wifes family are tradionally long livers).
What is her basis? What is the FMV of the property today?
The original goal to find a legal way for Mom to feel comfortable and protected and we could invest and improve property before we got into our retirement years.
Invest? Improve? What kind of property are we talking about? Why not loaning the money to mom for her to rehabilitate the property and her paying with a balloon note at death or some long future date? Put the property in the trust for you to inherit it as well. That way you protect your interest (Albeit, not the lookback.). How much money does she have? How much do you have?

Ages, wealth, timing and other issues all intersect. You should look carefully with an expert before having mom give you a gift of however much which limit her options.
 

fbhester

Junior Member
Answers

Basis $8000 (1959 +/-) FMV .... $300-350K

Land Improvents, Modernize the House.. Rebuild barns Etc.. Build a One story Guest house. (for mom)

well never know how much money she has..lol... She has Insurance Inniuties for the two other siblings that they are benificuries of that are comparable value to Her valueation of the farm. We dont know the cash value of them. (this matter was dicussed and approved by all siblings 5 years ago).

Moms personal assests comfortable but unknown.

Shes 84 and in Good health exception of diminishing movement.

We can do about what we want to do in terms of cash, Most assets are pension.

We are 50/51.

Clarification**************... Inheritence Tax was the reference to paying.
 
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tranquility

Senior Member
Without looking at the tables I bet you'll have a gift of $250K for the residual estate. The money you put in is sunk and will only help with the basis on sale. Just as a head's up, say you are gifted the house subject to the life estate. Mom has the Obamacare adviser visit her to let her know it's OK to go. And, she does. If you haven't put in any money yet, and the value is $350K, if you sell it immediately you would have a federal tax of over $50K. If you inherited it---$0.

See, but even with the facts I can ask more, and then more. That's why the time interacting with a person is best.
 

fbhester

Junior Member
Thanks

Agaiin just looking for options... Put these on my list of pros and cons and set it with a local real state attouny. It makes more and more sense tho inherit it which is fine as long we can cover our buts. Im not sure the reception well get with the lein/mortage .... Shes mostly smart with me... digs her heals in with her daughter.. Now.... where is the bag of dipomacy and charm i keep for emergencies!!!! :cool:

Sorry for typo in the header... More thanks should have been the comment
 

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