Step Mother Selling House to Her Daughter??

[dinahcat]

What is the name of your state (only U.S. law)? KY

My father died and my step mother has legal ownership of the house and land. She can sell it, or do whatever. However, in the will it states that when she dies, the property will be sold and split between myself my sibling and my step sibling. She has decided she wants to sell her house to her daughter (my step sibling). She is asking a fair price and said that she will give myself and my sibling our equal share. However, her daughter is in a chapter 13 bankruptcy. And instead of getting a loan, which she cannot get because her and her husband walked away intentionally from their very expensive house because they just got tired of paying the payments, she doesn't meet the hardship requirement of explanation for FHA loan during bankruptcy. I suppose this deal was to cut the bank out of the equation because nobody would have lended them any money for the house.

My step mother went to a lawyer and said that her daughter is to pay $550 dollars to her each month then the deed is in her daughters name as long as she pays it until my step mother dies. She's in her early 70's. Then, after her death, she is to continue to pay the amount to a trustee set up by her lawyer, who will distribute the rest of the money to my brother and myself. The trust will include the 550.00 she pays to my step mom every month. Apparently all the money is going into some trust account.

My question is, how is this legal? Wouldn't it be unfair for her to do this with her daughter considering she's also a beneficiary of the property? And, is there any way we can get the money out of a trust, and going to me and my brother each month as a payment. We really wanted a lump sum payment, not a payment each month for ten years that we won't even see, until the ten years are over. There is one good thing, there is an agreement between her and her mother than if she fails to make the payment for six consecutive months, at any time after her death, that the house will have to be sold and split between the three of us and whatever was in the trustee account will be given back to my step sister mins some fees. I'm not sure about any of this.

 

[Ohiogal]

What is the name of your state (only U.S. law)? KY

My father died and my step mother has legal ownership of the house and land. She can sell it, or do whatever. However, in the will it states that when she dies, the property will be sold and split between myself my sibling and my step sibling. She has decided she wants to sell her house to her daughter (my step sibling). She is asking a fair price and said that she will give myself and my sibling our equal share. However, her daughter is in a chapter 13 bankruptcy. And instead of getting a loan, which she cannot get because her and her husband walked away intentionally from their very expensive house because they just got tired of paying the payments, she doesn't meet the hardship requirement of explanation for FHA loan during bankruptcy. I suppose this deal was to cut the bank out of the equation because nobody would have lended them any money for the house.

My step mother went to a lawyer and said that her daughter is to pay $550 dollars to her each month then the deed is in her daughters name as long as she pays it until my step mother dies. She's in her early 70's. Then, after her death, she is to continue to pay the amount to a trustee set up by her lawyer, who will distribute the rest of the money to my brother and myself. The trust will include the 550.00 she pays to my step mom every month. Apparently all the money is going into some trust account.

My question is, how is this legal? Wouldn't it be unfair for her to do this with her daughter considering she's also a beneficiary of the property? And, is there any way we can get the money out of a trust, and going to me and my brother each month as a payment. We really wanted a lump sum payment, not a payment each month for ten years that we won't even see, until the ten years are over. There is one good thing, there is an agreement between her and her mother than if she fails to make the payment for six consecutive months, at any time after her death, that the house will have to be sold and split between the three of us and whatever was in the trustee account will be given back to my step sister mins some fees. I'm not sure about any of this.

The will doesn't matter until she dies. When she dies, the will controls. Until then, she can transfer the property to whoever she wants however she wants to do so.

 

[Zigner]

The will doesn't matter until she dies. When she dies, the will controls. Until then, she can transfer the property to whoever she wants however she wants to do so.

It sounds to me like she was granted a life estate. If that is the case, then she doesn't have the option to sell...

ETA: Of course, if this is not a life estate, then the will doesn't matter anyway since it is no longer controlled by the will at all.

 

[dinahcat]

It sounds to me like she was granted a life estate. If that is the case, then she doesn't have the option to sell...

ETA: Of course, if this is not a life estate, then the will doesn't matter anyway since it is no longer controlled by the will at all.

No she does not have a life estate. The property became hers when my father died. At the reading of the will the attorney was very specific in stating that Ms. XXX may do as she wishes with the property, she could sell it and move to Florida or she could change the will as well. In fact, my own father advised her when he was sick to sell the house and move to Tampa to be by her sister, using the money from the sale.

 

[LdiJ]

No she does not have a life estate. The property became hers when my father died. At the reading of the will the attorney was very specific in stating that Ms. XXX may do as she wishes with the property, she could sell it and move to Florida or she could change the will as well. In fact, my own father advised her when he was sick to sell the house and move to Tampa to be by her sister, using the money from the sale.

If that is the case, then you should consider yourself lucky that she is willing to put some of the money in trust for you and your sister...because obviously she does not have to do that at all.

 

[Zigner]

No she does not have a life estate. The property became hers when my father died. At the reading of the will the attorney was very specific in stating that Ms. XXX may do as she wishes with the property, she could sell it and move to Florida or she could change the will as well. In fact, my own father advised her when he was sick to sell the house and move to Tampa to be by her sister, using the money from the sale.

Then I stand corrected. The house is hers to do with absolutely as she pleases. If she wishes to give you some of the proceeds of the sale, then she is free to do so in whatever manner she chooses. It's not your house, you are out of line for feeling this isn't fair, and for trying to dictate that you be given a lump sum.

 

[latigo]

Then I stand corrected. The house is hers to do with absolutely as she pleases. If she wishes to give you some of the proceeds of the sale, then she is free to do so in whatever manner she chooses. It's not your house, you are out of line for feeling this isn't fair, and for trying to dictate that you be given a lump sum.

Someone needs to get a handle on these trained Kentucky bushy tailed squirrels that are drafting legal documents!

Recently we were presented with wording in an independent contractor's agreement out of Blue Grass country that would compete with a bowl of alphabet soup. Now a last will and testament in which the testator first devises fee simple title then changes his mind. The humidity maybe?

 

[Zigner]

Someone needs to get a handle on these trained Kentucky bushy tailed squirrels that are drafting legal documents!

Recently we were presented with wording in an independent contractor's agreement out of Blue Grass country that would compete with a bowl of alphabet soup. Now a last will and testament in which the testator first devises fee simple title then changes his mind. The humidity maybe?

I suspect that, in this thread, it's more a matter of improper wording of the OP. The OP should have explained that the FATHER left the house to his wife (or that it transferred by function of law/title) upon his death. It should then have gone on to explain that the step-mother's will has certain provisions.

 

[dinahcat]

I suspect that, in this thread, it's more a matter of improper wording of the OP. The OP should have explained that the FATHER left the house to his wife (or that it transferred by function of law/title) upon his death. It should then have gone on to explain that the step-mother's will has certain provisions.

I don't have the will in front of me. From what I know about it, dad left the house and land to my step mom and it's hers to do as she wishes. In their will together they added my step sister to the will and said that upon my step moms death, the property would be sold and split between the three of us. But that's after she died. However the will is written in legal speak, the bottom line is, my step mom owns the property and can do anything she wanted with it. If she wrote a new will it would cancel out the old one, dad wanted it that way and they had a decent lawyer to help them with all of this.

We don't care if she sells it to her daughter all that much. But she is in chapter 13 and I thought she'd need permission to take on new debt, even though there was no money lent to her, she's in some agreement to pay it. We just want to get our money in a lump sum now, or either get monthly payments during the time she's paying this off. As it is, we have to wait until she pays it all off before the trustee will release the funds. I do know that if she stops paying for so many months, the trustee cancels the trust, and she gets her money back and the property gets sold and split.

 

[Zigner]

We just want to get our money in a lump sum now...

Great! This is easy then...there is no "our" money. The house (and any associated income, etc.) is the property of your STEPMOTHER. Stop salivating...

 

[dinahcat]

Great! This is easy then...there is no "our" money. The house (and any associated income, etc.) is the property of your STEPMOTHER. Stop salivating...

LOL I'm salivating. I just want my inheritance. But the other question is, my step sister is converting her chapter 13 to a chapter 7 since she quit her job to go back to school. So, how can her chapter 7 affect this? Will they take the house from her since she has some equity in it since the repayment "plan" if you call it that, only accounted for two thirds of the worth of the home. Right now, for as long as she makes the payments she and my step mother agreed upon, the deed is in her name. She just can't sell it, per the agreement, until after my step mother has passed away and only if my brother and myself have been paid off or will be paid off by the sale.

 

[FlyingRon]

LOL I'm salivating. I just want my inheritance.

You have no inheritance. The moment the property was deeded to your step mother is ceased being part of your father's estate. Unless you stepmom choses to put you in your will there is nothing you're going to inherit.
If your father wanted you to receive any part of the house or proceeds thereof, he did it wrong.

But the other question is, my step sister is converting her chapter 13 to a chapter 7 since she quit her job to go back to school. So, how can her chapter 7 affect this?
Will they take the house from her since she has some equity in it since the repayment "plan" if you call it that, only accounted for two thirds of the worth of the home. Right now, for as long as she makes the payments she and my step mother agreed upon, the deed is in her name. She just can't sell it, per the agreement, until after my step mother has passed away and only if my brother and myself have been paid off or will be paid off by the sale.

The agreement between your stepmother and stepdaughter is not your concern. Absent actually seeing things, it's probably a contract for deed, but they way you describe it (which probably is wrong seeing how you are NOT a party) doesn't fit with that 100%. If the stepsister goes into bankruptcy, the mother is a (most likely) a secured creditor. She has the right to foreclose (or whatever remedy the actual contract provides for) and get the house back. Of course, this has NO BEARING ON YOU. The house still is stepmoms and it won't EVER transfer to you unless she gives it to you or wills it to you.