will & home ownership

[slangdo]

Hello-

My mother-in-law's will leaves "everything" to my wife & wife's sister, MIL's only 2 children.

Sister-in-law has, for most of her life, lived with my wife's mother, in a home owned by the mother.

My MIL has now said that she's adding my wife's sister to her home as a "co-owner", whatever that means, so that 1) the sister-in-law can enjoy some tax benefits, presumably by paying the real estate taxes on the property, and 2) the value of the property will somehow be protected should MIL need to go into a nursing home. MIL says she asked the lawyer that prepared her will, and this doesn't affect my wife's eventual share of her mother's estate, the property will still be divided evenly between the 2 daughters.

Does this make sense? I'd assume that if my wife's sister "co-owns" the home with the mother, that when the mother passes on, the property will belong 100% to the sister.

Or is there a way that her current will would take precedence over adding the sister as a co-owner, and the mother's estate, including the full value of the home, would still be divided evenly between both daughters?

I don't believe my MIL is intentionally doing anything to favor my wife's sister, but I'm concerned that the sister may have concocted this scheme, and that my MIL may not understand the implications or consequences of it.

Everyone concerned lives in New Jersey, the property is in NJ, daughters are both in their 50's, mother is 85, if that makes any difference.

Thanks very much for any comments, advice, etc.

Steve.

 

[loku]

You have good cause for concern here. Your mother in law’s will only determines what happens to property that she owns at death.

If the house is put in joint tenancy with the right of survivorship, then the entire house will automatically belong to your sister in law when your mother in law dies. The will would operate on the remainder of her property but it will have no effect on the house in that case.

If the property is put into a tenancy in common, then your sister in law will own ½ of the house and your mother in law will also own ½. When your mother in law dies, her will would determine what happens to her half of the house. So if the will leaves half of her property to your wife and half to your sister in law, then the sister in law would keep her half and would get half of your mother in law’s half. The end result would be that your sister in law would end up with ¾ of the house and your wife with the other ¼.

What she could do is put the house into tenancy in common with your sister in law, then leave her entire half of the house to your wife. That way, the two sisters would each end up with half the house.

 

[slangdo]

Thank you very much for your reply. Your explanation is pretty much what my layman's brain had assumed...

Since my post, my mother-in-law has further told my wife that she has actually already made this change, approximately 2 months ago. She continues to assure my wife that whatever she did, her lawyer stated that it would in no way affect both of her daughters' equal eventual inheritances. (?) (Her only significant asset is her home, by the way.) As my mother-in-law is not one to share legal details, paperwork, etc., with family members, the specifics of this whole matter will remain a mystery until her passing.

For our part, my intent now is to help my wife put this issue into the backgorund & move on. She has suffered long with depression & anxiety disorder, under a psychiatrist's care for may years. Many of her problems relate to her family relationships, especially those concerning her freeloading sister. For her to continue to fret over & pursue this matter now would only prolong her anguish, and possibly worsen her condition, which is too big a price to pay for an eventual inheritance which, although sizeable, would not significantly change our lives.

If my mother-in-law at some point wants to voluntarily move to an assisted living facility, and now will not have the assets to pay for it, is another concern that we have. But that will be another story.....

Thank you again for your reply,

Steve.

 

[loku]

One thing I suggest you do is to WRITE your sister in law and ask her to give her lawyer permission to assure your wife that the transfer of title will in no way affect the inheritance. If she gives you the permission, write the lawyer and ask the question. What I think you should try and end up with is a written statement from the lawyer. Then if you do not get half of the house, you have a cause of action against the lawyer. If your sister in law or the lawyer will not go along with this, I think you have grounds to suspect something is wrong.

I don’t think you can separate the two problems: if the nursing home ends up with title to the house, neither sister ends up with anything. If your mother in law goes into the nursing home within a few years, the transfer of title could be reversed by the court in favor of the nursing home. If she stays out of a nursing home long enough, the transfer will be honored, but her half of the property would be subject to sale for the benefit of the nursing home. See https://law.freeadvice.com/estate_planning/elder_law/costs_nursing_home.htm for our discussion of one aspect of this.

 

[slangdo]

Thank you once again, loku. Upon further discussion, my mother-in-law is now realizing that she probably has given her home solely to one daughter upon her passing, which is not what she intended. She now suggests that she have my wife's name added as another "co-owner", and has asked my wife to call the lawyer to make the arrangements.

Now the unknown is how my wife's sister, who will need to agree to add my wife, will react to this. Mother-in-law says she doesn't think she'll object; we'll see. If she objects on the basis that there's no need to change anything, we'll take your advice & ask their permission to contact their lawyer for a written explanation of how this would all play out.

Again, I appreciate the time you've taken to give me some insight as to the legal aspects of this apparent mess.

Steve.

 

[loku]

You are very welcome. I hope you can work this out. Good luck