Yet Another Inherited Real Estate Question

[OHRoadwarrior]

There is nothing wrong with that. The important thing is that your spouse make sure she is aware of all the limitations and thresholds that need to be met, in order to carry out the parents wishes, without violating the law. She needs to keep written records, so if anything is questioned in the future, it can be substantiated. If the amounts are going to be anything significant, a special needs trust will likely need to be formed. There are usually reporting requirements for a special needs trust as it can affect various forms of benefit received.

I'd like to know where the "fraud" is, here. If it had been up to me (after all, I'm only the executor's husband and wasn't present at or part of the drawing up of the will), there would have been a trust established. Nonetheless, according to my understanding, the attorney involved consulted with another attorney specializing in Social Security issues and they determined this was the simplest way to write the will for the benefit of the disabled sister. When we gift her a small amount of money each month, she will retain her food stamps, disability payments and rent controlled apartment. The law says she can receive a certain amount of income each month that will not conflict with her disability payments and status, and our intent is to dole out her inheritance in this manner.

To my mind, a trust as mentioned here is a better plan, but I had no say in the matter. However, since I'm sleeping with the executor, she has been known to listen to my ideas, and we may be able to put something like it into place on our own.

 

[Zigner]

After reading this entire thread, I think my question needs to be answered.

It's entirely possible that the money is the OP's to do with as she pleases. If so, then she may decide to give sis a little bit each month, or she may not. It would be her choice either way.

 

[tranquility]

My, My, My, Stiiiillllll ranting!!! I can tell somebody is stuck on a rainy day with nothing to do. I suggest you review my posts. Nowhere, did I say anyone was committing a crime. I simply asked whether that was the intent. If you have a specific issue, other than tripping over yourself to troll, I suggest you do so or stop hijacking the thread.

Hijacking the thread? Giving useful information is not hijacking, asking silly questions is. Perhaps you can give some useful answer to some poster someday. It would be most refreshing. Oh wait! You did so right here:

There is nothing wrong with that. The important thing is that your spouse make sure she is aware of all the limitations and thresholds that need to be met, in order to carry out the parents wishes, without violating the law. She needs to keep written records, so if anything is questioned in the future, it can be substantiated. If the amounts are going to be anything significant, a special needs trust will likely need to be formed. There are usually reporting requirements for a special needs trust as it can affect various forms of benefit received.

Well done. I'm glad you came around.

 

[TurtleWax]

Does the will direct you to pay a small amount to sis each month?

No, but that was the intent, as my father-in-law told my wife at the time the will was drawn up. Obviously this is something my wife has no legal obligation to do, but the moral obligation is there. I still think it would be better set up in a trust, FWIW.

 

[Zigner]

No, but that was the intent, as my father-in-law told my wife at the time the will was drawn up. Obviously this is something my wife has no legal obligation to do, but the moral obligation is there. I still think it would be better set up in a trust, FWIW.

I wouldn't necessarily agree. As it stands, your wife is free to do as she wishes with her money. If the trust is not set up correctly, it can impact the money that sis is entitled to.

 

[TurtleWax]

After reading this entire thread, I think my question needs to be answered.

It's entirely possible that the money is the OP's to do with as she pleases. If so, then she may decide to give sis a little bit each month, or she may not. It would be her choice either way.

I think you're entirely correct, Zigner...it is her's to do with as she pleases, in the legal sense. I know she has nothing but the best interests of her sister in mind (as do I), but the way it is now, things get murkier if something was to happen to us and our estate passes down to our children while the disabled sister is still alive. They may not see the moral obligation as my wife and I do.

I need to go home tonight and read the will to be sure everything that has been told to me is correct. And the more I read of this thread, the more convinced I am we need to look into a trust for the sister, to put a firm structure to the intents of the deceased. I can see why he wanted to avoid the complications of setting up a trust (it was hard enough getting him to do the will!), but I think his intents are not properly protected as things are now.

 

[TurtleWax]

There is nothing wrong with that. The important thing is that your spouse make sure she is aware of all the limitations and thresholds that need to be met, in order to carry out the parents wishes, without violating the law. She needs to keep written records, so if anything is questioned in the future, it can be substantiated. If the amounts are going to be anything significant, a special needs trust will likely need to be formed. There are usually reporting requirements for a special needs trust as it can affect various forms of benefit received.

Thanks, and I think it at least deserves further exploration.

 

[Ohiogal]

My understanding is the assets of the estate are to be split 25-25-50. (I haven't actually read the will -- yet. I get to do things like ask these questions because I'm more Internet savvy and write better than my wife. She makes the decisions... I merely do as she asks and tell her what I find out.)

You BELIEVE the assets of the estate are to be split 25-25-50. But you need to know for sure. If they are to be divided between three people, it might be with each receiving a third. Until you KNOW how the estate is to be divided EXACTLY, no one can advise you.

 

[TurtleWax]

You BELIEVE the assets of the estate are to be split 25-25-50. But you need to know for sure. If they are to be divided between three people, it might be with each receiving a third. Until you KNOW how the estate is to be divided EXACTLY, no one can advise you.

I tend to believe what my wife and father-in-law, and their attorney, tell me. However, that actually isn't even relevant to the question I originally posted, which had to do with how a real estate property might be handled in this particular situation. And the responses I've gotten so far have been very enlightening, so I'm not complaining!

 

[Ohiogal]

I tend to believe what my wife and father-in-law, and their attorney, tell me. However, that actually isn't even relevant to the question I originally posted, which had to do with how a real estate property might be handled in this particular situation. And the responses I've gotten so far have been very enlightening, so I'm not complaining!

Actually it does have a whole heck of a lot to do with it. If the estate is divided THREE ways then the sisters need paid 66 and 2/3 % of the overall value. Not 75% of the value. Therefore, you may not have been told propertly.

 

[Zigner]

I believe the OP is likely correct in the percentages, as the intention of the decedent, as verbally relayed, is that the 4th child receive her portion in small chunks from the sister that is getting 50%. It makes sense...not legally, but rather, interpersonally.

 

[TurtleWax]

Actually it does have a whole heck of a lot to do with it. If the estate is divided THREE ways then the sisters need paid 66 and 2/3 % of the overall value. Not 75% of the value. Therefore, you may not have been told propertly.

You're right; however, the intent of my original post was more procedural advice. But your point is well taken!

 

[ecmst12]

One good reason to set up a trust is, what if something happens to your wife and/or to you? What if the sister outlives you both? If the trust is set up properly, it will continue to provide for her needs regardless of what's going on with you and your wife. It will also be protected from your/wife's creditors in case of (for example) disastrous medical bills or something like that.

 

[justalayman]

TurtleWax;3174205]It was our thought that the repairs would be done AFTER dispersal of assets...because the value of the house is as of date of death, not as of completion of repairs.

no, the value of the house is the value at the time of division of the assets. You cannot effectively charge the other heirs for the repairs unless they will also benefit from the increased value.

Is it possible for the estate to pay for the necessary repairs, thereby increasing the value of the house before dispersal? I hadn't thought of that.

sure but each share is going to be more valuable which means you pay a higher price to buy out the other's share.

The house is not mentioned specifically in the will, to my knowledge (I haven't read it yet...I just ask questions as my wife, the executor, requests I do). I believe it's the value of the estate as a whole that is to be divided 25-25-50.

ok then. In a perfect situation there would be enough assets so your wife could give the house in its entirety to herself and use other assets to pay the others their share of the estate. If it is less than perfect, wife can still assign all other assets to the others thereby reducing the amount she would have to pay to purchase the other's shares in still remaining in the house.

 

[ecmst12]

If wife wants liquid assets in order to be able to give her sister money each month, then trading other assets for the house may NOT be the best plan, it may be better to divide all the assets as planned and get a mortgage for the house.