Life Estate quit claim question

[melinda F]

Florida
Basically I am an only child have no debt other than payable monthly credit card and mortgage with low interest and equity - basically trust worthy. I live in California and after years of mom refusing to set up revocable living trust for me in Florida to make things easier, she approached me and said she had found the answer an "enhanced life estate" for the house. I said great I still prefer a living trust but thanks... that was 2013. When refinanced my house for lower rate found out I was on the deed and mom and her lawyer (who I never met or instructed in any way) set up a Life Estate not an Enhanced LIfe Estate. She now wants me to do a quit claim so she again has the right to sell the house if she wants, as a regular LIfe Estate was not her intention. She says her reason is if I loose file for bankruptcy she could loose the house and have nowhere to go.. laughable if you knew me.
Normally I would do that but in the interim my dad's Parkinson's has progress and she has shown herself to have lest than his best interests at heart and she wants the house returned to just her name. Also as this was set up in 2013 the medicaid look back period is over and it makes no sense to reset that clock wth an 88 and 84 year old parents. Does it make sense for me to refuse the quit claim as I think it makes more sense for the house to be mine to sell if needed, and I could use fund on extras for them and visiting them, than for it all to go to medicaid eventually.. my mom says she wants it back in case we are ever bankrupt and the house is taken from her ( I think I have taken about 8 lotto tickets in my life and that is as close as I have come to irresponsible).... Should I quit claim? and what right does she have legally to take it back? can she say she did not understand her lawyer? More difficultly morally do you think I should just give it back to her when I think there is far more chance of house assets just going to medicaid than me ever running up debt on the house? Also considering deeding it back to my dad and her if I am given his power of attorney?

 

[Taxing Matters]

I assume that the way it is set up is that your mother or your parents are the life tenants and you hold the remainder interest. If that is true, then should you go bankrupt your mother/parents would not lose the house. The life tenant(s) would still get to live on the property for the remainder of her/their lives. What would happen in the bankruptcy is that you might lose your remainder interest, so that when the life tenant(s) die, the property ends up owned solely by whomever bought your remainder interest from the trustee. In short, your mother's fear is unfounded even if you weren't in good shape financially.

Note that it is possible for even persons good at managing their money to end up bankrupt; unexpected things can happen that can wipe out even those quite well off. So it's not totally crazy for your mother to consider that possibility. But as I say, she doesn't have to worry about getting kicked out should you end up bankrupt.

Whether you wish to deed back your remainder interest is up to you. But if she does the enhanced life estate, there is no guarantee you will end up getting the property. The enhanced life estate allows the life tenant to mortgage or even sell the property without the approval of the remainder persons. That could leave you with nothing should that occur. I suggest you consult a Florida estate planning attorney to fully understand the implications of that.

 

[LdiJ]

Florida
Basically I am an only child have no debt other than payable monthly credit card and mortgage with low interest and equity - basically trust worthy. I live in California and after years of mom refusing to set up revocable living trust for me in Florida to make things easier, she approached me and said she had found the answer an "enhanced life estate" for the house. I said great I still prefer a living trust but thanks... that was 2013. When refinanced my house for lower rate found out I was on the deed and mom and her lawyer (who I never met or instructed in any way) set up a Life Estate not an Enhanced LIfe Estate. She now wants me to do a quit claim so she again has the right to sell the house if she wants, as a regular LIfe Estate was not her intention. She says her reason is if I loose file for bankruptcy she could loose the house and have nowhere to go.. laughable if you knew me.
Normally I would do that but in the interim my dad's Parkinson's has progress and she has shown herself to have lest than his best interests at heart and she wants the house returned to just her name. Also as this was set up in 2013 the medicaid look back period is over and it makes no sense to reset that clock wth an 88 and 84 year old parents. Does it make sense for me to refuse the quit claim as I think it makes more sense for the house to be mine to sell if needed, and I could use fund on extras for them and visiting them, than for it all to go to medicaid eventually.. my mom says she wants it back in case we are ever bankrupt and the house is taken from her ( I think I have taken about 8 lotto tickets in my life and that is as close as I have come to irresponsible).... Should I quit claim? and what right does she have legally to take it back? can she say she did not understand her lawyer? More difficultly morally do you think I should just give it back to her when I think there is far more chance of house assets just going to medicaid than me ever running up debt on the house? Also considering deeding it back to my dad and her if I am given his power of attorney?

To add a few things to what Taxing Matters said, being given your dad's power of attorney will not stop your mom and dad from selling the house or doing any number of things that could be problematic. A power of attorney only allows you to act on the part of the person, not to overrule the person. In addition, if your father is not now competent, he cannot issue a power of attorney.

Also, at 88 and 84 I would have some concern about them being unduely influenced by some outsider to regain control of the property for some nefarious reason {on the part of the outsider), or simply for the gain of the outsider. Someone has caused your mother to be aware of the issues she has brought up to you.

Therefore I would recommend that you reassure your mother that the life estate will be there no matter what happens to your finances, as a matter of law and avoid any more talk of quit claiming the house back to her.

 

[melinda F]

To add a few things to what Taxing Matters said, being given your dad's power of attorney will not stop your mom and dad from selling the house or doing any number of things that could be problematic. A power of attorney only allows you to act on the part of the person, not to overrule the person. In addition, if your father is not now competent, he cannot issue a power of attorney.

Also, at 88 and 84 I would have some concern about them being unduely influenced by some outsider to regain control of the property for some nefarious reason {on the part of the outsider), or simply for the gain of the outsider. Someone has caused your mother to be aware of the issues she has brought up to you.

Therefore I would recommend that you reassure your mother that the life estate will be there no matter what happens to your finances, as a matter of law and avoid any more talk of quit claiming the house back to her.

 

[melinda F]

I want to thank you both for your replies. My mom is going to be really mad if I do not quite claim but being able to reassure her they could never take the house is a big thing. I really appreciate your input and hope she can see especially after completing the look back period it makes no sense. Your answers were really helpful