Anyone have advice on Life Estates?

[Home'scool]

Right now I live in an in-law apartment connected to my sister and brother-in-law's house. I have lived there for about 10 years now.

My concern is if my sister passes away before me. My brother-in-law is a really great guy, but I need some type of protection. I have learned that situations and people change ....

What should I be looking for? Right now I pay half the bills, including the mortgage, and also paid to put in a new septic system. I have also paid for some cosmetic things like a new deck and a gazebo (both were things I wanted to make the back yard a nice stay-cation spot).

My sister and brother-in-law have lived in this modest house for 30 years. My BIL has worked two jobs for the last 30 years to pay the bills.

When I moved in I had nothing but a disastrous marriage and divorce behind me. They took me in with no qualms and no expectations about paying my share, etc. It was just "you are family and have a place here" so I want to be very respectful to my BIL regarding how hard he has worked for this house and how gracious he was to take me in.

Any advice as to what I should be asking for? 

Thank you in advance! 🙂

 

 

[Corraleno]

It sounds like you're thinking you should have some right to remain in the house for the rest of your life (or at least as long as you want), even if your sister passes before you, because of the contributions you've made? And/or do you feel you have a right to part of the equity if your BIL were to sell the house that he has owned and worked two jobs to pay for, for the last 30 years?

I would just be really grateful that they took you in and would consider the payments you've been making to be equivalent to rent. I think if you try to demand some kind of legal "protection" that gives you the right to live there forever and/or to get part of the equity, you are likely to cause hard feelings and may find that you're asked to leave sooner than expected.

[Home'scool]

It is not so much what I feel like is my right, it is the fact that I don't want to be in my 70's or 80's and have to move without anything. 

I am extremely grateful that they took me in. I do consider the payments and contributions I made as part of my responsibility for living there. 

 

 

[Carol in Cal.]

What if you offered to buy the house from them with them having a life interest in staying there?  

[Wishes]

You could just tell them what you’ve said here. That you think about the future and feel fearful about what might happen if one or both of them dies. They might have already discussed this between themselves. They sound compassionate and they know the loss and trauma you have experienced. It is natural to wonder about your future and not want to have your life upended again.

[bolt.]

I think you might be better served by using the time between now and your mid-70s to try to get a plan in place for your senior years and needs.

As a resident of that property, you probably already have some protection against eviction -- even though you are co-living with your landlords, not renting a separate space (which changes things in some areas). I'd start there, find out your existing rights, and see if that feels sufficient.

Do you and your 'landlords' have a lease agreement? If not, it's a good idea to catch up on that paperwork, and include some provisions for what happens if one or both of them dies (and their heir(s) become your landlords) or if they (at any point) want you to leave (because people do change, especially if one or more of you begin to experience dementia). Or even if you owe them anything, and what is fair notice, if you want to leave (they may be dependent on the rental income).

Do they have a will? Almost definitely if only one of them passes, the other will inherit the house -- but who are their heirs if both pass? Has any provision been made for a transitional time for you? Are you a potential inheritor? It's okay to ask to understand their plans, as long as it's clear that you are not asking *for* anything.

Since you are living well right now, and paying "half" living expenses: Do you have enough to set aside for retirement savings and medical costs? Do you have insurance for when you may eventually need nursing care? Do you have a plan for assisted living or other types of housing that elderly folks usually need in their final years? I don't know how that works where you live (I'm Canadian) but it's a good thing to begin to understand and plan for as early as possible.

It's highly likely that you will need to move somewhere, for some reason, at some point, around your 80s. So that's the scenario I would plan for -- whether through savings or insurance. Even if the house remains available to you through those years, it's not very likely that living on your own is going to be feasible right up to the end. Planning for a "move-out-when-you-need-care" scenario will cover you for a "move-out-because-the-house-is-gone" scenario too.

Edited March 21 by bolt.

[Catwoman]

2 hours ago, Home'scool said:

Right now I live in an in-law apartment connected to my sister and brother-in-law's house. I have lived there for about 10 years now.

My concern is if my sister passes away before me. My brother-in-law is a really great guy, but I need some type of protection. I have learned that situations and people change ....

What should I be looking for? Right now I pay half the bills, including the mortgage, and also paid to put in a new septic system. I have also paid for some cosmetic things like a new deck and a gazebo (both were things I wanted to make the back yard a nice stay-cation spot).

My sister and brother-in-law have lived in this modest house for 30 years. My BIL has worked two jobs for the last 30 years to pay the bills.

When I moved in I had nothing but a disastrous marriage and divorce behind me. They took me in with no qualms and no expectations about paying my share, etc. It was just "you are family and have a place here" so I want to be very respectful to my BIL regarding how hard he has worked for this house and how gracious he was to take me in.

Any advice as to what I should be asking for? 

Thank you in advance! 🙂

 

 

I'm not sure how to phrase this nicely, but you're coming across very entitled here. I know you're just worried about your future and that is very sensible, but I can't imagine why your sister and BIL would ever offer you a life right to live in their home, because they may want (or need) to sell it some day.

The fact is, it's not your house and asking for a life right to live in your sister and BIL's house seems very presumptuous. Close relative or not, you're still basically just a tenant in their home. It sounds like they have been incredibly kind to you, but asking for something like this seems almost like a slap in the face to them.

I'm sorry if I sound mean. I don't intend to! But I think your sister and BIL might be very offended if you were to make a request like that. Honestly, it would be a very poor decision for them to give you a life right, as it would seriously limit what they could do with their own property in the years to come -- and if you ever had a falling-out with them, they wouldn't be able to evict you.

Honestly, I think you should be grateful for what you have, and try to keep putting money aside in the event that you may eventually have to relocate. 

 

[Laura Corin]

I would look at moving out so that you can start living independently. If they ask why, you can express gratitude but explain that you need to set yourself up for your old age. Better to make the move now.

[Home'scool]

Okay I guess a little more context is needed.

I have spoken to my sister about this already. The plan is that she is going to leave my BIL soon and that she and I will live out our lives together.  Their marriage has not been working for years now. Please do not judge on that it is a very involved story. He will probably move into his father's house that was left to him.

I made up my will so that if I die before my sister she will get my 401K and savings. That is so she can feel safe if I am not there to contribute to expenses etc. 

I am asking for a reciprocal agreement so that I can feel safe if SHE is not there to help with expenses. 

I told her I would like some type of Living Will or something like that and she agreed. I just didn't know what type of things I should be asking for.

So, I guess I am asking a general questions: assuming all parties are on board, what type of agreement should I be asking for.

 

[KSera]

The extra context seems to make the arrangement idea make less sense, unfortunately. IANAL, but if your sister is leaving him, I can't see any reason you would be able to stay in their previously shared house if she were to pass.  Can you and your sister find a place to live that each of you could afford if you needed to be solely responsible for it at some point in the future?

[Catwoman]

11 minutes ago, Home'scool said:

Okay I guess a little more context is needed.

I have spoken to my sister about this already. The plan is that she is going to leave my BIL soon and that she and I will live out our lives together.  Their marriage has not been working for years now. Please do not judge on that it is a very involved story. He will probably move into his father's house that was left to him.

I made up my will so that if I die before my sister she will get my 401K and savings. That is so she can feel safe if I am not there to contribute to expenses etc. 

I am asking for a reciprocal agreement so that I can feel safe if SHE is not there to help with expenses. 

I told her I would like some type of Living Will or something like that and she agreed. I just didn't know what type of things I should be asking for.

So, I guess I am asking a general questions: assuming all parties are on board, what type of agreement should I be asking for.

 

OK, your story has completely changed.

In your original post, you said your BIL was a great guy, so I think most of us just naturally assumed that he and your sister were happily married. 

You mentioned nothing about a divorce, and made it sound like you were talking about something maybe, possibly, happening many years in the future, and what would happen if your sister was to pass away before your BIL.

I’m totally confused now.

[Annie G]

Do you think he’s going to be willing to walk away from a house that is half his?  I would probably plan to find a way for you and your sister to buy out his interest in the house, and then you can deed it in a way that when one of you passes the other automatically owns the house. Is that joint tenants with rights of survivorship, perhaps? 
 

[Home'scool]

Sorry for any confusion. BIL is a great guy, just not for my sister.

I was just looking for general advice. 

Thank you for all your responses.

[Catwoman]

17 minutes ago, Annie G said:

Do you think he’s going to be willing to walk away from a house that is half his?  I would probably plan to find a way for you and your sister to buy out his interest in the house, and then you can deed it in a way that when one of you passes the other automatically owns the house. Is that joint tenants with rights of survivorship, perhaps? 
 

Yes, that’s why the new information makes no sense to me.

If the BIL has had to work two jobs for the past 30 years to pay for their modest home, it’s not like he’s going to just hand the house over to his wife if she divorces him. And if he has had to work two jobs just to pay the bills, I can’t imagine that there would be enough money available for home’scool’s sister to even be able to consider buying him out.

 

 

[freesia]

I am confused, too. The house would probably be split in the divorce. Your best hope would be to buy him out and share with your sister with your name on the papers. 

[Faith-manor]

49 minutes ago, Home'scool said:

Sorry for any confusion. BIL is a great guy, just not for my sister.

I was just looking for general advice. 

Thank you for all your responses.

Gently, many a great guy has turned into a wicked opponent when faced with divorce and division of assets. I have seen this so very often, and same for women too. It isn't just a guy thing. So my first piece of advice is that you need to plan on not being in this house. Chances are, if he has been working two jobs to make ends meet, he is going to fight for it or he is going to want 50% of the equity which your sister will have to cobble together by cashing out savings or getting a mortgage in her name. If that isn't an option, it is going to end up sold with the two of them splitting the proceeds.

2nd. If your sister has children, then by moral responsibility and by law, those kids need to be considered first not you, when it cokes to making up wills and distributing estates. I would caution you not to ask her to bypass her children in favor of leaving money to you so you can be independent.

It would be better for each of you to work toward financial independence without each other, but then if you still want to live together and enjoy each other's companionship, it is on the basis of mutual affection and not financial need. Make a budget, decide how much each of you will contribute, and then work towards that. Probably that budget should be for a home that is not the current one for the reasons named above.

 

[Catwoman]

44 minutes ago, freesia said:

I am confused, too. The house would probably be split in the divorce. Your best hope would be to buy him out and share with your sister with your name on the papers. 

Yes, exactly! The obvious solution here is for the OP and her sister to pool their resources and buy out the BIL, or to let him buy out the OP's sister and then the OP and her sister can buy a new home together. At that point, both names would be on the deed and the house couldn't be sold without the OP's consent. 

In light of the OP's contradictory update to her original post, I'm still not sure why the life right thing was ever even an issue here, because the OP already knows her sister is planning to divorce the BIL, so she must certainly realize that the house may very well have to be sold, and all of their living situations would be changing very soon, anyway.

I'm still puzzled. Oh well. Nothing new there! 😉 

[Bootsie]

If your sister is still married; she is limited in the choices and commitments that she can make to you.  Atlhough she may be planning to divorce, she is still in a legal partnerhsip with her husband at this time.  Depending upon the state they are in, she may not be able to do things such as assign retirement benefits to you in case of her death.  Before you can really move forward with making plans and commitments regarding mutual support, she needs to end her marriage partnership to have a clear understanding about her financial position going forward.  

[Corraleno]

4 hours ago, Home'scool said:

Okay I guess a little more context is needed.

I have spoken to my sister about this already. The plan is that she is going to leave my BIL soon and that she and I will live out our lives together.  Their marriage has not been working for years now. Please do not judge on that it is a very involved story. He will probably move into his father's house that was left to him.

I made up my will so that if I die before my sister she will get my 401K and savings. That is so she can feel safe if I am not there to contribute to expenses etc. 

I am asking for a reciprocal agreement so that I can feel safe if SHE is not there to help with expenses. 

I told her I would like some type of Living Will or something like that and she agreed. I just didn't know what type of things I should be asking for.

So, I guess I am asking a general questions: assuming all parties are on board, what type of agreement should I be asking for.

 

You really can't decide what form this will take, let alone set it up, until your sister's divorce is final and their property is settled. If your sister is counting on her soon-to-be-ex moving into his father's house (which, if it was an inheritance, may be his sole property, not joint property) and just "giving" her his half of the equity in a house he spent 30 years working two jobs to pay for, she may be in for a big surprise.

And if he does agree to do that for some reason, then the house needs to be retitled either in her name, with you having right of lifetime occupancy and the remainder being distributed according to her will after your death, or some other arrangement (e.g. joint owners with right of survivorship, or titled to family trust with both of you as joint trustees, with specific provisions about distributions after your deaths, etc.). 

You'll need to talk to a lawyer for that anyway, so I'd wait until the divorce is final, all joint property is settled, and then sort out how you and your sister plan to own and manage your living arrangements, as well as whose kids will eventually inherit any remainder.

[Scarlett]

I don’t see how you can get anything settled until after their divorce and division of property. 

[TechWife]

16 hours ago, Catwoman said:

…The obvious solution here is for the OP and her sister to pool their resources and buy out the BIL, or to let him buy out the OP's sister and then the OP and her sister can buy a new home together. At that point, both names would be on the deed and the house couldn't be sold without the OP's consent. 

…

I totally agree with this. There is more than one issue at play, with their property division in the divorce the primary issue that needs to be, and will be, resolved as part of the divorce settlement. This doesn’t involve you because realistically, you are a roommate or a renter with no equity in the house. While their divorce settlement talks are ongoing, you & your sister can discuss different ideas for future living arrangements. You could live as roommates in a rental property, you could rent from her as the owner of a house, she could rent from you as the owner of a house, or you could go your separate ways, housing wise. Another alternative would be for you to enter into one of those same arrangements with your soon to be ex-bil or even with another person entirely. The only way your living arrangement would be secure long term would be for you have legal ownership and build equity. Even then you will run into physical limitations as you age. 
 

ETA: The only scenarios I foresee you not moving are:

Your sister’s name is currently the only one on the deed to the house and the mortgage (or the house is mortgage free)

She has the funds to buy out his share of the house and can qualify for the mortgage (or the house is mortgage free)

She gets 100% of the equity in the settlement and she can qualify for the mortgage (or the house is mortgage free). 

Edited March 22 by TechWife

[Lecka]

My Dad and step-Mom had a very complicated estate plan and it turned out it didn’t fit how things ended up going.  It created headaches for my sister who was the executor and who helped my Dad move into assisted living and memory care.

 

Everything was set up to allow either person to remain in the home with home health, and then sell some items and make sure those items would go to the intended heir (aka my step-sister if it was her family heirlooms).  
 

Everything was set up assuming, basically, that most likely my step-Mom would outlive my Dad, and remain in the home with home health.  
 

It ended up with my step-sister upset anyways, because she had to wait years for some things and I think she should have had them, but it’s not how the estate plan was set up.  
 

My sister had to keep items in a special storage unit while my dad was in assisted living and memory care for years, because it was assumed the items would be staying in the house as long as her was alive and he would be in the house.  
 

So I think it’s very hard to plan long-term because so many things can change.  I think it’s still good to plan but just knowing it’s impossible to know if someone will be better off in a different situation.  
 

I also think there has been no mention of anyone’s heirs and I think people have very strong beliefs about what should go to an heir, and it has really surprised me and I have not always thought things made sense to “me” but it obviously makes sense to the person making the decisions.  
 

So I would say, if anyone involved has children they might honestly want their share to go to a child and not be tied up for years or make a decision because they think it’s better for the heirs in other ways that make sense to them.  
 

If it hasn’t been talked about I would really think to bring it up because people can turn out to have “of course I will do x because of my grandchildren” and things like that.  

[Melissa in Australia]

Personally I would find having a brother or sister in-law living  extended years in my house a terrible strain on my relationship .

[Melissa in Australia]

5 hours ago, Lecka said:

My Dad and step-Mom had a very complicated estate plan and it turned out it didn’t fit how things ended up going.  It created headaches for my sister who was the executor and who helped my Dad move into assisted living and memory care.

 

Everything was set up to allow either person to remain in the home with home health, and then sell some items and make sure those items would go to the intended heir (aka my step-sister if it was her family heirlooms).  
 

Everything was set up assuming, basically, that most likely my step-Mom would outlive my Dad, and remain in the home with home health.  
 

It ended up with my step-sister upset anyways, because she had to wait years for some things and I think she should have had them, but it’s not how the estate plan was set up.  
 

My sister had to keep items in a special storage unit while my dad was in assisted living and memory care for years, because it was assumed the items would be staying in the house as long as her was alive and he would be in the house.  
 

So I think it’s very hard to plan long-term because so many things can change.  I think it’s still good to plan but just knowing it’s impossible to know if someone will be better off in a different situation.  
 

I also think there has been no mention of anyone’s heirs and I think people have very strong beliefs about what should go to an heir, and it has really surprised me and I have not always thought things made sense to “me” but it obviously makes sense to the person making the decisions.  
 

So I would say, if anyone involved has children they might honestly want their share to go to a child and not be tied up for years or make a decision because they think it’s better for the heirs in other ways that make sense to them.  
 

If it hasn’t been talked about I would really think to bring it up because people can turn out to have “of course I will do x because of my grandchildren” and things like that.  

My grandmother had something like this.  It is a mess. In her later years she remarried. Someone  well over 30 years younger than her. She had in her will that he can live in her house for the rest of his life. After he dies then the house is to be sold and divided between her 4 children. As he is younger than her children it is most likely they will pass before him. And nobody knows if he is keeping up house maintenance or even paying rates. 

[Home'scool]

On 3/22/2024 at 4:21 PM, Melissa in Australia said:

Personally I would find having a brother or sister in-law living  extended years in my house a terrible strain on my relationship .

Wow. Being the one who has lived with my sister and brother-in-law for the last 9 years or so, this is very hurtful.

I know you don't know our situation, so you don't know how and why it actually does work for us.

But I am always aware that I landed there as a charity case. And sometimes at 3:00am I am kept awake by thoughts of that and how things could've or should've been in my life. That at almost 55 years old my life was so shredded that I had no where to go and was taken in by the kindness of my family.

Your comment will be one that will pop up on some of my bad days. Maybe think next time you throw out a blanket statement.

[bolt.]

26 minutes ago, Home'scool said:

Wow. Being the one who has lived with my sister and brother-in-law for the last 9 years or so, this is very hurtful.

I know you don't know our situation, so you don't know how and why it actually does work for us.

But I am always aware that I landed there as a charity case. And sometimes at 3:00am I am kept awake by thoughts of that and how things could've or should've been in my life. That at almost 55 years old my life was so shredded that I had no where to go and was taken in by the kindness of my family.

Your comment will be one that will pop up on some of my bad days. Maybe think next time you throw out a blanket statement.

If it helps, blanket statements usually have their roots in the experiences of the person who sets them out. If Melissa's thoughts come plaguing you in some future days, try to remember that they are thoughts that Melissa has about her own experiences with the family that she actually has, and the families that she knows. She isn't qualified to have thoughts like that about your family members because she doesn't know them, and hasn't experienced how your family works.

[Melissa in Australia]

I did say personally right at the start. It wasn't a blanket statement at all.

[Scarlett]

8 hours ago, Home'scool said:

Wow. Being the one who has lived with my sister and brother-in-law for the last 9 years or so, this is very hurtful.

I know you don't know our situation, so you don't know how and why it actually does work for us.

But I am always aware that I landed there as a charity case. And sometimes at 3:00am I am kept awake by thoughts of that and how things could've or should've been in my life. That at almost 55 years old my life was so shredded that I had no where to go and was taken in by the kindness of my family.

Your comment will be one that will pop up on some of my bad days. Maybe think next time you throw out a blanket statement.

 

7 hours ago, bolt. said:

If it helps, blanket statements usually have their roots in the experiences of the person who sets them out. If Melissa's thoughts come plaguing you in some future days, try to remember that they are thoughts that Melissa has about her own experiences with the family that she actually has, and the families that she knows. She isn't qualified to have thoughts like that about your family members because she doesn't know them, and hasn't experienced how your family works.

Agree, which begs the question, why did it need to be said at all.  I well remember the entire story and how difficult it was for @Home'scool

[Scarlett]

On 3/22/2024 at 3:29 PM, Melissa in Australia said:

My grandmother had something like this.  It is a mess. In her later years she remarried. Someone  well over 30 years younger than her. She had in her will that he can live in her house for the rest of his life. After he dies then the house is to be sold and divided between her 4 children. As he is younger than her children it is most likely they will pass before him. And nobody knows if he is keeping up house maintenance or even paying rates. 

And yet it was your grandmother's house to do with what she wanted.   

[Melissa in Australia]

That my uncle's bought her when she divorced my grandfather . 

[Scarlett]

Just now, Melissa in Australia said:

That my uncle's bought her when she divorced my grandfather . 

Key phrase 'bought her.'

[Melissa in Australia]

51 minutes ago, Scarlett said:

Key phrase 'bought her.'

Believe me. There is way more to it than that. And it isn't any of your business. Tho only reason I posted about it was because the original poster asked if anyone had experience or knew anything about getting some sort of lifelong living condition on an estate. Yes I do, hence my post about it.

If you find me such a discusting person why don't you put me on block

Edited March 25 by Melissa in Australia

[Scarlett]

@Home'scool I feel bad that some have jumped to the worst conclusion  about you and your life and or expectations. 
 

I hope you can get something figured out soon. You have been through a lot. 

[Scarlett]

1 hour ago, Melissa in Australia said:

Believe me. There is way more to it than that. And it isn't any of your business. Tho only reason I posted about it was because the original poster asked if anyone had experience or knew anything about getting some sort of lifelong living condition on an estate. Yes I do, hence my post about it.

If you find me such a discusting person why don't you put me on block

There is also a lot more to the OP’s story than she could put in a few posts. 

And why are you telling me that something is not my business that you posted on a public board? Very strange.   I was only responding to the facts you posted. 

[Rosie_0801]

Let's keep to the OP's original question, please.

[Home'scool]

Thank you Scarlett for your kind words. 

I was just looking to see if anyone had experience with Living Wills. Not someone's opinion on what would strain a marriage.

It didn't need to be said. 

[QueenCat]

2 hours ago, Home'scool said:

Thank you Scarlett for your kind words. 

I was just looking to see if anyone had experience with Living Wills. Not someone's opinion on what would strain a marriage.

It didn't need to be said. 

A living will? That's for giving someone permission to make decisions for you when you are at or near the end of your life & cannot speak for yourself.

[Corraleno]

3 hours ago, Home'scool said:

I was just looking to see if anyone had experience with Living Wills.

I have both types of documents that are often colloquially referred to as "living wills": (1) a document that allows one of my kids to make decisions for me if I am incapacitated, and (2) a revocable trust that includes assets that will pass to my children without probate if I die.

One of the assets in that trust is a house that my father and (recently deceased) stepmother have lived in for the last 20 years, which was originally jointly owned with my ex-husband. My #1 concern in the divorce settlement was ensuring that I got that house in my name only so my ex could not kick my parents out if something happened to me. I offered my ex a larger percentage of the equity in our family home in return for ownership of the house my parents live in. That house is now titled in the name of the revocable trust, of which I am trustee, and if anything happens to me then my kids will inherit it and there is a specific clause that gives my father and stepmother a lifetime right to live there, which of course my kids would abide by.

That is why I posted that your sister needs to sort out her divorce settlement first. You can't make any decisions about what "rights" you will have to continue living in the house until you know what rights she will have to the house, and the "cleaner" the divorce settlement is, the better — ideally one spouse will buy the other out (either with cash or with concessions in other areas), or the house will be sold and the proceeds distributed equitably. Then you and your sister can set up an arrangement that suits the two of you, instead of trying to shoehorn yourself and your "rights" into the middle of someone else's divorce proceedings.

Edited March 26 by Corraleno