My father passed over 6 years ago and left my mother the house paid in full. She also allowed her life insurance policy to cancell, so she is without life insurance. Should the house be put in the four children name to take care of her burial or l...
This is extremely complicated and needs the attention of an attorney who has access to all of the information needed to provide a recommendation which satisfies the needs of the mother and the children.
The first and foremost issue is the ability of the children to sell the property once it is deeded from the parent. Most older folks have heard the horror stories of their property being sold and their being evicted. In order to put the parent at ease, I always either make the deed subject to a life estate with the parent(s). Alternatively, I have all parties sign a Use and Occupancy Agreement which is not a part of the title record but which can be recorded to prevent a sale of the property if the parent(s) become afraid that such a sale is imminent.
In my experience, the biggest problem in placing property in the name of children is that they often disagree over the management of the property. If the property is simply put into their names, it is typically held as tenants-in-common or in a trust. Tenants-in-common is a sort of anarchy whereby nobody is in charge and, to make matters worse, any of the children can file a petition for partition of the property to force a sale of the property. The trust often works no better as the trustee is sort of a dictator who, in many states, can be removed only for very bad conduct. In any case, the process of going to court against a brother or sister who is the trustee is very distasteful and results in siblings never speaking to each other again for the rest of their lives - and the poison often continues down to the next generation of first cousins. Also, I always include an ability for siblings to buy each other out as often there is one who wants out and another who does not mind having a larger interest.
I recommend that property held by children for the parents be held in a business entity which provides for a democratic process by which decisions are made and by which a manager is chosen and can be removed. The structure I usually use is the Family Limited Partnership, but the best structure may differ depending on the state involved.
If there are only one or two children, the simple deed with a life estate/Occupancy Agreement will work fine. However, with four, unless the family dynamics are unusually functional, a form providing for a democratic structure may make more sense.See question
I purchased a house for my parents that they will live in till they pass. The house is currently deeded in mine and my wifes name. In order for them to get a better property tax rate I have to list them on the deed as having a lease for life. Doe...
For estate tax purposes, the lease for life brings the property back into your parents' estate. This can be advantageous as it then means the cost basis of the property is stepped up to the date of death value, thus potentially saving capital gains taxes to whoever inherits the property.See question
What is a medicaid trust?
A Medicaid trust is a trust designed to prevent the assets placed in the trust from being counted as available and thus required to be spent down at such time as the person establishing the trust (settlor) applies for Medicaid benefits, typically for long term nursing home care. The trust may provide that all income is distributed to the settlor. However, the trust cannot provide for payment of principal to the settlor, even at the discretion of the trustee, as the amount of principal allowed to be distributed will be considered a countable asset. The trust must be in writing and must be in compliance with the rules of the state in which the trust is established. The "look-back" period requires that the trust be in existence for a five year period of time before the settlor applies for Medicaid in order to avoid a "penalty period". The trust may or may not be taxed as a part of the settlor's personal tax returns, depending on how the trust is drafted.
Most of the rules providing general guidelines as to how the trust can be drafted are provided by federal laws, including the IRS Code. However, the federal rules for Medicaid purposes are mostly carried out through state statutes and regulations. Therefore, it is important that the Medicaid trust be drafted by an attorney who is licensed to practice in the state of the settlor.See question
The details are too long for telling in this space but here are the essential facts: 1. Power of Attorney was authorized to draft one check a month in the amount of $750 while I was deployed with the military to Iraq last year. This amount was...
In most states, a person acting as agent under a power of attorney has an absolute responsibility to act as authorized, to perform acts requested as a part of the agency and not to act in any manner which exceeds the specific authorized agency. It is also common for POAs to have a clause relieving agents of liability when acting. Fortunately, it appears no such clause exists in the POA used in this case.
It appears Killeen has a viable case against the agent for not acting where specifically instructed to do so and for exceeding the authority granted. As the burden of proving a civil case normally is the "preponderance of the evidence" rather than the heavier burden of "beyond a reasonable doubt" for criminal cases, it would appear best to pursue the matter in civil court. This is especially the case as some of the acts are clearly not criminal and it would be more efficient to have all acts pursued in the same action.
The action would be controlled by local law, which means the law of the State of Texas. Therefore, it would be advisable to consult with an attorney licensed in Texas to pursue the matter. It also would make sense to consult with a JAG officer as the POA was provided on what appears to be a JAG drafted form.See question