Wills, and or Deed questions for the Surly attorneys

[Onboard 2.0 9083]

My dad is dying, inoperable pancreatic cancer. He's 82, he's a had a good longish life.  He's married to a second wife, and they have 3 kids, and there's myself, and my brother from his first marriage.

There's a river cottage (in both their names),  I designed it (after tearing down the first shack), we've been going there since the early 70's, it's a place my brother, and I feel a connection with my dad. 

I suggested he leave it to all 5 kids so we can share it as a family compound, like a timeshare. Some of the kids don't want it apparently.  My question is can he add the names of the kids who want to share it on the deed along with he, and his wife ?  Once added could she remove our names from the deed after he passes away ?  My fear is she wants to keep everything for her, and her kids, and cut out my brother, and I. She isn't the nicest person in the world.

 

 

[TwiceHorn 31536]

You kind of have to start with is this going to happen during his life or after his death.

There are tax advantages to doing it via will in that inheritors get "stepped up" basis.  That gets a little squishy if it's a transfer/gift during his lifetime.  If it exceeds 14k per donee, it is subject to gift tax and if the gift is not accounted for and taxed, there may be no basis at all in the gifted property.

Via will, the ones who don't want a share in the property can renounce that portion of the inheritance (probably), so they never "go on the deed" and don't have to be "bought out."

But to answer your question, as long as the deed is changed, wife cannot unilaterally change the ownership to exclude those already on the deed.  Whatever interest she has, by inheritance or deed or will remains hers to pass down however she wishes.

Edited October 23, 2020 by TwiceHorn

[Onboard 2.0 9083]

13 minutes ago, TwiceHorn said:

You kind of have to start with is this going to happen during his life or after his death.

There are tax advantages to doing it via will in that inheritors get "stepped up" basis.  That gets a little squishy if it's a transfer/gift during his lifetime.

Via will, the ones who don't want a share in the property can renounce that portion of the inheritance (probably), so they never "go on the deed" and don't have to be "bought out."

But to answer your question, as long as the deed is changed, wife cannot unilaterally change the ownership to exclude those already on the deed.  Whatever interest she has, by inheritance or deed or will remains hers to pass down however she wishes.

Thanks, amending the deed is what seems to be the easiest way to ensure the brother, and I aren't cut out after our father dies. 

I guess then the question is, could he make a part of his will state  we're to be added to the deed after he dies ? (friggin hate even discussing this, it makes you feel like a money grubbing ghoul), but to do nothing means probably getting screwed.

He's leaving all his money and his ownership of their house, and some other equities to her. That means her kids will inherit those things after she passes on.  They'll probably end up with more which doesn't mean much to me.  I just didn't want to lose a special place because she wants her kids to get it all.

[TwiceHorn 31536]

7 minutes ago, Onboard 2.0 said:

Thanks, amending the deed is what seems to be the easiest way to ensure the brother, and I aren't cut out after our father dies. 

I guess then the question is, could he make a part of his will state  we're to be added to the deed after he dies ? (friggin hate even discussing this, it makes you feel like a money grubbing ghoul), but to do nothing means probably getting screwed.

He's leaving all his money and his ownership of their house, and some other equities to her. That means her kids will inherit those things after she passes on.  They'll probably end up with more which doesn't mean much to me.  I just didn't want to lose a special place because she wants her kids to get it all.

First question, does he have a will?  If so, it is a straightforward matter to leave the property to the kids that want it.  There's a question whether the widow may be able to claim a share of the property (if it were community property in Texas, he could only will 1/2 of it and she'd get the other).

@Brewcould tell you of the tax ramifications of adding the kids to the deed during his lifetime.  He'd also have to be taken off it, or his share would pass according to either the will or intestate succession. If the property transfers by will, it's not a taxable event for anyone.  During lifetime, it has some ramifications.

Now, if he has a will and it says what it's supposed to, it won't have any effect unless it's probated.  Widow or executor is logical person to probate it, but kids can do it, too.  Probate insures that what his will says happens.

Edited October 23, 2020 by TwiceHorn

[woohorn 1131]

Sorry to hear about your dad.

In Texas- he only owns half. His will probably leaves everything to wife.

Better to give it to ALL kids now (fairness). The ones who want it should buy out the others.

[Onboard 2.0 9083]

I'll PM a couple follow ups after the fun filled debate 

[Onboard 2.0 9083]

8 minutes ago, woohorn said:

Sorry to hear about your dad.

In Texas- he only owns half. His will probably leaves everything to wife.

Better to give it to ALL kids now (fairness). The ones who want it should buy out the others.

Thanks, Yeah but her kids will end up with much much more in the long run. They'll get their home, and all the cash my dad leaves her (plus all her own wealth) She'll be leaving a very substantial inheritance to them she'll never spend.

I'd like for all 5 kids to share ownership. As would our dad.

So I'd think he could leave his half of the cottage ownership to us in his will upon his death, and she could leave her half to her kids that would want to share in the cottage ownership.

I know jack about the law obviously.

Edited October 23, 2020 by Onboard 2.0

[TwiceHorn 31536]

7 minutes ago, Onboard 2.0 said:

Thanks, Yeah but her kids will end up with much much more in the long run. They'll get their home, and all the cash my dad leaves her (plus all her own wealth) She'll be leaving a very substantial inheritance to them she'll never spend.

I'd like for all 5 kids to share ownership. As would our dad.

So I'd think he could leave his half of the cottage ownership to us in his will upon his death, and she could leave her half to her kids that would want to share in the cottage ownership.

I know jack about the law obviously.

By deed, he can cut out wife entirely and just deed it to the kids that want it.  So there's that.  There are probably some somewhat unfavorable tax implications to that, that may not be "realized" until some time in the future when the property is disposed of.

I am kind of assuming that this property was acquired before marriage 2, which would limit her ability to claim a widow's share in the will situation.  That's going to depend on the law there.

From a documentation standpoint, it's probably about a wash.  The will is a tad bit more complicated, but insuring he has one and that it's up to date on this and other matters is very worthwhile.

[woohorn 1131]

Sounds like you have the gist. Have him amend his will to leave his 1/2 to HIS kids.

[Brew 3049]

7 minutes ago, Onboard 2.0 said:

Thanks, Yeah but her kids will end up with much much more in the long run. They'll get their home, and all the cash my dad leaves her (plus all her own wealth) She'll be leaving a very substantial inheritance to them she'll never spend.

I'd like for all 5 kids to share ownership. As would our dad.

So I'd think he could leave his half of the cottage ownership to us in his will upon his death, and she could leave her half to her kids that would want to share in the cottage ownership.

I know jack about the law obviously.

Does she have any connection to the property? Would he/she be willing to sign it over to you and your brother with you two agreeing you don’t have any interest in any of the other assets which can go to the other 3 eventually? If not, he can leave his interest to the two of you which at least puts you on the deed and gives you some control. It would be a crap situation going forward.

I’m in a similar situation other than both parents remarried and had kids. I’ve told both of them to just leave me out of their wills. I don’t want the drama of dealing with siblings later on their stuff.

[Brew 3049]

Tax wise, you just lose the step up in basis with the estate and you take over his basis with the gift. It means you’ll have gains when you sell, but it sounds like that’s not something to worry about based on your connection with it. If you sell, deal with it then.

[TwiceHorn 31536]

6 minutes ago, Brew said:

Tax wise, you just lose the step up in basis with the estate and you take over his basis with the gift. It means you’ll have gains when you sell, but it sounds like that’s not something to worry about based on your connection with it. If you sell, deal with it then.

It knocks down the estate tax exemption by the value of the gifts, does it not?  Probably not an issue, but  . . . . 

[Brew 3049]

Just now, TwiceHorn said:

It knocks down the estate tax exemption by the value of the gifts, does it not?  Probably not an issue, but  . . . . 

It lowers the exemption by the value of the gift less the annual gift exclusion. Based on that being $23ish million right now including the marital component, I assumed that probably wasn’t an issue.

[Bernard 879]

First of all, you can’t add names to a deed, or take names off a deed. A deed is just a document that transfers ownership of real estate. It’s not ownership itself  

Sounds like you need a Transfer on Death deed. Your dad can sign (and file with the county clerk) a transfer on death deed now. Upon his death, his share of the property will go to whoever he names on the deed, presumably you and your bother. A transfer on death deed trumps a will, and avoids probate completely. Real estate transferred by a transfer on death deed is not even considered part of the deceased person’s estate.

How much does the 2nd wife own? Half? How did she come the owner her share? Did your dad sign a deed giving her half?

Bernard

[TwiceHorn 31536]

5 hours ago, Bernard said:

First of all, you can’t add names to a deed, or take names off a deed. A deed is just a document that transfers ownership of real estate. It’s not ownership itself  

Sounds like you need a Transfer on Death deed. Your dad can sign (and file with the county clerk) a transfer on death deed now. Upon his death, his share of the property will go to whoever he names on the deed, presumably you and your bother. A transfer on death deed trumps a will, and avoids probate completely. Real estate transferred by a transfer on death deed is not even considered part of the deceased person’s estate.

How much does the 2nd wife own? Half? How did she come the owner her share? Did your dad sign a deed giving her half?

Bernard

This is mostly correct.  Except for estate tax purposes it is considered part of the estate, it's just not administered in probate.

I assume this is Virginia?  Here's a blurb on her right to claim a "widow's share" of estate property.  http://virginiaestatelaw.com/main/chapters/spousal/electiveshare.shtml    In a probate, she has the option of taking what the will gives her, or 1/3 of the "augmented estate," which includes non-probate assets like beneificiary accounts, and "transfer on death" property.

Long story short, you should probably get with an estate attorney to go over Dad's will with Dad and explore the options.

This would be a good move even if this property were not in play.

Edited October 23, 2020 by TwiceHorn

[Onboard 2.0 9083]

They bought it together.  I don't think she's gonna want to just give it to us. Like I said she doesn't want me or my brother getting it outright I believe.  I don' wanna look like I'm trying to take it from her kids, which I'm absolutely not trying to do.

I like the transfer on death deed option right now, if that's an option in VA..  That makes me, and my brother half owners, and then when she dies she can deed it to whoever she wishes. We'd then deal with the property going forward.  My objective is 5 equal shares or equal shares among whoever ends up wanting to keep it hopefully.

[Onboard 2.0 9083]

2 hours ago, TwiceHorn said:

This is mostly correct.  Except for estate tax purposes it is considered part of the estate, it's just not administered in probate.

I assume this is Virginia?  Here's a blurb on her right to claim a "widow's share" of estate property.  http://virginiaestatelaw.com/main/chapters/spousal/electiveshare.shtml    In a probate, she has the option of taking what the will gives her, or 1/3 of the "augmented estate," which includes non-probate assets like beneificiary accounts, and "transfer on death" property.

Long story short, you should probably get with an estate attorney to go over Dad's will with Dad and explore the options.

This would be a good move even if this property were not in play.

Yep, have an attorney creating his will now. Figured advice here is cheaper than his on the clock time so at least when I talk to him I have a potentially clear/realistic path of getting this done equitably.

[TwiceHorn 31536]

3 minutes ago, Onboard 2.0 said:

Yep, have an attorney creating his will now. Figured advice here is cheaper than his on the clock time so at least when I talk to him I have a potentially clear/realistic path of getting this done equitably.

Very good then.  With respect to the property, you have three basic options:

Him deed it to you now

Him deed it to you on death or

Put it in the will.

The last two seem to be pretty interchangeable in effect.  The first may or may not provide some advantages in the nature of keeping it away from Wife 2's grasp, but your Va lawdog will have to advise on that.

[TwiceHorn 31536]

11 minutes ago, Onboard 2.0 said:

They bought it together.  I don't think she's gonna want to just give it to us. Like I said she doesn't want me or my brother getting it outright I believe.  I don' wanna look like I'm trying to take it from her kids, which I'm absolutely not trying to do.

I like the transfer on death deed option right now, if that's an option in VA..  That makes me, and my brother half owners, and then when she dies she can deed it to whoever she wishes. We'd then deal with the property going forward.  My objective is 5 equal shares or equal shares among whoever ends up wanting to keep it hopefully.

Ah, ok.  Well then she's a half owner no matter what.  Can't change that without some attempt to buy her out.  

So it's just an issue of what Dad wants to do with his half.

General bit of advice:  the fewer co-owners there are, the easier it will be to deal with in the future.  For the most part, all of the co-owners have to agree to any kind of sale or even just an ownership change.  A single co-owner can deed his interest back to one or all the co-owners to "get them off the title" without consent of the others.

[Onboard 2.0 9083]

7 minutes ago, TwiceHorn said:

Ah, ok.  Well then she's a half owner no matter what.  Can't change that without some attempt to buy her out.  

So it's just an issue of what Dad wants to do with his half.

General bit of advice:  the fewer co-owners there are, the easier it will be to deal with in the future.  For the most part, all of the co-owners have to agree to any kind of sale or even just an ownership change.  A single co-owner can deed his interest back to one or all the co-owners to "get them off the title" without consent of the others.

Yeah, no issues with her being half owner, just trying to head off her cutting us out, and giving it all to her kids.  My dad doesn't really get that, and you have to be careful calling your step mother a bitch.... which she has been her whole life as far as I can tell.

[TwiceHorn 31536]

And condolences on your Dad.  You're having a rough go.

This too shall pass.

[Onboard 2.0 9083]

16 minutes ago, TwiceHorn said:

Very good then.  With respect to the property, you have three basic options:

Him deed it to you now

Him deed it to you on death or

Put it in the will.

The last two seem to be pretty interchangeable in effect.  The first may or may not provide some advantages in the nature of keeping it away from Wife 2's grasp, but your Va lawdog will have to advise on that.

I'd think if it's deeded to us at his death that would be the easiest thing to do for my dad, especially right now with his health issues ?  He doesn't need to do anything, but have that language inserted in to the will.  I don't want him to have to focus on much of anything but trying to get some (quality) extended time here with us.  

And if he does want to deed it to us now, I'd have to find the physical deed I'd assume, which may be conveniently "lost" right now.

[Onboard 2.0 9083]

1 minute ago, TwiceHorn said:

And condolences on your Dad.  You're having a rough go.

This too shall pass.

It sucks. I hated even saying dad have you set up a will, when you're dealing with such a death sentence issue like his cancer.  It's like "hey dad, by the way what are you leaving me when you kick off ?"

[TwiceHorn 31536]

2 hours ago, Onboard 2.0 said:

I'd think if it's deeded to us at his death that would be the easiest thing to do for my dad, especially right now with his health issues ?  He doesn't need to do anything, but have that language inserted in to the will.  I don't want him to have to focus on much of anything but trying to get some (quality) extended time here with us.  

And if he does want to deed it to us now, I'd have to find the physical deed I'd assume, which may be conveniently "lost" right now.

Well, if you already have someone working up a will, it's about 30 words or so to do what you want.

A transfer on death deed is another document entirely.  If you weren't already screwing with the will, then yeah the "TOD" deed would be possibly simpler.

No, you don't need the old deed.  You don't "sign it over" like a title certificate. You do need to know the current state of title, that is, who are the owners of record. A copy can be obtained from the county clerk for that purpose, or you can just look it up, probably online for a small fee (lawyers can do that).

A deed conveys from grantor(s) to grantee(s).  You use the prior deeds to determine who is who, so to speak.