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Real estate / Family law experts?

Kbach

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Any real estate law experts on here?

Here’s the deal. My sister will inherit our parents’ house when my Dad passes (hopefully a LONG time from now!). My Mom passed away almost 20 years ago and at the time, the house was paid off. My Dad remarried down the road, and has said verbally that the house is ours when him and his new wife are gone but she gets to stay if he passes first as long as she doesn’t remarry. Both him and his new wife have said that is what is to happen, but nothing has been put on paper and there hasn’t been a will/trust created. My Dad is extremely old school and says this is what he wants so that’s the way it is. My sister and I are on good terms and aren’t worried about one of us taking over the house or any belongings without the other one knowing – no problem there.

Where the potential problem could be is with the new wife’s family. Am I correct in assuming since my Dad and his new wife are legally married that whatever is left when they’re both gone could technically be split 50/50 with my sister and I and the new wife’s kids? He also has a sizeable pension/401K that the new wife’s family could try to get as well right? There was never a pre-nuptial or anything and 99% of his wealth and assets were from before he remarried. She brought very little to the table financially as I understand it…

We’ve asked my Dad to put one of us on the title for the house but he hasn’t done anything. We also tried to get him to do a living trust/will/etc but he hasn’t done anything. Like I said – he’s old school where a hand shake means everything. I’ve explained to him that doesn’t mean squat when he’s gone – everybody gets greedy when free shit is on the line!

Now enter Prop 19. Since his house was bought for around $40k and has been paid off for a long time his property taxes are barely over $1k. As I understand it, with Prop 19 taking effect in Feb 2021 once we inherit the house it will be reassessed (~$700k value now) so the taxes would jump nearly $6k per year right away. If either my sister or I are on the title before Feb would we be able to avoid that reassessment down the road? What do we need to do?

Sorry for the long explanation but any input would be appreciated.
 

shintoooo

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Old school won't work. His wife will get everything unless it's in writing. Get together with your sister and sit down with your dad and have a heart to heart and explain to him the situation. Tell him that you will schedule a meeting with an estate attorney for him to get all his ducks in a row. Any other way, you might not end up with anything.
 

74 spectra20 v-drive

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You need to get a trust set up, this is what my Wife does and you would not believe the heart ache that happens when people say, "this is what I want" tell your Dad that to insure that his wishes are fulfilled that he needs to set this up. With the multi family and property I would see an attorney, to make sure its correct.
 

2Driver

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Old school won't work. His wife will get everything unless it's in writing. Get together with your sister and sit down with your dad and have a heart to heart and explain to him the situation. Tell him that you will schedule a meeting with an estate attorney for him to get all his ducks in a row. Any other way, you might not end up with anything.
^ this all day

The way it stands now it is destined for law suits, year’s of legal battles and many new enemies created
 
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4Waters

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Old school won't work. His wife will get everything unless it's in writing. Get together with your sister and sit down with your dad and have a heart to heart and explain to him the situation. Tell him that you will schedule a meeting with an estate attorney for him to get all his ducks in a row. Any other way, you might not end up with anything.
^^^this^^^^ the state will take 1/2 of everything. Offer to pay for it all, no money out of his pocket and in the long run you and your sister will be money ahead.
 

Carlson-jet

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After everything is said and done, It might jest be better to take out a life insurance policy that you and your sister receives that Pops signs and call it a day.
I'm not a lawyer but it seems like too much water under the bridge already.
May pops live many years. The big thing is to enjoy the person not the financials.
 

rickym20

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What state is the home in? Is she on the loan? On title? Community property state?

Some of the questions that played a roll when my Dad passed last year. Similar situation you are in but Dad was gone before any ducks were in a row. Definitely get the trust done, even if you have to walk Dad through the process.

Probate is a lengthy process and my stepmother/siblings agree on what the outcome should be. Couldn’t imagine going through it with disagreements.
 

HNL2LHC

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Old school won't work. His wife will get everything unless it's in writing. Get together with your sister and sit down with your dad and have a heart to heart and explain to him the situation. Tell him that you will schedule a meeting with an estate attorney for him to get all his ducks in a row. Any other way, you might not end up with anything.

Yeah, happened to Tommy Boy a few years back. In God you trust. All others pay cash!!!
 

dezrtracer

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Get a trust . Also get the house in your sister and your name since prop 19 passed ( it might be too late ) . I just did all this with my mom"s house . Written in the trust it belongs to mom till she passes but , save you guys in taxes down the road , Shintoo will know more . I had a Elder Law Attorney get my mom on Medical with the Assisted Living Waiver too .
 

Mandelon

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Yes! Living trust is a must. His new wife would get a "life estate" but then the property would go to you and your sister.

Also do a Will and possibly a DNR order. Do Not Resuscitate if that is his wish. This should keep him from being on life support for months on end.

As noted, you can set it up and pay for it. All he needs to do is sign it.
 

LuauLounge

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My father had the same attitude. Fortunately, he listened and my parents set up thieir trust 7 days before he passed. My mom passed 5 years later. At that point, all was split between my sister and I. I've spent more time registering a car than transferring the bank accounts and stock accounts.
 

Ace in the Hole

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If there isn't a solid trust set up she will get everything and act like nothing was ever said. Call an estate attorney, it will cost you but they make house calls.. ours did for my in laws..I didn't want to be involved in a legal battle with my wife's brothers down the road especially with the size of their estate. My mom's trust has been long setup...gotta keep my sister's grubby hands off things.
 

ssc

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Based on your info, which is incomplete, we can only make assumptions. So, I assume the house is in CA and is your dad's primary home. I assume he has no will nor trust. I assume he has not added your stepmom to title. It sounds like your Dad wants to leave stepmom a life estate, but he would need to do a will and trust. With the above assumptions, you are headed for a train wreck. I assume Dad dies intestate and then the house would be divided between his children and stepmom. It would have to go through probate and cost the estate money and there may be tax issues. If he put your stepmom on title as joint tenants with right of survivorship, no probate and the house passes to her in totality. With that said, I haven't specialized in probate law and it is imperative that you consult with a probate attorney immediately. If a proper trust is set up, it will protect you from probate, costs and taxes. If the house goes to you upon his death via the trust and it is his primary residence, you are entitled to a step up basis. I have not studied Prop 19 as close as I should, but I suggest, in addition to a probate attorney, that you schedule a consult with a tax attorney and accountant.

Problem number 2. If you drag dad to a probate attorney, he may demand a trust that sets up stepmom in a life estate. Various issues may arise from that issue. The probate atty can better explain. Additionally, if it is a living trust that is deemed revocable, you might as well forget about getting anything. Upon your dads death, stepmom can revoke the trust and change all the terms, including upon her death that the house and stuff goes to anyone she wants. There is a bit more to it, but be sure to discuss this with the probate atty. There are also irrevocable trusts. Again, something to be aware of and to discuss with the probate atty.

Regarding the 401k, has dad named a beneficiary? You need to discuss this issue. If you and sis are the named beneficiaries, then it probably will not be in the trust, but mentioned in the will. Same with the pension. Though depending on the pension and whether he made certain elections, there may or may not be anything that survives his death. A few more things to look into and discuss with dad and the atty.

Just a few thoughts,

Cheers, Steve
 

Motor Boater

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Yeah. You’re in a bad situation. Unfortunately many older people don’t want to think about this or talk about. I know a guy that went through it. His mom married late in life and died a few years later. New husband and his kids took every dime of the fortune his dad built.
 

Cdog

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Good advice here. I’m a RE broker in AZ & CA and would recommend you get some legal help now as you and your sister will be thrown to the wolves after the fact.
 

farmo83

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One of the smartest man I have ever known told me when I was young "death is all about money." And its more true today in our sue happy environment. Money spent now to get it all written down will solve many headaches later.

Also keep in mind lawyers can do anything. A long time family friend was basically estranged from his wife for years but still married. In his will he literally put "to my loving wife of 35 years i leave nothing." They found natural gas on some land he had tonthe tune of about 20k a month. His wife went to court and broke his will. His kids didn't get a dime.
 

RVR SWPR

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Your Dad knows exactly what he doing.The fact his wife stays in the house probably indicates she on the young side.At the least get ready to share with the step mother and her family.
 
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2Driver

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I beleive that simply putting your name on the ttile just puts you in a situation where you just made $350k of unearned income you need to pay income taxes on now and may reset the prop tax value.

Another reason to check with a solid estate attorney and tax person. Dont go to the “ estate plan in a can” people either get someone professional. This isn’t the time to save $3-$4k
 

Dennis-19

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People change and emotions run high when people die and there is money up for grabs. I have experienced this personally and professionally many times.

The property is already half your stepmoms technically. She would have to sign a disclaimer deed if not it’s automatically community property. When he dies it’s all hers and I can only imagine she would want all or at least a portion of it to go to her and her kids.
 

TimeBandit

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California?

More complicated than you might think.

A true story:

Married couple of 55 years, she dies. He finds she has a bank account with $900k in it, He can't access it. It's in her name only. (they are not poor)

Probate attorney charges man 10% to get ownership transferred through probate court. That's right, 10% to get his own money back.

Don't have joint accounts? this is your future.
 
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Carlson-jet

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Post # 21 pretty much says what is, is is.
Check into post # 7. that will be one phone call and a deposit.
 

C-2

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Based on your info, which is incomplete, we can only make assumptions. So, I assume the house is in CA and is your dad's primary home. I assume he has no will nor trust. I assume he has not added your stepmom to title. It sounds like your Dad wants to leave stepmom a life estate, but he would need to do a will and trust. With the above assumptions, you are headed for a train wreck. I assume Dad dies intestate and then the house would be divided between his children and stepmom. It would have to go through probate and cost the estate money and there may be tax issues. If he put your stepmom on title as joint tenants with right of survivorship, no probate and the house passes to her in totality. With that said, I haven't specialized in probate law and it is imperative that you consult with a probate attorney immediately. If a proper trust is set up, it will protect you from probate, costs and taxes. If the house goes to you upon his death via the trust and it is his primary residence, you are entitled to a step up basis. I have not studied Prop 19 as close as I should, but I suggest, in addition to a probate attorney, that you schedule a consult with a tax attorney and accountant.

Problem number 2. If you drag dad to a probate attorney, he may demand a trust that sets up stepmom in a life estate. Various issues may arise from that issue. The probate atty can better explain. Additionally, if it is a living trust that is deemed revocable, you might as well forget about getting anything. Upon your dads death, stepmom can revoke the trust and change all the terms, including upon her death that the house and stuff goes to anyone she wants. There is a bit more to it, but be sure to discuss this with the probate atty. There are also irrevocable trusts. Again, something to be aware of and to discuss with the probate atty.

Regarding the 401k, has dad named a beneficiary? You need to discuss this issue. If you and sis are the named beneficiaries, then it probably will not be in the trust, but mentioned in the will. Same with the pension. Though depending on the pension and whether he made certain elections, there may or may not be anything that survives his death. A few more things to look into and discuss with dad and the atty.

Just a few thoughts,

Cheers, Steve
Solid advice right there. The laws of intestate succession are what you are worried about; disregard many of the other posts in this thread, except for this one. Pops will need to cooperate, and unless a trust is funded with the assets - it won't matter. So usually, a do-it-at-home Nolo type trust will not suffice.
 

satellitemike

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Location?
I just finshed updating my trust this evening and setting up an LLC in AZ.
 
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LargeOrangeFont

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Get a trust . Also get the house in your sister and your name since prop 19 passed ( it might be too late ) . I just did all this with my mom"s house . Written in the trust it belongs to mom till she passes but , save you guys in taxes down the road , Shintoo will know . I had a Elder Law Attorney get my mom on Medical with the Assisted Living Waiver too .
Not too late yet. Have until Feb 16!
 

DLC

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A lot of good info in here.
ask some of your wealthy friends for a local guy to do a living trust. Go see him on your own to get the correct info, set one up for your self also, then go see your dad!
talk to him explain the realities of what COULD happen worst case!

money changes people and things happen while grieving. This is about protecting everyone and your dads wishes. Foolish not to have one.

there are 1,000’s of stories of inherence gone bad, just on the paid out taxes alone is worth having something written down
 

Carlson-jet

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I know My advise is not leading material but it is low budget.
At the same time I just want to say to the RPD crew. Nice work.
No doubt there are many avenues which to choose and I would not discount the best flagged.
Love this place.
 

ssc

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The property is already half your stepmoms technically. She would have to sign a disclaimer deed if not it’s automatically community property.
This is not a call out, just a bit of helpful information. The above statement is absolutely incorrect respecting CA law. Once again, assuming dad owned the house prior to marriage to stepmom, it is still his separate property. Just because they got married does not convert it to community property. I do not know what a disclaimer deed is nor is she required to sign anything. The property doesn't automatically become community property. Dad can convert his separate prop to community prop via a transmutation or a gift, but that is another story with many factors. I have litigated these issues many times over the years. The community can gain a pro tonto interest in dads separate property if payments are made etc, but again it is still his sep/prop.

Once dad dies, then it goes to probate laws and I am not a probate attorney.

Cheers, Steve
 

Kbach

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I can’t say enough thanks to you guys. I got home from work. In-laws power was out so had to go handle that. Just finished getting them dialed and our power went out...just my luck! Now we’re camping in the motorhome in the backyard 🤣

I am in CA and basically everything I’m reading is what I expected. My dad is young (77) and new wife is 75 so hopefully nothing happens for a long time.

If I miss the boat on the prop 19 taxes so be it. I’m more worried about the house/estate and everything else long term...

Again, thanks to everyone for the info. Looks like I’ve got some homework to do.
 

Danger Dave

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I wouldn't rule out a hunting accident. Can solve a lot of issues in a time of dispute.
 

JJK94

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I can’t say enough thanks to you guys. I got home from work. In-laws power was out so had to go handle that. Just finished getting them dialed and our power went out...just my luck! Now we’re camping in the motorhome in the backyard 🤣

I am in CA and basically everything I’m reading is what I expected. My dad is young (77) and new wife is 75 so hopefully nothing happens for a long time.

If I miss the boat on the prop 19 taxes so be it. I’m more worried about the house/estate and everything else long term...

Again, thanks to everyone for the info. Looks like I’ve got some homework to do.
Forget the money right now, Get him to get a Detailed Advanced Directive ASAP. I was just put in a position this weekend to start dialysis on my mother, Even with an AD the doctors were asking me what I wanted to do as they advised against dialysis because of her condition 3 doctors advising, We decided against. Saturday Doctor would not respond to calls. Sun morning. You mom is not doing well We have done all we can, She has been a fighter but we don't see her pulling through. Ok Read the directive tell me what you think, Two doctors have to sign, You figure it out, These are her wishes. They are in concurrence and Hospice it is. All setup up, going to start soon.. Another doctor calls and says let try dialysis, I think we should give it a shot. We are Like WTF.. Did you read the directive?, Did you consult with your associates? Call me back when you figure it out. Calls back and says the directive really isn't that clear. I think we should give it a shot.. So here we are. Been on dialysis for a day and a half.. Im told this evening , She isn't moving backwards but some of the numbers are coming up.. You don't want to be in this situation.> Get that AD
 

franky

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Just so you know for the future or maybe you want to take care if now, the base value of the house can be reset to the value when your mom passed if it was held jointly. That way the gain will be based on the difference of sale price and established current market value when mom passed. You will need a forensic appraiser.
Example from my experience. Dad paid $65k for house in 1976. Sold it in 2018 for $800k. We had basis value reset to when mom passed in 2010, $585k. New gain $215k (vs $735k) but with capital gains on primary residence exclusion of $250k, zero taxea.
 

Hypnautic

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If I may add something not mentioned yet.
Any inheritance (money, property, auto’s, etc) must not be commingled into your joint accounts with your spouse. If you do that-it becomes community property and could be split 50/50 in the event of a divorce.
There is so much more than what has been said once you start getting into it. Examples of things to get in order.
- set up binder with all accounts/PW. Book with all Trust/will, deeds. Should have atty info too.
-computer logins/pw
- how many death certificates you will need. Recommend 12 depending on size of estate and number of accounts.
- transfer any mileage or CC rewards before you cancel cards.
- set survivor trust acct for depositing income and paying expenses (will need TIN)
-appraisal may be needed at time of death
Extra house keys and car keys.
-trustees should have keys to home. Copy of advanced health care directives and copy of trust.
-list of contacts to contact

My sister and I get along great. There would be zero fights but this still needs to be done. And parents only married once for 50 years. 3 inch binder worth.
IMG_0307.JPG


My parents have paid over $35k in estate planning to date. But that cost includes basically redoing everything from scratch when they moved from CA to OR. So don’t think your trust will protect heirs if you moved states-different state //different laws! Don’t think that’s expensive either- since the beginning retainer fee for a probate atty starts at $10-15k

Here is their CA attorney
IMG_0308.JPG


As said before. Needs to be done. Needs to be updated as assets and laws change.
 

Turnup

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If your dad married a young Filipino that has kids you're pretty much done SOL 🤭
 
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Dennis-19

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This is not a call out, just a bit of helpful information. The above statement is absolutely incorrect respecting CA law. Once again, assuming dad owned the house prior to marriage to stepmom, it is still his separate property. Just because they got married does not convert it to community property. I do not know what a disclaimer deed is nor is she required to sign anything. The property doesn't automatically become community property. Dad can convert his separate prop to community prop via a transmutation or a gift, but that is another story with many factors. I have litigated these issues many times over the years. The community can gain a pro tonto interest in dads separate property if payments are made etc, but again it is still his sep/prop.

Once dad dies, then it goes to probate laws and I am not a probate attorney.

Cheers, Steve
What I shared is correct.

A disclaimer deed is an instrument used to surrender any claim of ownership of real property. They are used between married couples.

It doesn’t matter if it’s separate if there is no will. That all goes out the window upon his death (probate).

If he dies intestate then probate will treat as community property with right of survivorship but she will likely need to split with kids since they are his other heirs. My point is unless she signs a disclaimer deed or surrenders her future interest (whatever amount the family agrees on) in a method acceptable by the the courts, she will be entitled to some or all interest.

My advise to the OP and his siblings is to hire a trust attorney before they end up needing a probate attorney.

You mentioned earlier about dad taking title with wife as joint tenants, they can’t. They would have to acquire at the same time and hold equal shares.
 
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ssc

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First, you are mixing apples and oranges. In CA, which is the state we are talking about, we do not have "disclaimer deeds." Please reread this thread. We are talking about CA. Second, what you are confusing is Divorce law with probate. Third, you are confusing property acquired during marriage with property acquired before marriage. Just because they get married, the property doesn't become comm/prop. Your definition as to what happens upon dads death is also wrong and ambiguous. Intestate is very specific as to how the property is divided. Lastly, your "point" is absolutely wrong.

Cheers, Steve
 

ssc

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You mentioned earlier about dad taking title with wife as joint tenants, they can’t. They would have to acquire at the same time and hold equal shares.
I will try to not be condescending. I have received two calls about the above quote, that you added via your edit. Again, assuming CA law only, you are absolutely, unequivocally wrong. The above statement is Bullshit. So as to not have incorrect info left out there on the erronet let me explain. If Joe Blow buys a house and is not married, he has a few choices as to how he can take title. Usually it is Joe blow as a single man etc. Then somewhere down the road JB marries or just dates Jane Sucks or just decides for whatever reason to place her on title to his house, he can do that. It is very common to then do a grant deed granting the house from Joe Blow to Joe blow and Jane Sucks as Joint tenants with right of survivorship.

Many folks will do this for probate planning purposes. Doing a trust is more beneficial. However, in this case, Dad could add son as a Joint tenant with right of survivorship. Hence, NO!! you do not have to acquire the property at the same time. As far as your comment about equal shares, it is ambiguous and perhaps you are confusing JT tenancy with tenants in common. However, I am only speculating as to what the hell you are talking about.

Cheers, Steve
 
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