Lifetime estate holder responsible for taxes, ownership dies when he does
Q: My mother died in 1998 and left me her house (no mortgage).
Her husband, my stepfather, has a life estate.
He is 91 and recently developed dementia.
He has been in a rehab facility and will not be returning to the house.
Up until this year, he paid the real estate taxes and I thought he had been maintaining the house.
His children returned the current real estate tax bill to me last week and said he can no longer pay it.
They also said they are trying to "clean up" the house.
I live elsewhere and have not seen the house in about two years, so I am not sure what needs to be done.
He will not sign a deed to me.
His children want me to sell the house and split the money with him.
I want to keep the house as a rental property.
What needs to be done to terminate the life estate?
I will probably need an attorney, but I would like to know what is involved so I don't pay for excess legal fees, which I cannot afford.
-- S.F.
A: The IRS has tables calculating how much of the house's value is attributable to your stepfather's life estate. (See IRS publication No. 1457.)
At his age, I should think that is a small percentage, and it's becoming less every day. It would be in his children's interest to do something as soon as possible.
For when he dies, his interest also dies, and you automatically become full owner. Until then, he, as owner, is responsible for those property taxes.
If he has developed dementia, there must be someone who has authority to act for him, who could sign his interest over to you.
Or if you decide to sell, sign a deed releasing his interest.
Are you sure you want to keep the property?
Think twice before trying to be an absentee landlord. It's easy to get into trouble if you're inexperienced and out of town.
Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at edithlank@aol.com.
