Life estate deed - no problem, right?

Clients recently came to Jlawrence Realty to sell a home that had been in the family for over 50 years.  Their mom deeded the house to six of her adult children with a reservation of a life estate after their father had passed away.  No issues, correct?  Really? Well, one sibling, we will call him Bob, had also passed away.  What happens to Bob's interest in the family house? Does it go to his estate? To his ex-wife? To his children? Revert back to his siblings?  Hmmmm.

Who can make the decision to sell?  In this case, one sibling lived in another state and was off the grid? No Internet access?  What if that sibling didn't want to sell?

Just have the mom cancel the deed and have her sell it?  Can she do that?  Some of the siblings thought that could be done.  Why not? Mom had created the life estate and lived in the house until she had to go to an assisted living complex. In reality their Mom had no right to cancel the deed.

What if one the siblings had a judgment against him or her? Would that create a lien on the house?  What if the judgment was for more than the value of the house? What if one of the kids filed bankruptcy? Amy Carrol faced the scenario I just described.

Laura Giuseppetti faced one in which a prior owner had filed bankruptcy and it wasn't included in the bankruptcy filing because it was a life estate (they didn't think it mattered).  Well it did matter. What if a lawyer doesn't have a judgment removed as a lien against the home in a bankruptcy proceeding (many lawyers fail to take this important step).

Amy faced a situation in which one of the sellers was a trustee living out of state of a trust for minors created in a Will of her mother who lived and had a home here in WNY. Do NYS income taxes need to be withheld at closing as is typically required for out of state sellers, or out of state trusts? The attorneys seemed to think so. However, a careful reading of the law demonstrated that the Trust is not deemed an out of state trust if the decedent passed away here, made the Will here, and the home is here.  The tax payment would have been over $20,000 had we not looked at it.  

All of these types of issues are sometimes faced in real estate. As an experienced real estate attorney (not currently practicing), I am in a unique position as Broker of Jlawrence Realty to guide my agents in how to handle these matters. 

You are in good hands with Jlawrence Realty.