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Parent Should Not Get Rid of House Unless Need is There
Jan L. Warner & Jan Collins

Question: I enjoy reading your column in the online edition of our local paper. I am a senior in good health, divorced for more than 20 years, with two grown children. I receive a small pension and Social Security benefits based on my divorced husbandís earnings record. I have a relatively small bank account and a home on three acres where I raised both of my children. Since my home is out in the country, I donít think it would bring too much if it were sold.

Both of my children love the house and want it when I die. The problem is that my older son is an alcoholic and doesnít work half the time. If I leave the house to both of them, I am afraid that my older son will move in and take over the house. My younger son is intimidated by his older brother and would never challenge him. My older son has been trying to get me to go to his lawyer, which makes me nervous. Also, I donít think the boys will be able to agree on how to divide up the furniture and jewelry I have acquired. How can I make sure both boys get what they want?

Answer: First of all, if you are a senior in good health with many good years still ahead of you, why are your children trying to carve up the turkey while it is still running around the barnyard? Unfortunately for your children, in some instances, everyone does not get what he wants.

That said, if both children really want the house, you should consider appointing an independent personal representative to handle your estate. Your will should contain provisions to the effect that 1) upon your death, the bank accounts will be divided equally between your sons, 2) your home will be appraised at fair market value, and 3) each of your children will have the right to bid on the house, with the appraised value being the beginning bid. The highest bidder gets the house, and the terms of the deal are cash. No, "if I get financing" or "will you take my note?"

If one of your children does not bid on the house, your personal representative should be instructed to list the house for sale with a qualified realtor and, upon sale, split the net proceeds equally between your sons. And, you might want to consider setting up a trust for your alcoholic son to protect his half interest.

Question: When my husband died, he left everything to me -- including a lot of debts. I worked day and night to raise my children and pay down the debt. My will leaves everything to my children, but I have been thinking that I should go ahead and deed the house to my children now. I am in my late 60ís, and my children are all working. I plan to keep living in the house until I must go into assisted living, but I want the security of knowing that my children own the house in case something happens to me. What kind of lawyer should I see?

Answer: One that dissuades you from giving away your biggest asset. While you may not need it now, if you run short later, you just might want a reverse mortgage to tap into your equity. Or, you might want to move and purchase a new residence. Or, you just might want to keep the cash. We donít think itís a good idea for anyone to give away assets Ė especially a house Ė unless there is a darn good reason to do so. And, to us, there isnít one here.

Taking the NextStep on quite a different note: If you are a remainder beneficiary of a trust Ė that is, if you are to receive distributions from the trust upon the death of the lifetime beneficiary, you have an absolute right to be informed not only about how the trust assets are being invested, but also what distributions are being made to the life beneficiary and under what authority. Trustees have fiduciary duties to remainder beneficiaries to maintain and grow principal while, simultaneously, to income beneficiaries who want the trustee to maximize income.



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