My mother left her house to my two brothers. They said I could live there rent free if I paid taxes and alimony. Is this a good idea?

0

By Quentin Fottrell

‘How are they going to pass the house on to me?’

Dear Quentin,

My father predeceased my mother and she inherited her second home. My mother inherited the house and property to my youngest and oldest brother. None of them are able to take care of the house or property and have given me permission to fix it and live there.

The deeds are still in my parents’ name and my brother has a copy of the will showing his ownership. How are they supposed to pass the house on to me? I don’t want to pay the back taxes and put thousands of dollars into it and then lose title to the property. Thank you for your advice.

daughter/sister

Dear daughter/sister,

Your question contains some worrying assumptions. You assume that your brothers will simply stop claiming ownership of you and/or convince your mother to leave the property to you before she dies. It is highly unlikely that they will do so in hindsight. I have tons of Moneyist letters that would confirm this finding.

If you can’t afford to buy a house today and it’s cheaper to live in that house now and/or after your mother dies, then do it. It would help you save for your retirement, and maybe you could build a nest egg for a down payment on a house of your own. But don’t count on your brothers giving you the house.

Best course of action: Have your mother amend her will and/or sign a death certificate making the house yours after her death. That is, if your brothers were also willing to agree, and there is no indication in your letter that they would support such an action.

A transfer on death works the same as a beneficiary on a bank account or insurance policy. One of the most important aspects is that it avoids a probate process – the public accounting of your mother’s assets and liabilities – because the house passes to you after her death.

It would have the added benefit of giving you a “base increase” in capital gains taxes. This means the profit on a future sale of the home would be calculated as the selling price minus the recent appraised/market price of the home – rather than your parents’ original purchase price.

Of course, consult a trust and probate attorney before making any decision, and be open with your mother and brothers about this dilemma. But don’t spend money on taxes and renovations thinking your brothers and/or mother will sign the house over to you. That would be a very big mistake.

In the meantime, I have a question for you: why does your mother only leave this house to your brothers? Will she leave you other assets instead? You could certainly ask that question to your mother. Of course she can do whatever she wants with her estate, but it seems fairer if she includes all three children in her will.

Join the Moneyist private Facebook group, where we seek answers to life’s toughest money problems. Readers write to me with all sorts of dilemmas. Ask your questions, tell me what you want to know more about, or subscribe to the latest Moneyist columns.

The Moneyist regrets that it cannot answer questions individually.

By submitting your questions via email, you agree that they may be published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publishers of MarketWatch, you understand and agree that we may use your story or versions of it in any media and platform, including through third parties.

Also read:

My son’s wife got pregnant by a registered sex offender, which delayed her divorce. He pays child support for this child. What now?

“Am I the greatest fool in the world?” I married my husband after being together for 25 years. Now he wants a divorce. I will be left with nothing. What can I do?

“I hugged him. All I felt was bones’: My father, 90, and abusive mother are getting divorced. I’ve already fired four lawyers. How do I find a good lawyer?

-Quentin Fottrell

 

(ENDS) Dow Jones Newswires

11/17/22 1420ET

Copyright (c) 2022 Dow Jones & Company, Inc.

Share.

Comments are closed.