Living La Vida Local
...continued

“Another alternative is to offer your stepmother cash to terminate her life estate. Perhaps she would like to move to an assisted-living center where she can receive care and cooked meals in a nice facility. Waving $50,000 or $100,000 cash (theoretically) in front of her might convince her it's time to move out and terminate her life estate.”

For direction on how to execute life estate alternatives, please consult an attorney.

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MY EX-WIFE’S DAUGHTER WON’T LEAVE HER LIFE ESTATE

Question: Years ago, when my wife and I divorced, I agreed she could have a life estate in my house in Northern California. She lived there until last winter when she had to be moved to a senior care home. She has Alzheimer’s and will never be able to live alone again.

I would like sell the house, but her daughter from a prior marriage has declared I can’t do that while her mother is alive, and has moved into the house.

My title company, because of the circumstances, will not insure the title for a new buyer. Is there anything I can do? – George M.

Answer: Bob Bruss is the expert on life estates. He says, “Your situation is an example of why I do not recommend life estates. At the time, you and your ex-wife thought you were doing the fair thing. But now look at the mess, with no end in sight.

”The wording of the life estate should have specified that it terminated when the life tenant died or moved out for more than six months. Because that wasn't done, the life tenant's daughter feels the life estate should continue while her mother is alive.

”The legal solution is to bring a quiet title lawsuit against the life tenant, your ex-wife. Her daughter might seek to intervene in the case. It will be up to the judge to rule if the life estate is terminated or if it lasts until your ex-wife dies.”

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LIFE TENANT CAN'T PAY THE TAXES

Question: I am a life tenant struggling to pay the property taxes on the property I reside in. Now, I have fallen behind and I am afraid the tax collector will come knocking at my door and threaten to sell the house. Shouldn’t the taxes be the responsibility of the person who will inherit the house when I die or move out? What should I do? – Renee T.

Answer: The legal experts say that most life estates require the life tenant to pay the property taxes and the mortgage interest (if any). The law has it that unless the property taxes are paid, the tax collector can hold a tax sale of the property, thus wiping out your life estate and the inheritor’s interest.

You are fortunate, in that the inheritor, who will receive clear title to the house after you die or move out must be notified of any pending tax sale. They will probably pay the property taxes to preserve their future interest. But the inheritor could then bring a legal action against you for failure to pay the property taxes.

Authorities suggest that if you are on friendly terms with the inheritor, perhaps you can make a deal to terminate your life estate now in return for a substantial payment. Such a transaction could benefit all parties involved. Be sure to consult
a local real estate attorney to protect your interests in your life estate.

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Still love your newsletter. I print and circulate to the guys. And they read it!
And, not that it will make any difference, but it is so distressing to see so many duplexes on the chopping block, offered as tear-downs for the building of fancy condos.

It's distressing in greatest part because there is no place for the displaced families to go, what with the rental market being "strong".

For people who rent, people like me and other worthy individuals, the crisis is HUGE.

We are forced into an expensive, exhausting, air-polluting, life-shortening commuter lifestyle, or we must abandon our jobs, our friends and our families, and move to another state.

How can this possibly be good news? Why do we just allow the middle class to disappear? Where is this dream we once called America? Is there no one who gives a damn? Or does humanity and sense of rightness and proportion completely die in the face desperation to be in the investor class?

Heart is breaking,
Lily


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Thank you for the 2nd quarter real estate wrap up article. Seems like in the last housing "soft landing" that the Anderson folks predicted an end to the slump every year for at least four years (okay, maybe six) before they were finally correct. Their thoughts - as with those of economists in general - are worth noting but seldom the kind of information to take too seriously in my estimation.

Thank you again.
Dave


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For more on Southern California commercial properties there is a great information blog at www.socalindustrialrealestateblog.com.