Rick Merrill <rick0.merrill[at]gmailNOSPAM.com> wrote:
- quote -

Sure. But if she does that more than nine months after her
husband dies she loses any right she has to benefit from
what she has, and the value of her life estate becomes a
taxable gift to her kids.

Depending on surrounding circumstances, a partition might be
best.

Stu

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Nan, EA in LA wrote:
- quote -

LOL! And here I was under the impression that California
was THE different state.

C$,
HL

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Stuart A. Bronstein wrote:
- quote -

That can be done by having her sign, with some witnesses, a
statement renouncing or discarding the life estate.

Rick
Merrill

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Harlan Lunsford wrote:
- quote -

I'm just getting familiar with Google's layout for
misc.taxes so this may double up. Sorry. But the replies
have been very helpful. The widow is in a nursing home and
the $80,000 is set aside for her expenses. It was listed in
the escrow as if it were an expense of the sale and reduced
the proceeds to the two children. I see that I need to
contract the Rhode Island lawyer. Was the house solely
owned by the father? Did the wife have any ownership?
Etc.........

Very tricky dealing with eastern states; they're really
different.

Nan, EA in LA

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Harlan Lunsford wrote:
- quote -

Good question Harlan. I need to ask questions of the Rhode
Island attorney. The escrow paper listed the $80,000 as if
it were an expense in escrow - reducing the amount received
by the two beneficiaries. The widow may have had the right
to inhabit the house for her lifetime but she is not able to
do so and the money is set aside to pay her nursing home
costs.

(Hate having to figure out legal rights in eastern states.
They're different!)

Nan, EA in LA

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Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

If the facts are correctly stated, what probably happened is
that husband left his wife a life estate in the house, with
the remainder going to the two daughters.

Since the widow is in a nursing home and not able to "enjoy"
the life estate, it is possible to sever or partition the
life estate from the remainder estate. That can done by
checking IRS longevity tables (I forget at the moment where
they are in the regulations), and multiplying the life
tenant's calculated percentage of ownership by the full
value of the property.

For example, if the tables say the wife's interest (based on
age and prevailing interest rates) is 33%, and the home was
worth $240,000, then the widow's portion is worth $80,000.

Stu

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Nan, EA in LA wrote:

- quote -

How does that work? How does one (or two in this case)
inherit a house from a widow not yet deceased?

OR, was the house owned solely by the now defunct father?

ChEAr$,
Harlan Lunsford, EA n LA
Sat 12 Mar 2005

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

The life estate has the same value both immediately before
and immediately after the date of death. So my guess is
that the entire profit is attributed to the residuary
beneficiaries (client and sister).

Stu

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Client and sister (in CA) inherited parents' home in Rhode
Island. House sold for $17,000 more than appraised value, d
of d. In escrow, there was $80,000 reserved (into an
account) for the life estate of the widow who is in a
nursing home. Is the $80,000 deducted from the profit or do
we ignore it and use the $17,000 profit?

Nan, EA in LA

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