By Quentin Fottrell
The mortgage would be paid out of my estate. But who should cover taxes and home insurance each year?
I have been married for five years to my second husband. We live in the house I bought over 20 years ago which is only in my name, just like the mortgage.
He pays me a little less than half the amount of my mortgage and we share other bills, me paying a little more for utilities. I also pay for all maintenance and home improvement costs, even if he does some of the work.
I have an adult child and a grandchild, and he also has adult children. I would like to leave my house to my child, but I would allow my husband to continue to live there as long as he wishes, or until his death. The mortgage would be paid out of my estate.
Who should cover taxes and home insurance each year? I’m leaning towards clarifying that my husband covers this, and also leave funds for maintenance like a new roof or air conditioning.
My husband and I disagree on whether he should inherit part of the house. He feels like he’s paying part of the mortgage. I don’t want part of the house to go to her children when she dies, or my child to have to buy them out.
What’s the best way to do it fairly?
Your husband came into your life late in the day. You have been married for five years. You bought your house 20 years ago, long before you met your husband, and you’ve worked hard to pay it back. After five years of marriage, giving him a life estate in your house to live in rent-free in case you predecease him is generous.
Your husband has agreed to pay you 50% of the value of the mortgage, but he’s not actually paying half of your mortgage – for better or for worse, for richer for poorer, he pays rent. As hard as it may seem, it is his responsibility to buy a house for himself and make it an inheritance for his children.
If your husband lives in the house, it’s only fair that he pays for property maintenance, home insurance, property taxes, and other costs, especially since your estate would pay off the mortgage. . Every detail should be worked out by a lawyer who specializes in estate planning and trusts.
“The life estate avoids probate because the real estate goes directly to the children on the death of the life tenant,” according to the Winston Law Group “The life estate can also protect the home from a Medicaid lien on death, although there are a five-year transfer penalty period imposed for Medicaid at the nursing home level.
There are also disadvantages. Ross & Shoalmire writes: “If the life tenant fails to look after the house and it falls into disrepair, there is little the beneficiary can do to protect their future investment. If the life tenant becomes disabled and requires a retirement home, the home will not pass to the heirs until their death.”
No solution is perfect. For example, your children, if they needed money after your death, would have to wait until your husband died to inherit the property. But a life estate, assuming you set it up in the coming months, gives your husband a roof over his head for the rest of his life.
That’s not a bad deal after five years of marriage.
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