How to give my wonderful renter my house after I die .
July 2, 2019 4:02 PM Subscribe
I have an income property i want to know how to deed the house to the long time renter, What is the best way to do this without letting her know until after I've given up the mortal coil , I qualify for SS now and the income from rent has been a huge help , the house is completely free and clear, is there a particular trust deed that can make this happen twenty years from now.
My closest family member already has a dozen houses .
See a lawyer and get a will drawn up, that’s the best way to do it.
posted by katypickle at 4:13 PM on July 2, 2019 [6 favorites]
posted by katypickle at 4:13 PM on July 2, 2019 [6 favorites]
There might be a way you can do this that creates a transfer without probate, but you'll need to talk to a lawyer in your jurisdiction. It should be straightforward and inexpensive.
posted by crush at 4:22 PM on July 2, 2019 [1 favorite]
posted by crush at 4:22 PM on July 2, 2019 [1 favorite]
Talk to a lawyer, and say the words "beneficiary deed."
posted by freshwater at 4:34 PM on July 2, 2019 [4 favorites]
posted by freshwater at 4:34 PM on July 2, 2019 [4 favorites]
Make sure you do this soon, add her on as a joint tenant right away. The sooner the better, because of problems that come up if you end up on medicaid and unable to function.
posted by Oyéah at 4:53 PM on July 2, 2019 [7 favorites]
posted by Oyéah at 4:53 PM on July 2, 2019 [7 favorites]
Is this on the assumption that this person will still be renting the house in 20 years time? I'm asking because you might want to consider whether the gift has any conditional element pertaining to residency of the property at the time of your passing, before setting things in stone.
posted by freya_lamb at 4:53 PM on July 2, 2019 [15 favorites]
posted by freya_lamb at 4:53 PM on July 2, 2019 [15 favorites]
One thing to remember is that your tenant will have to pay property taxes on this house.
posted by suelac at 5:16 PM on July 2, 2019 [1 favorite]
posted by suelac at 5:16 PM on July 2, 2019 [1 favorite]
I don’t think you can make her joint tenant without her knowledge.
However, when you talk to a lawyer, please don’t forget to consider not only your death, but the possibility of your developing dementia and someone becoming your guardian. If that happens and you don’t have protections in place, that person can make your renter’s life hell, possibly including selling the house, with no consideration of your intentions. Even if you make your renter joint tenant, she may still end up being sued for your share of the house. Ask me how I know.
posted by FencingGal at 6:10 PM on July 2, 2019 [4 favorites]
However, when you talk to a lawyer, please don’t forget to consider not only your death, but the possibility of your developing dementia and someone becoming your guardian. If that happens and you don’t have protections in place, that person can make your renter’s life hell, possibly including selling the house, with no consideration of your intentions. Even if you make your renter joint tenant, she may still end up being sued for your share of the house. Ask me how I know.
posted by FencingGal at 6:10 PM on July 2, 2019 [4 favorites]
Best answer: A will is one way to do it, but will require probate. Another way, if it is allowed in your state, is through a life estate deed, where ownership of the home is automatically transferred upon your death.
posted by amusebuche at 6:43 PM on July 2, 2019 [1 favorite]
posted by amusebuche at 6:43 PM on July 2, 2019 [1 favorite]
(California, land of Prop 13 checking in). You would do a great service to your renter if you would find out what their (approximate) tax base will be once the property changes ownership. Your goal is to make sure that the tax burden will not exceed the monthly rent.
Actually, ideally, the monthly expenses that should not exceed the current rent should include both the property taxes, insurance, and regular monthly upkeep. Not factoring in longterm costs like a new water heater, new roof, etc.
This is taking the extreme view that maybe your renter is on a fixed income. If they aren't, well, maybe it's not quite the concern I'm making it out to be; bottom line, you don't want your renter to have to dispose of your generous gift because they can't afford the ongoing costs.
You might subtly start talking with them about how to find a good vendor, when the X was replaced, etc, so they can start learning the history of the property, and so they can start to form a good basis of how to make decisions when you own a property. Alternate idea: You can create a 3-ring binder with relevant information and receipts. You can ask the renter to keep it at the property, or you can keep it but make it easy to find. You don't want your renter to be bewildered when a problem arises.
Btw, this internet stranger is touched by the thoughtfulness and generosity of your gift. Good on you.
posted by vignettist at 7:02 PM on July 2, 2019 [12 favorites]
Actually, ideally, the monthly expenses that should not exceed the current rent should include both the property taxes, insurance, and regular monthly upkeep. Not factoring in longterm costs like a new water heater, new roof, etc.
This is taking the extreme view that maybe your renter is on a fixed income. If they aren't, well, maybe it's not quite the concern I'm making it out to be; bottom line, you don't want your renter to have to dispose of your generous gift because they can't afford the ongoing costs.
You might subtly start talking with them about how to find a good vendor, when the X was replaced, etc, so they can start learning the history of the property, and so they can start to form a good basis of how to make decisions when you own a property. Alternate idea: You can create a 3-ring binder with relevant information and receipts. You can ask the renter to keep it at the property, or you can keep it but make it easy to find. You don't want your renter to be bewildered when a problem arises.
Btw, this internet stranger is touched by the thoughtfulness and generosity of your gift. Good on you.
posted by vignettist at 7:02 PM on July 2, 2019 [12 favorites]
Agree that this is a wonderful thing to do and that you should talk to your lawyer about how to include this in your will.
Feel free to ignore this, but if I were your renter I think I would like to know about your plans for the house, as it would affect my future plans - for instance, if you were to become ill, I might start looking into moving, since my tenancy in your house might not be secure. Just putting it here for what it's worth.
posted by altolinguistic at 3:10 AM on July 3, 2019 [8 favorites]
Feel free to ignore this, but if I were your renter I think I would like to know about your plans for the house, as it would affect my future plans - for instance, if you were to become ill, I might start looking into moving, since my tenancy in your house might not be secure. Just putting it here for what it's worth.
posted by altolinguistic at 3:10 AM on July 3, 2019 [8 favorites]
It seems to me that even if the actual TCO of the house exceeds the renter's financial ability, leaving them a significant asset is still a potentially life-changing boon. I mean, they could just sell it -- even at a below-market, gotta-sell level, it's a lot of money.
posted by uberchet at 7:08 AM on July 3, 2019 [1 favorite]
posted by uberchet at 7:08 AM on July 3, 2019 [1 favorite]
You need to talk to a lawyer and follow their instructions to get this right.
It is not always possible to bequeath your property to someone in a will. There are circumstances where a relative can cancel the will, skip probate, and just take the property after your death. For example, in Massachusetts a spouse has the right to do this.
I have personal experience with this. For complicated but valid reasons my sister wanted to leave her house to me rather than to her husband. After consulting with legal counsel she gave me the house before her death. It wasn't considered safe for her to leave it to me.
Details will vary from state to state and country to country. It's very possible to do what you want, but you need a lawyer to do it.
p.s. this is such an awesome thing you're doing. The world should be more like you.
posted by Winnie the Proust at 7:23 AM on July 3, 2019 [2 favorites]
It is not always possible to bequeath your property to someone in a will. There are circumstances where a relative can cancel the will, skip probate, and just take the property after your death. For example, in Massachusetts a spouse has the right to do this.
I have personal experience with this. For complicated but valid reasons my sister wanted to leave her house to me rather than to her husband. After consulting with legal counsel she gave me the house before her death. It wasn't considered safe for her to leave it to me.
Details will vary from state to state and country to country. It's very possible to do what you want, but you need a lawyer to do it.
p.s. this is such an awesome thing you're doing. The world should be more like you.
posted by Winnie the Proust at 7:23 AM on July 3, 2019 [2 favorites]
Make sure you do this soon, add her on as a joint tenant right away. The sooner the better, because of problems that come up if you end up on medicaid and unable to function.
Don't do this. It's your house, and you need the rental income going forwards. You may change your mind in the future. You don't want to be giving someone else rights to your property at this point. You may, for example need long term or home care later, and need to sell the property to afford it.
You'll want an estate lawyer. Use this opportunity to think more broadly about estate issues, and potentially a power of attorney. A good lawyer will first have a conversation with you about your goals, and then create an estate plan that maximizes your flexibility now, while directing your assets as you wish after you die.
This is a somewhat unusual thing to put into a will, and if there's someone else who might be expecting to inherit this property from you, you may want to tell them (the relative) your plans. If you have the conversation with Cousin Twelvehouses sooner than later, then they are less likely to challenge the will or think that there is some untoward relationship between you and the tenant.
There are some reasonable concerns above about the legal and financial costs to taking on the property for the tenant. If you have other assets, you can instruct your executor to use some of those funds to cover the costs of taking ownership. Alternatively, you can save for those by buying a life insurance policy for some estimate of the costs of this transfer.
Of course, the beneficiary may like renting because they don't have the burdens of ownership, and so perhaps they'll sell anyways. Maybe you want them to have this option, but if you don't, the property can be placed into a trust that gives the tenant rights to live there for a period, and then sell the home and give the funds to organizations that support, say, tenants rights or affordable housing. The downside is that such an arrangement can have high administrative costs.
posted by thenormshow at 10:35 AM on July 3, 2019
Don't do this. It's your house, and you need the rental income going forwards. You may change your mind in the future. You don't want to be giving someone else rights to your property at this point. You may, for example need long term or home care later, and need to sell the property to afford it.
You'll want an estate lawyer. Use this opportunity to think more broadly about estate issues, and potentially a power of attorney. A good lawyer will first have a conversation with you about your goals, and then create an estate plan that maximizes your flexibility now, while directing your assets as you wish after you die.
This is a somewhat unusual thing to put into a will, and if there's someone else who might be expecting to inherit this property from you, you may want to tell them (the relative) your plans. If you have the conversation with Cousin Twelvehouses sooner than later, then they are less likely to challenge the will or think that there is some untoward relationship between you and the tenant.
There are some reasonable concerns above about the legal and financial costs to taking on the property for the tenant. If you have other assets, you can instruct your executor to use some of those funds to cover the costs of taking ownership. Alternatively, you can save for those by buying a life insurance policy for some estimate of the costs of this transfer.
Of course, the beneficiary may like renting because they don't have the burdens of ownership, and so perhaps they'll sell anyways. Maybe you want them to have this option, but if you don't, the property can be placed into a trust that gives the tenant rights to live there for a period, and then sell the home and give the funds to organizations that support, say, tenants rights or affordable housing. The downside is that such an arrangement can have high administrative costs.
posted by thenormshow at 10:35 AM on July 3, 2019
Best answer: My Mom has done a Transfer on Death deed which is like the life estate deed. If your state allows this, it's nice since it skips probate and you can revoke it if needed. I downloaded the form from the local library's online resources. It was a little confusing to fill out since it needed the original lot number so I had to go to the plat office but we got it done. It cost $25 to file which is much cheaper than a lawyer.
posted by stray thoughts at 6:59 PM on July 3, 2019
posted by stray thoughts at 6:59 PM on July 3, 2019
This is the kind of thing that you write into your will ... because, unlike many forms of deed, you can change your will, and 20 years is a long time in which your rich family members might become impoverished, new family members could come along, or you simply might identify someone or something you believe to be a more worthy beneficiary.
Don't worry about the tenant's not wanting the house or the property taxes. S/he can disclaim the inheritance if s/he doesn't want to be a property owner, and if the taxes are going up at your death, the tenant would have to deal with them in any event through a rent rise.
posted by MattD at 7:18 AM on July 4, 2019
Don't worry about the tenant's not wanting the house or the property taxes. S/he can disclaim the inheritance if s/he doesn't want to be a property owner, and if the taxes are going up at your death, the tenant would have to deal with them in any event through a rent rise.
posted by MattD at 7:18 AM on July 4, 2019
This thread is closed to new comments.
posted by pinochiette at 4:07 PM on July 2, 2019 [19 favorites]