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Author: Salvee One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5741  
Subject: This doesn't make sense to me Date: 6/15/2012 7:12 AM
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My Dad is planning on selling his house, and his girlfriend selling her house. they plan on buying a condo together. they are also planning on putting extra money from the sale of the two houses in an account so if one of them dies the other has a account to use to continue to pay for the taxes maint. fee etc. He said when they both die the condo will be left to her daughter and myself. What doesn't make sense is that if my father dies I have to wait for a stranger to me (his girlfriend) to die before I receive what is my inheritance. This also stands the other way around too if the girlfriend dies the daughter has to sit and wait for my father to die before she gets her mothers share of the condo.

There has got be a more text book resolution to this situation isn't there?

Thanks in advance for any suggestions

Sal
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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5620 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 9:34 AM
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Unless there's a trust or something, whoever dies second can do whatever they want after the first one dies.

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5621 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 11:46 AM
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Unless there's a trust or something, whoever dies second can do whatever they want after the first one dies.
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That's true IF they own the home (and funds in the related account) as joint tenants. If, however, the property and the designated account are titled as tenants-in-common, the interest of the first to die will be included in his/her probate estate, and pass under the terms of his/her will. OR maybe one or both of them titled his/her 1/2 interest in the name of his/her revocable trust. I've seen that done, too.

In the situtation as described, I would agree that the use of a trust is the preferred way to go, as the trust instrument would do best at spelling out the rights of all the various parties concerned - the two partners and their respective children.

Bill

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5622 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 11:51 AM
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My Dad is planning on selling his house, and his girlfriend selling her house. they plan on buying a condo together. they are also planning on putting extra money from the sale of the two houses in an account so if one of them dies the other has a account to use to continue to pay for the taxes maint. fee etc. He said when they both die the condo will be left to her daughter and myself. What doesn't make sense is that if my father dies I have to wait for a stranger to me (his girlfriend) to die before I receive what is my inheritance. This also stands the other way around too if the girlfriend dies the daughter has to sit and wait for my father to die before she gets her mothers share of the condo.

There has got be a more text book resolution to this situation isn't there?

============================================
Sure - and it sounds like they've found a good one, that reflects their intentions.

It sounds like they're using a trust to be funded by the sale of their existing homes, to buy the replacement home, with the excess funds to be kept in trust for the maintenance of the home, and available for the support of the survivor. There's nothing mysterious or unfair about this; they're doing this for their mutual benefit, and want to make sure that the funds they committed to it will benefit both of them for their lifetimes.

Bill

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5623 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 12:14 PM
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It sounds like they're using a trust to be funded by the sale of their existing homes, to buy the replacement home, with the excess funds to be kept in trust for the maintenance of the home, and available for the support of the survivor. There's nothing mysterious or unfair about this; they're doing this for their mutual benefit, and want to make sure that the funds they committed to it will benefit both of them for their lifetimes.

Interesting because I actually read it as not so hot DIY estate planning ;)

There are two concerns I saw - it didn't say trust and there are issues for non-married couples that need to be specifically addressed. Tenants in common - yikes for the heir of the first deceased.

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5624 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 12:31 PM
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(rad:)Interesting because I actually read it as not so hot DIY estate planning ;)

There are two concerns I saw - it didn't say trust and there are issues for non-married couples that need to be specifically addressed.


No, it didn't specifically say there was a trust, and maybe it's all still on the drawing board, so to speak, as it sounds from the OP like the home sales are pending.

But I scratched my head, trying to think what other device would do just what the OP described, and I thought that was probably the best way.

Tenants in common - yikes for the heir of the first deceased.

I agree.

Bill

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5625 of 5741
Subject: Re: This doesn't make sense to me Date: 6/15/2012 12:52 PM
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Wradical:

(rad:) Interesting because I actually read it as not so hot DIY estate planning

There are two concerns I saw - it didn't say trust and there are issues for non-married couples that need to be specifically addressed.

"No, it didn't specifically say there was a trust, and maybe it's all still on the drawing board, so to speak, as it sounds from the OP like the home sales are pending.

But I scratched my head, trying to think what other device would do just what the OP described, and I thought that was probably the best way."


Several observations:

It is father's money and OP is not entitled to an inheritance, so OP's anxiety - "What doesn't make sense is that if my father dies I have to wait for a stranger to me (his girlfriend) to die before I receive what is my inheritance." seems misplaced to me. Father's girlfriend is not a stranger to father and father could choose to leave her the entire estate; or he could marry her, and then she would be OP's stepmother and not a stranger to OP (and fatehr could still leave her the entire estate).

Second, without reference to a trust, I also read DIY estate planning that likely leaves the blood relative(s) of the first to die, SOL.

Holding title as tenants in common probably does not accomplish father's and girlfriend's wishes either. The heir of the first to die could probably request partition and force a division of the cash and a sale of the property.

In addition, except for not getting married, this sounds to me like the text book resolution for a blended family situation, contrary to what OP first wrote.

Depending upon the monetary values we are discussing, there may be potential estate tax issues lurking because there is an unlimited marital deduction (generally speaking, assuming both spouses are US citizens), but girlfriend is not "wife" for purposes of the unlimited marital deduction.

Regards, JAFO
(concerned that OP may not be too happy with my response)

Disclaimer

Yes, I am a lawyer, BUT THIS IS NOT LEGAL ADVICE; it is only general information. NO CLIENT RELATIONSHIP IS INTENDED TO BE CREATED, NOR IS ANY SUCH RELATIONSHIP SO CREATED. FOR SPECIFIC LEGAL ADVICE YOU SHOULD TALK TO A LAWYER IN YOUR AREA.

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