My mother has a life estate with remainder interests going to myself and 2 siblings. We are joint tenants with the right of survivorship. My 2 siblings want to have me "buy them out". Can we?

Pam (Guest) on Wednesday, January 16 2013, 12:02 PM
Mother is now on Mass health and my understanding is that the state of MA has no claims to the house while mother is alive. We would like to move into the house and live there till mother passes, and then the house would belong to my husband and I (seeing we have given my siblings their "share" already. Is this possible and legal and complicated? Also, would my mothers will have to be changed which presently says that it gives "all my real estate, personal and or mixed" to the three kids.
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    Replied by Attorney Kenneth Simmons on Tuesday, January 29 2013, 08:47 AM · Hide · #1
    You have a few different issues wrapped into your question, so let me try to address each point. On buying out your siblings, this is certainly possible to do now, while your mom is living, however there are some complications with doing this. First off, you will have an issue obtaining “traditional” financing through a lender due to how the deed is structured with the life estate. These kind of buy-outs typically only work if you are able to use your own funds to complete the buy-out (i.e. a cash purchase). As a second issue, you may have difficulty in determining an appropriate value for their share given that your mom still has an interest in the property (do you pay them two-thirds of the full fair market value or is it reduced to account for your mom’s interest). I think we will need to explore this issue in more detail by discussing your mom’s Masshealth situation and examining the risks you have of buying out your siblings for the full fair market value prior to your mom’s death.

    In terms of your mother’s Will, although advisable to update her Will, it is not legally necessary just because you buy out your siblings. The life estate structure on the deed allows the real estate to pass to you, as the remainderman, without having to go through Probate. In other words, the Will does not control the real estate in this situation. It will go to you regardless of the terms of the Will.

    On a final note, you mention in your question that the State has no claim to the property while your mom is alive. This is not true. The Commonwealth will in fact place a lien on the home (if they have not already done so) to protect its interest. If the home were sold while your mom is living, the Commonwealth is reimbursed from the sales proceeds. If the home is not sold until after death, then the lien is released and the full value of the property is protected. This point ties back into some of my concerns in paying full fair market value for the buy-out.
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