What are responsibilities of remaindermen in a Life Lease?

[LaughingGal]

Jurisdiction

Michigan

Our step-dad has a life lease on our mothers home and we are on the deed.
My understanding when I contacted the lawyer that drew up her will after she passed away is that step-dad would be responsible for taxes, insurance, maintenance and upkeep of everything.
My sisters and I agreed we would go in 50% for anything that would be an expensive purchase such as hot water heater, furnace, etc. He is needing a new furnace but does not think he needs to pay 50% . Please clarify to us the rules regarding "Life Lease" in Michgan. Thank you.

 

[army judge]

Our step-dad has a life lease on our mothers home and we are on the deed.
My understanding when I contacted the lawyer that drew up her will after she passed away is that step-dad would be responsible for taxes, insurance, maintenance and upkeep of everything.
My sisters and I agreed we would go in 50% for anything that would be an expensive purchase such as hot water heater, furnace, etc. He is needing a new furnace but does not think he needs to pay 50% . Please clarify to us the rules regarding "Life Lease" in Michgan. Thank you.

You've pretty much laid out the law, surrounding a life estate.

I don't know why it's being termed a life lease.

Life Leases: What In The World Are They? – Dividend Money

Whatever it's called, the property often is neglected, because some beneficiaries don't fully honor their end of the bargain.

As remaindermen, it's in your best interests to step in where the life estate holder fails to honor her/his end of the bargain.

If you don't, you'll be inheriting a dilapidated shack, rather than a lovely home.

 

[LaughingGal]

You've pretty much laid out the law, surrounding a life estate.

I don't know why it's being termed a life lease.

Life Leases: What In The World Are They? – Dividend Money

Whatever it's called, the property often is neglected, because some beneficiaries don't fully honor their end of the bargain.

As remaindermen, it's in your best interests to step in where the life estate holder fails to honor her/his end of the bargain.

If you don't, you'll be inheriting a dilapidated shack, rather than a lovely home.

I just pulled out her will and it does state "Life Estate". "He shall be responsible for all normal maintenance, taxes and insurance while he resides there. " Is a new furnace included in this? We are willing to pay half. I forgot to mention that the house is paid off.

 

[army judge]

I just pulled out her will and it does state "Life Estate". "He shall be responsible for all normal maintenance, taxes and insurance while he resides there. " Is a new furnace included in this? We are willing to pay half. I forgot to mention that the house is paid off.

As I said, whatever its called doesn't matter.

If he fails to pay, it's in your best interests to shell out the dough.

There's very little that the law can do to him for failing to keep the property in a state of good repair.

Statistically, he'll die long before either of the remaindermen.

I suggest you consult further with your attorney.

 

[army judge]

@LaughingGal

Life estates or life leases were created about 1095 on that little island nation that speaks the language most of us speak today. LOL

A life estate beneficiary can do nothing, and that won't financially impact him or her.

The financial impact will be felt by the remaindermen.

Those people wish to inherit and use, or sell the property in the future.

That's why life estates aren't wise to those outliving the life estate holder.

If taxes aren't paid, you'll have to pay them to one day own the property on fee simple.

There are better ways to care for the surviving spouse without penalizing other heirs.

Frankly, the donor might have done better by having the home sold and profits dispersed amongst the heirs.

Alas, such was not her wish.

My best to you and your sister, as you traverse this troublesome legal morass.

This article might help you better understand why life estates or life leases are incredibly bad ideas.

Life Estates In 5 Minutes - MasonLaw, PC | NC Elder & Special Needs Law Attorney

 

[zddoodah]

we are on the deed.

Please explain exactly what this means (including who "we" are).

I contacted the lawyer that drew up her will after she passed away

A will drawn up "after she passed away" would not be valid.

He is needing a new furnace but does not think he needs to pay 50% .

He's right. If he needs/wants a new furnace, he'll need to pay 100% of the cost. If you're willing to give him 50% of the cost, that's great but not legally required.

Please clarify to us the rules regarding "Life Lease" in Michgan.

Any sort of thorough discussion of the subject would be well beyond the scope of a message board and could be better addressed by a google search.

"He shall be responsible for all normal maintenance, taxes and insurance while he resides there. " Is a new furnace included in this?

What are you quoting from here? From the will that was drawn up after she died?

Note that a remainderman can sue a life tenant for waste, but that would probably cost more than a new furnace.

 

[LaughingGal]

"We/us" are my 2 sisters and I.
The will was drawn up before she died. I contacted the lawyer after she died to get clarification of "life estate". The other quote is from the will.
I wouldn't have posted on here if I could have found the information from a "Google" search.
The first quote we have received for a new furnace is over $8000.00.

 

[army judge]

The first quote we have received for a new furnace is over $8000.00.

That is probably a steal for central heating/cooling these days.

It certainly would be a fair quote heating alone.

Here is the point I was trying to make.

If you do nothing, the home will probably deteriorate over time.

You can, as my colleague Zdoodah said, pay for the repair and sue the life estate holder.

However, he may not have the money to cover even $4,000, assuming you wish to split the cost.

You can pursue a judgment, you'll probably prevail.

If he's retired, most (if not all) of his income is sheltered, making him a judgment proof debtor/defendant.

He holds a life estate, which make sit all but impossible to get him out.

Some people offer the life estate holder cash to buy the life estate.

Yet, the life estate holder can simply say, "No thanks, I like it here."

Let's say he stops paying the taxes, ignores the general upkeep, and pays enough to keep the lights on and water flowing.

That, ma'am is the biggest problem with life estates.

There are remedies, very often the remedies are useless.

My original suggestion, if you wish to inherit a valuable (as in salable) property one day, the remaindermen get stuck with footing a larger share of the expenses.

If the testator wishes to provide a home for someone, a life estate is a good vehicle to do that.

The testator should also be advised to provide a fund to make sure the taxes are paid, and property is kept in a good state of repair.

I hope you get this sorted.

Why not see if the life estate holder will discuss long term plans with you, insofar as who will pay what and in what share.