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Dear Quentin,
My father in Arizona has been a very successful businessman throughout his life and has amassed quite a bit of wealth.
His home is currently written into a trust that will allow his long-time, live-in girlfriend, 20 years his junior, to live in the house all expenses paid until her death, while ownership still remains with my brother and me.
Recently, she has begun to make it clear that she wishes to receive the house, currently valued at just over $1 million, in his will.
I can tell my dad is being cautious about this transaction, but he wants to appease her. Obviously, the fear is that once she assumes ownership, all other family will be without hope when it comes to staking any claim on the home.
Is there a way to “give” her the house and then do a transfer-on-death of sorts so that it comes back to my brother and I once she passes?
What’s the best way to handle this — and protect everyone involved?
Guarded Daughter in Nebraska
Dear Guarded Daughter,
Your father is obviously entitled to leave his home to whomever he wishes. Common-law marriages are not recognized in Nebraska, so if your father died without a will, she would be left high and dry. That’s why it’s always advisable to have your own money and be financially independent, regardless of whether your partner is 20 years older or 20 years younger.
What your father should not do is make a decision under pressure. Have an open and honest conversation with him about his joys and concerns. You don’t define “long-term.” Is that five years or 10 years? Regardless, his current plans seem fair. His $1 million home will be divided among his two children when his girlfriend passes away, but that is assuming she predeceases you and your sibling.
But don’t bank on people promising to do X or Y after-the-fact. This column is littered with letters outlining broken promises. A transfer-on-death deed means the house becomes the property of your father’s girlfriend after your father’s passing. It works in the same way as a beneficiary on a bank account or insurance policy. It also avoids probate — the public accounting of your father’s assets and liabilities.
It is an alternative to putting her on the deed today. This way, your father maintains responsibility for and ownership of the property during his lifetime. But make no mistake: it is irreversible. Once such a document is signed, the house would pass to his girlfriend the moment (or thereabouts) when he passes. She will be sell it and move to Europe, if that is what she wants to do.
What’s more, if your father signed a transfer-on-death deed and failed to change his last will and testament, the transfer-on-death deed would trump the will. Your father would also require the same mental capacity necessary to sign a will, two disinterested witnesses to attest to his signature and a notary public to acknowledge these signatures, according to Bairdholm Attorneys at Law.
You should talk to your father. And your father should talk to a lawyer.
Ultimately, the final decisions belongs to him.
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