Does entering into a life estate agreement change ownership of the property?
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Does entering into a life estate agreement change ownership of the property?
My hubby and I entered into a life estate agreement with my mom because she wanted peace of mind in knowing that she could live here if something were to happen to my hubby and me. The county now says she own the house. Is this so? If so, will we have to pay a gift tax on our house when she dies. Her name is not on the deed or the mortgage. How do we undo this if we need to?
Asked on December 19, 2011 under Real Estate Law, South Carolina
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you simply entered into a written agreement with your mother allowing her to live in the house that you and your husband own where she is not on title to the property, she does not own it. She has a contractual agreement with you to stay in it for the duration of her natural life.
Since she is not in title to the property, you will not have to pay a gift tax. I suggest that you write a letter to the county tax assessor setting forth the true state of facts and keep a copy of the letter for future need. If the county tax assessor continues to claim that your mother owns the property, you might consider consulting with a real estate attorney about the situation.
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