inheriting my mother’s home with my two brothers can I move onto the house

Dear Len & Rosie,

I’m inheriting my mother’s home with my two brothers in equal shares. The home is vacant. Am I allowed to move into the home? Do I have to pay rent? Can the home be sold against my wishes by the executor? The will says that the executor can sell the home.

Robert

Dear Robert,

Right now the home is still part of your mother’s probate estate. You do not yet hold title to it, so for now you do not have the legal right to reside there, unless you rent the home from the estate. The executor will need to change you fair market value rent, unless your brothers agree to less. After all, free rent would be coming out of their inheritance.

The executor was likely granted “full authority” by the court, which is usually the case. If so, the executor may sell the home without a court order, provided that the beneficiaries agree to the sale. If a sale is pending, the executor’s attorney will send you a “Notice of Proposed Action” with a copy of the sale contract attached. If you and the others consent to the terms of the sale, then the sale will proceed. If you don’t, the executor can file a court petition to approve of the sale without the consent of the beneficiaries.

If the home is not sold in probate, then, you and your brothers will each own one-third. You will have the right to occupy the home, rent free, but so will they. They may not like the idea of you tying up their inheritance, especially as the equity in the home is likely to comprise most of their inheritance.

Each joint owner of land has a “right to partition.” If any one of you wants to sell, and the others aren’t willing to buy him out, then the court can order the sale of the property in a partition action. These lawsuits are almost always successful.

What does this mean? In the long run, if they want to sell and you don’t, you are going to lose. Each of you are likely in a different financial situation with individual needs and resources. If your brothers are sending their children to college, they are more likely to want the home sold.

The only way this is going to work is if you make a deal that is satisfactory to all three of you. Just remember that if you can’t come to an agreement, you need to see the writing on the wall and accept the fact that you are not going to be able to live there. You could stall for as much as you can, but you’ll lose, and the animosity created within your family could last for the rest of your lives.

Len & Rosie

Can I deposit the money into Special Needs Trust without a penalty for SSI

Dear Len & Rosie,

My daughter, age 22, is disabled and on SSI. She received a $10,000 check - an inheritance from her grandmother’s trust. Can I deposit the money into her Special Needs Trust without incurring a transfer penalty for SSI.

Sue

Dear Sue,

The answer to your question is that it depends. There are two kinds of Special Needs Trusts. There are Third Party SNT's created by someone on behalf of a disabled person to prevent an inheritance from costing a loss of benefits. If this is the type of SNT your daughter has, you may be able to get the trustee to reissue the check to the trustee of the SNT. If that’s not possible, you can’t deposit the check into the SNT without incurring a transfer penalty.

If your daughter has a First Party SNT that was created with her own money, such as medical malpractice or personal injury settlement, then you can deposit the check into that trust. It’s designed to comply with federal regulations created under 42 U.S.C. §1396p(d)(4)(A) that allows the transfer to avoid a transfer penalty for SSI benefits. If such a trust does not exist, then your daughter, or a parent or grandparent may create one for her. The downside is that this sort of SNT must pay back Medi-Cal after your daughter’s death.

If she hasn’t got a First Party SNT already, it’s probably too expensive to create one to shelter a $10,000 inheritance. Fortunately, there’s an alternative. The Achieving a Better Life Experience (ABLE) Act of 2014, allows for the creation of ABLE Accounts for persons who became disabled prior to age 26. With an ABLE Account, your daughter may deposit up to $15,000 a year from an inheritance or gift, or even money she saves up. The maximum balance of ABLE Accounts is $100,000. ABLE Accounts and the interest and dividends earned by them are also tax free.

The downside, if there is one, is that the money in an ABLE Account must be spent on expenses related to your daughter’s disability, such as assistive technology, such as a van with a wheelchair lift if one is suitable.

If you are interested in reading about ABLE Accounts, visit www.calable.ca.gov If you are unsure as to what type of SNT your daughter has, review the trust with a trust and estates attorney.

Len & Rosie