My second husband would like to inherit part of my home as he pays half the mortgage. I want 100% to go to my children. Who’s right?

Dear Quentin,

I’ve been married for five years to my second husband. We are living in the house that I bought over 20 years ago that is in my name only, as is the mortgage.

He pays me a little less than half the amount of my mortgage, and we split other bills, with me paying a little more on utilities. I also pay for all upkeep and improvements to the house, although he does some of the labor.

I have an adult child and grandchild, and he has adult children as well. I would like to leave my house to my child, but would allow my husband to continue to live there as long as he’d like, or until his death. The mortgage would be paid off out of my estate.

Who should cover taxes and homeowner insurance each year? I’m leaning towards specifying that my husband cover that, and also leaving funds for upkeep such as a new roof or air conditioning.

My husband and I disagree on whether he should inherit part of the house. He feels he’s paying part of the mortgage. I don’t want a portion of the house to go to his children when he dies, or for my child to have to buy them out.

What is the best way to do this equitably?

House Quandary 

Dear Quandary,

Your husband came into your life late in the day. You’ve been married five years. You bought your home 20 years ago, long before you met your husband, and you have worked hard to pay it off. After five years of marriage, giving him a life estate in your home so he lives there rent-free, in the event that you predecease him, is generous.

Your husband agreed to pay you an amount that is equivalent to 50% of the value of the mortgage, but he is not actually paying half your mortgage — for better or for worse, for richer for poorer, he is paying rent. As harsh as this sounds, it’s his responsibility to buy a home for himself to have as an inheritance for his children.

If your husband is living in the home, it’s absolutely fair that he should pay for the upkeep of the property, homeowners insurance, and property taxes, and other costs, especially given that your estate would pay off the mortgage. Every last detail should be ironed out by an estate planning and trust attorney.

“The life estate avoids probate because the real estate goes directly to the children upon the death of the life tenant,” according to the Winston Law Group. “The life estate can also protect the home from a Medicaid lien upon death, although there is a five-year transfer penalty period imposed for nursing home level Medicaid.”

There are cons too. Ross & Shoalmire writes: “If the life tenant doesn’t care for the house and it falls into disrepair, there is not much the beneficiary can do to protect their future investment. If the life tenant becomes incapacitated and needs a nursing home, the house will not pass on to the heirs until they die.”

No solution is perfect. For instance, your children, if they needed cash after you passed away, would have to wait to inherit the property until your husband dies. But a life estate, assuming you put this in place in the months ahead, provides your husband with a roof over his head for the rest of his life.

That’s not a bad deal after five years of marriage.

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