To LLC or not to LLC??

Question

Hello there everyone in biggerpockets,

Now lets see I need a little advice on what I should do over the next few weeks about a current situation that was brought to my attention! It is a family matter and it needs to be taken care of and out of everyone in my family I seem to be the one that's going to make the most informative conclusion! My grandmother is getting to the point where she is not going to be able to make both her house payment nor the property taxes to keep her home! Now I was wondering if I take care of the current loan on the house and assume her taxes what would be the best route to take? Should I assume the house and keep paying the property taxes under my name or should I assign it to an LLC?

If I can get some input I would really apperciate it, thank you all for your time and have a wonderful biggerpockets day!!

Real Estate Investing is a :shoot: I love Pat Benatar!!

Calixto Urdiales · Answer

Thanks for your reply John I will take a look at my e-mail!!

Account Closed · Answer

Calixto,

Sent you an email to your PM. Check your email.

As to taking title.

There is no real reason to take title. You just need to stabilize the situation.

The title issue is more related to estate planning. How much does your grandmother have, etc. If she was to need care then in some states it is legal for the state to force a sale of the property so that her care costs can be covered. If the house was owned by someone else and she was renting or had a live estate then the state can not make a claim (more or less - check the state laws).

There is also possible tax issues. When she dies the heirs will have to pay tax if the estate is above a specific value. More correctly the estate pays the tax. That is why some estate planning programs have people transfer the property to a trust and then some of the value is divided up. A new or expanding list of beneficial owners. The lady continues to control the home and live there but the value and the appreciation is not fully part of her estate.

The simplest solution is to write a check and pay the bills. The best solution will need to address the bigger picture and mostly called estate planning.

John Corey

Calixto Urdiales · Answer

thanks John,

But the fact of the matter is that I do not expect to be reimbursed for the exspense I plan to pay! And I plan to pay off any and all current liens that exsist on the property itself. The reason being that I plan to do this is plain and simple: My grandfather worked all his life to pay off that house and one of my moms brothers came in and convinced my gandma to get him a loan and he never made good on it. Now my grandmother is going to loose the house unless I step up and do something. In short I don't want to sell that house it's my grandfathers house and it all ways will be. All family members came to an agreement that if I decided not to sell the house then none of them would have anything say about it. Now I am stuck with how I should hold title and what exactly it is that would be the best route for me to take. Sorry if I wasn't clear when I first asked what I should do but I do hope this response helps out a bit! Thank you all for your time and have a wonderful biggerpockets morning!

P.S. Thank for the response John it's all ways a pleasure to hear what you have to say!!

:superman:

Account Closed · Answer

loki005,

1. Pay the property taxes and call it a gift to a family member each year.

2. Buy the house and give her a life estate in the property.

3. Have her set up a new loan where you are the lender and set the terms so that she can afford the payments. You can do an equity split with the loan.

4. Donate money to a local religious group with the stipulation that they make her payments and that they do not identify where the money has come from.

There are all kinds of ideas. You did not put any restrictions on the ideas.

Note that you claimed that you recently diid a big deal and will be getting perpetual checks. Should we be assuming you are flush with cash and want to take care of a family member? If you lack the money why get involved?

In one state I know of an older person can have the state pay the property taxes. The bill has to be paid when they finally sell. In the mean time the state just waits (21 years in one example).

John Corey

Scott Ficek · Answer

I have not been in this situation, but I have friends that have.  I have a couple things you should think about (and maybe respond with answers about):
[list]What do you get in return for making those house payments and tax payments?
What do the other members of the family suggest?
Can she sell the house and use the equity to rent or move into a retirement home?[/list:u]
I think you need to get in front of an attorney and get all the pieces ironed out on a document that all family members sign.  These situations are how family fights break out.  For example:  if you pay the mortgage payments for 5 years and then sell the house, will the other family members be OK with you being reimbursed for the money you paid?  Are you expecting to get the house in return for these payments?

Better to get this all ironed out in advance before someone gets their feathers ruffled!