Life Tenant Gave Gift Money then Moved Out and Wants Gift Money Returned

[SCLE2010]

My question involves real estate located in the State of South Carolina. My mother gave us a monetary gift at the closing of a construction to permanent loan. We used that gift as partial funds for building the house which is now our permanent residence. At the closing (or during the loan application process) she signed a gift letter, required by the bank, stating that the money was a gift and she did not ever expect repayment under any condition, or words to that effect. In exchange for the monetary gift we granted her a life estate to be able to live in our new home with us for the remainder of her life; we did NOT sell her a life estate and there was no form of written agreement between us. After a couple of years she consciously made the decision to move out and purchase her own home; we assume it was due to the fact that she was having a very hard time adapting to living together. She has now hired an attorney in an attempt to get the gift money returned to her. I honestly do not feel she has a case due to the strict terms of the signed gift letter and the lack of a written agreement between us. Our questions/concerns are; What are her rights? What are our rights? Can she sell/rent her life estate to some creep with the sole intent to make our lives miserable? Can she attempt to evict us from our primary residence? Can we get her life estate removed for any reason? Any advice on what we should do, or what we should be aware, would be appreciated. Thank you.

[jk]

what did you give her in the life estate. Depending on how it was constructed, you could actually be her tenant or, depending on how it was written, merely a co-tenant.

In either situation, she could rent or sell her interest.

If you were her tenant, she could evict you. If a co-tenant, she couldn't.

terminating the life estate; difficult, at best.

does she have a rat's but chance of winning the claim for the return of the gift; no

does she have a chance to make you wish you never accepted the gift; a given.

Any advice on what we should do,

Offer to buy her life tenancy which, strangely enough, I would bet would be worth just about the same amount as the gift she presented you with previously.

If you can do that, it might be the best solution. If not, then it sounds like you have a tough row to hoe in getting the resolved.

[SCLE2010]

Thank you for the response. I dont have the means to offer to buy her out of the life estate (or return her gift) and the she is welcome to move back in anytime she wants, but there will certainly be a legal battle if/when someone pulls up with a moving van and tries to move in because they have purchased, or are renting, her life estate.

The "Title To Real Estate" states: My name and my wifes name, their heirs and assigns, and a life estate interest only, in and to my moms name, for and during her natural life...

Does this statement tell if Im her tenant or co-tenant? Also, as a life estate holder she is responsible for upkeep and paying the real estate taxes but she has never done that because the taxes get taken directly out of my mortgage payment. Seeing how she walked away are there any other grounds I could try to get the life estate revoked?

I'm not trying to be a creep, and do not mean her any harm, I'm just trying to cover myself (and my family) from having a stranger move into our home. Even if the life estate was revoked I would always allow her to live here.

[justtoonice]

(Only) she has the right to use, occupy, or collect revenue from the property during her lifetime. You are her tenant. She has the right to rent out or sell her interest.

I am not an attorney, but the way I read this situation, you would lose the legal battle if that moving van showed up.

[SCLE2010]

How can I be her tenant, and thereby be evicted, if the deed and the mortgage are in my name? The way a local attorney explained it to me is that the life estate is basically an attachment to the deed, and not the deed itself, and that I am the owner of the home.

As far as the moving van and legal battle goes, I will take my chances in front of a judge and let all the details of our situation come out into the open.

[justtoonice]

How can I be her tenant, and thereby be evicted, if the deed and the mortgage are in my name? The way a local attorney explained it to me is that the life estate is basically an attachment to the deed, and not the deed itself, and that I am the owner of the home.

Because, as the (sole) holder of a life estate, only she has the right to use, occupy, or collect revenue from the property during her lifetime, or sell her interest in the same.

At her death, you and your wife, as the "remaindermen", then have all those rights to the property.

As she is the holder of the life estate, she can say whether or not to allow you to be on the property to which she has rights as long as she is alive. Since she is allowing you to use this property as your residence, you are her tenant.

edit to add: A life estate is typically used for estate planning purposes. It is a way to pass on property to heirs without going through probate.

[SCLE2010]

Ok... I can see your point, but where are you getting this South Carolina specific information? Is there a website out there that explains life estates in SC? What about my question of "Also, as a life estate holder she is responsible for upkeep and paying the real estate taxes but she has never done that because the taxes get taken directly out of my mortgage payment. Seeing how she walked away are there any other grounds I could try to get the life estate revoked? She has walked away from the house and has never paid a penny for maintenance or taxes so there must be some weight in that. I have paid the taxes through my mortgage payments. Thanks.

[Mr. Knowitall]

First, I don't expect that you would succeed in trying to claim money from the life tenant when, pretty clearly, the financial arrangement was part of your overall understanding about how things would work. Second, if I were the life tenant and you tried that, I would evict you. The life tenant doesn't have to occupy the premises for her life estate to remain in effect.

If you want to try to find a site that details the respective rights of life tenants and remaindermen in your state, Google is your friend. You can try searching for case law in Google Scholar.

[justtoonice]

In exchange for the monetary gift we granted her a life estate to be able to live in our new home with us for the remainder of her life; we did NOT sell her a life estate and there was no form of written agreement between us.

A written or oral declaration given in exchange for something of value that binds the maker to do, or forbear from, a certain specific act and gives to the person to whom the declaration is made the right to expect and enforce performance or forbearance. An undertaking that something will or will not occur. It is a manifestation of intent to act, or refrain from acting, in a certain manner.

Promise : Legal Dictionary

[SCLE2010]

Thank you for the Google Scholar information. I need to clarify this as I didnt accurately explain myself in the original description of our situation; we did not grant her a life estate in exchange for the monetary gift. She wanted to give us the gift because she wanted to live with us in our new home. My wife and I decided, in good faith, that we would grant her a life estate as somewhat of a "protection/peace of mind" for her so that we would not go out and sell the house at some point in time and kick her out on the street...... it was the right, and honorable, thing to do. Granting her a life estate was never an agreement (verbal or written) between my mother and us.

If she is the life estate holder and is responsible for paying taxes but has never done payed them, I cant see how that could not an issue. As far as her evicting us from our home goes, I would hope she wouldn't stoop that low, but I certainly would not be surprised. If we were to be evicted I can say with a fair amount of certainty that I would not pay the mortgage on a house I am not living in (regardless of what it did to my credit), and she would have one heck of a time finding anyone to rent the house for anywhere close to what the mortgage payment is.