Does Family Estate Stay Within Blood Lines

[boozapian]

My question involves estate proceedings in the state of: CT

My grandfather owned property in CT at the time of his death, and he gave this property to his 5 children, who live in FL. There are long term leases on this property, and one of the children holds sub-leases (also assigned by my grandfather), so the property is not being sold. Instead, the siblings receive rent. As the siblings became deceased, the income from the estate has either passed on to their children, or to their spouse and then their children (thus ultimately keeping it in bloodlines).

My question is this- if one of the siblings has 2 biological children, but also has a spouse with whom he has no biological children, does the property (and income) from my grandfather's estate pass on to the siblings' spouse, and after her death, it then goes to his biological children, so that it remains in blood lines?

Thank you.

[harrylime]

When the property was transferred to the children, in what type of ownership was it held? As tenants in common? As joint tenants with right of survivorship?

My question is this- if one of the siblings has 2 biological children, but also has a spouse with whom he has no biological children, does the property (and income) from my grandfather's estate pass on to the siblings' spouse, and after her death, it then goes to his biological children, so that it remains in blood lines?

Assuming that a deceased child could dispose of their interest at death (that is, the children did not own the property as joint tenants with right of survivorship), what happens to a deceased child's ownership interest depends upon that child's will. Or, if there is no will, the intestate succession statutes of the state in which the deceased child resided. As you can see, there is no certainty that ownership would remain solely with grandfather's descendants.

[boozapian]

Sorry for the delay, my mom has been trying to find documentation but can't. What document exactly would tell me in what type of ownership the properties are held? Would it be his will or the the leases on the properties...? I'm going to try to ask my cousin (who is now the executor) for a copy of the document.

I do know one thing for certain though, for the children who have passed, if they had no spouse, their share of the properties went to their biological children. So, my mom is certain that her share will go to her 3 children. This is where she gets concerned. After her 3 children are deceased, she does not want the rental income or ownership of the properties to go to any of their spouses, she wants it to then go to her granddaughter (she only has one).

Thank you for your help!

[Mr. Knowitall]

You can determine the relevance of various documents by examining them - reading them and seeing what they say.

[harrylime]

The deed is what is important.

I'm going to try to ask my cousin (who is now the executor) for a copy of the document.

Is this property in a trust? Your first post implied that grandfather had passed away a fair amount of time ago and that the property passed directly to the ownership of his children. (Or maybe I was reading too much into it.) If the property was passed by way of grandfather's will and a probate proceeding, one would expect that there would not now be an "executor." Do you perhaps mean that your cousin is now the trustee of a trust that holds the property? And that your mother is a beneficiary of the trust, rather than an outright owner of a share of the property?

This is an important distinction If it is a trust, then the trust document would determine what happens.

[Mr. Knowitall]

The title history should clear up whether or not the property is held in trust. If not, we have some confusion about whether and how shares were conveyed (or should have been conveyed) to the second generation of heirs. If so, the trust is a very important document to examine as it will indicate how proceeds are to be distributed, whether and when upon the death of a grandchild that grandchild's heir would be entitled to the rent proceeds.... We may start running into perpetuities issues. If by "their share of the properties went to their biological children" we are to read that there is (or is supposed to be) a conveyance by deed, perhaps in order to avoid the aforementioned perpetuity issues, and the shares are supposed to vest in the grandchildren - we still don't know what, if anything, has been done by our (theoretical) trustee to give effect to any such provision in the (assumed) trust.

So yes, let's start with the title.

[boozapian]

I definitely know it is not held in trust. The property did pass along to his children, and one of the children was given the leases on the property, and the rest of the children held the sub-leases. So the first child leases the property directly to the retailers (Wendys & Popeyes), and then that child has to pay rent to the rest of his siblings. The child that was given the leases, who then subleases it and then pays the rest of the children rent, died. His son then became executor (for his father), so he is the one who sends the rest of the children the rental checks along with a certain percentage of the net income. Anyway, they call him the executor because he is the one who handles all the dispursement checks. She is definitely an outright owner as a couple of the siblings have chosen to sell their share in one or more of the properties.

[Mr. Knowitall]

The real estate is held in some fashion - probably as a joint tenancy. Find the deed, tell us who owns the real estate and in exactly what capacity, and what (if any) reference is made to rights of survivorship.

[boozapian]

Would the deeds for the various properties be a matter of public record?

[harrylime]

Would the deeds for the various properties be a matter of public record?

Yes, they should be.

Let's make some assumptions:

If the properties are held jointly with right of survivorship, then, when one owner dies, that deceased owner's share transfers automatically to the surviving owner(s). So, your mother might end up owning all the properties if she is the last of grandfather's children to die. Or she could end up with nothing to pass along to her descendants if she isn't the last of grandfather's children to die. (Unless she takes some action to break the joint tenancy and convert it to a tenancy in common.)

But, if I were a betting man, I'd put my money on the properties being owned as tenants in common. Which means that your mother has an interest that she can dispose of in her own testamentary interest.

So, my mom is certain that her share will go to her 3 children. This is where she gets concerned. After her 3 children are deceased, she does not want the rental income or ownership of the properties to go to any of their spouses, she wants it to then go to her granddaughter (she only has one).

Well... Even if she has some outright ownership, that isn't a dead-certain, sure-fire thing. First, as mentioned, if the form of ownership should contain right of survivorship, the last sibling to survive might end up owning all the properties. Second, even if she has an interest to pass along, one can never tell what might happen between now and when she passes.

But put all that aside and get back to her wishes. A will really isn't the kind of instrument to use to try to control what happens to property a couple or more generations down the line.

Do some research on how the properties are owned for your mother. Then, suggest that she consult with an estate planning attorney about ways to accomplish her testamentary goals.