Life Estate in the State of Florida

Ok, this is going to be lengthy. What is the deal with a life estate in the state of Florida? I am trying to figure out how to protect my interest in this life estate. My dad died 3 years ago, leaving his home in his name only..(deeded). Due to florida laws, the mortgage on the house had to be in both spouses name. He was married at the time of his death, so now his surviving spouse is responsible for that mortgage. However, because the deed was in his name alone...the home automatically went into a life estate when he died. (well not sure how "automatic" that is..but that's what was done..lol) Dad said the house would be ours in the end. (meaning my sisters and I) I believe the only way he could do this is to leave it as it was left..going into the life estate...as that's how Florida laws are. Dad's wife is a greedy person, who just "cannot believe" dad did not leave everything to her. (this may give you an idea of what kind of person I have to deal with) Anyway, the home is worth approximately 250k. The balance on the mortgage is 60k. My dad was paying mortgage bimonthly when he was alive to pay down faster. Wife is still doing the same. Now, I am not sure if it's written in the mortgage agreement that way, but have told her not to pay it down like that if she doesn't have to. I do have access to bank # for informational purposes only. I know that the payment is 384.00 a month. But she pays that twice monthly, as dad did. When I call the bank to retrieve knowledge that she's paying timely, it just says...as an example...last payment received was 384.00 on Feb 1. Your next payment of 384.00 is due March 1. This would mean to me that she doesn't HAVE to pay this twice a month. She is calling me and my sister (who are the remaining interest part of this life estate) complaining that she cannot afford the mortgage payment. She wants us to pay it. Now, being as my own mortgage is WAY higher than hers, I have a problem with that....I'd love a 384.00 a month mortgage..even double that would be less than what most people have to pay. I've talked to her at length about this. She recently has said she's going to have to sell or go into forclosure. I've also checked with the bank, and asked about how I would know if she defaults on that loan, and they say because my name isn't on that mortgage, I'll have no way to know. In her estimates of selling and offerings to us, because as I understand it, my sister and I have to AGREE to sell also, her offer to us was 20k. I don't even know if she meant a piece, or together, because I basically laughed at her. Even the actuary tables give us a better margin than that. I told her no. She SAYS she really doesn't want to move. My guess is that she is truly just trying to figure out a way to screw us. But I'm told there really isn't any way with the exception of forclosing, and then, what good does that do even her ? The money is too important to her. She is complaining that she's eating up all the other money my dad left her, because she chooses not to work. And she's using his interitance to pay all bills. I even gave her an example of her own insane thinking, by telling her, even if we agreed to 20k a piece, and you have to pay the mtg. off...that's 100k off the selling price. Never mind any other costs, as they are hers. Lets say she can sell for 275k...write off what she pays off mtg, and us, and closing costs or whatever, and she'll maybe have 160k left. Ok...what's she gonna buy for that? I told her you'll eat through that within 5 years and be living in a tent. She's still left with next to nothing to live on. I apologize for lengthy post. I'm just bewildered at this woman, who is 53 at most...thinking she should just be able to live life free and clear now that my dad's gone. Banks won't give her the time of day as she cannot refinance anything, or get another mortgage because this home is in this life estate. Never mind the fact that she's not working so doesn't have an income for a bank to even consider anyway. There must be some way that I can protect my interests in this house. I have no problems waiting it out, letting her live there, until she dies. That's in my best interest anyway. I've offerred to pay off the mortgage if she turns over her interest to me, but she says she'd rather see it go into forclosure before she lets me have it..lol. Insane. Any suggestions? Thanks.....

You need to talk to an attorney but I don't think she is responsible for the mortgage. She has a life estate and is responsible for the taxes and maintenance but not the mortgage. I don't know what the ramifications are of letting her continue to pay it off. If the house is sold the money would have to be put into a bank account and she would get the interest until her death.

Yes actually, she is responsible for the mortgage as it stands right now because she and my father had the mortgage together. Now she has to pay it. The problem is more to do with the fact that she can't refinance it to better terms, or lower rates because it is in life estate. So she's stuck paying the bill there, and yes, you are right, she does have to maintain, and pay taxes, etc...My fears are geared more toward her inability to think that it will eventually become my sisters and mine, or the fact that should we all agree to sell, that my sister and I would even get any portion of the sale. If sold, she is responsible for all costs involving that sale. I did hire an atty when dad first died, to help us understand the contents of the will and the proceedings that took place. Basically the atty told us that she gets to live there until she dies, has to pay for any mortgage and maintenance. She cannot take any loans against the house, nor refi anything. That piece also goes for us. I just wish there was some way to know that if she doesn't pay that mortgage, and this house goes into forclosure, that my sister and I will know this before it's too late. We would be stupid to let a 60k mortgage go on a home that's worth far more in any sense. I'm just wondering if anyone else has been in this type of situation, and how was it handled, when there is friction between the life estate person, and the remaining interest person. Thanks

If she fails to make mortgage payments, let alone permits the house to go into foreclosure, that may constitute grounds for ejectment proceedings on the basis of waste. (That is, should she put the property at risk by not fulfilling her legal duties, you may have a basis to terminate her life estate and evict her from the property.) But assuming the payments are actually made, her whining and threatening to miss payments are annoyances, not a basis for legal action.

Annoyance is putting it mildly. Thanks for the replies though. I've spent countless time on this computer trying to look up actual facts regarding anything to do with life estates and the predicament we are in. It seems logical to me that there should be some course of action my sister and I could take should the wife default under the life estate agreement. Even though she is paying everything right now, and her "annoyances" are just that, annoyances...I do worry that she will eat through dad's life insurance because she refuses to work and then what? If she can't pay her mortgage, what recourses to we have then? Life estates sure are tricky in my opinion.

I was correct that normally the remaindermen are responsible for the mortgage payments. The exception is when the person holding the life estate is also on the mortgage. Here is the Florida law. I am not an attorney so I hope Aaron will explain exactly what this means in layman's terms.

"Appellee, in support of the lower court's finding that the children as owners of the remainder interest are responsible for that part of the payments on the note which constitute principal, cites Snow v. Arnold, 132 Fla. 435, 181 So. 7, Williams v. Williams, Fla.App.1960, 120 So.2d 202, and Wagner v. Mosely, Fla.App.1958, 104 So.2d 86, as controlling. While we are in accord with the principles expounded in these cases, we find that they do not govern the instant situation. In those cases the courts found that the life tenant was to be responsible for interest payments and the remaindermen for principal payments when land was acquired subject to an outstanding indebtedness. The fact which [*356] distinguishes the present situation from those cases is that the appellee, life tenant, is primarily liable on the indebtedness notwithstanding that she is only an accommodation [**9] co-maker on the note. Accordingly, she is responsible to the Federal for the entire indebtedness. However, since the appellee had only undertaken the obligation as an accommodation to the deceased she should have recourse over against his estate for the debt as she pays it. While appellee cannot recover from the estate since it has long been closed for the filing of creditor claims, she as surety has the right to be subrogated to the rights of the Federal provided the entire debt is paid. n3 Federal Bank of Columbia v. Godwin, 107 Fla. 537, 136 So. 513,; Lasseter v. Long, 85 Fla. 439, 96 So. 841. "

My reading is that under most circumstances the life tenant pays interest on a mortgage, while the remaindermen pay that portion of the mortgage which goes toward the principal.

That can change, with the life tenant being responsible for both interest and principal, if the life tenant is the mortgagor. However, if that is the case, there are still circumstances where the life tenant may have recourse to recover payments toward principal - such when the life tenant only undertook the mortgage obligation as an accommodation to the deceased.

Clear as mud?

No, not clear as mud since this is the first I've ever heard that scenario. Both the estate atty. and the atty. my sister and I hired stated the same things....that she is responsible for the mortgage. She gets to live there, pay all bills etc..until she dies. Or we call all agree to sell the house, and she still has to pay off her mortgage with her percentage of the sale she will receive based on the actuary tables. Florida law states that even tho a person has a homestead deeded only in their name, if there is a mortgage taken on the home, BOTH married parties have to sign for it. I suppose this protects the bank. In any case, they both took the mortgage out together. Might I ask where you are getting that reading from? Where I can find this information? I need to be informed, as that's how I am. Which is why I'm on this board asking all these questions and talking so much..lol I think I have stated before that I have offered to pay the mortgage off, but she will not agree to that as it means handing over her life estate She is trying to figure out a way to get us out of this altogether I believe..some way of keeping us from getting the home at all is the impression I get from her. I will not, nor will my sister put our names on a mortgage agreement with her as I will not allow my credit to be tied in with hers. I've worked hard in my life to maintain my credit. Besides, I don't trust her at all. Can't. She's done and said too many things to make herself untrustworthy. And my father would probably send a bolt of lightening down on my head if I did anyway..lol. She still tells us to read the will and tell her how we get the house. She says she has been to many different atty's., and tho they all tell her the same thing in regards to this, she's still not "getting it". Its like she thinks everyone is out to get her or something...who knows. Nobody is.....but I believe she is just too greedy for her own good. My dad didn't expect to die at 62 but he did leave her financially sound and it shocks me that she can't just be happy with what she got, and the fact that even though she has to pay a 385.00 mortgage and keep up a house, she has a place to live for very cheap if you ask me. If dad was alive, they'd be paying this out to pay the mortgage and upkeep. The only difference now is that he's not alive, and in the end, this house and any bills and maintenance will become my sister's and my problem. Maybe there just isn't anyway to explain it to her where she will "get it". We will just have to play the waiting game I guess.

How does that change the scenario, given that she is the mortgagor?

It doesn't change anything, but it as I read it, it sounded like my sister and I were supposed to be paying the principle, and she the interest, ..and then I got confused...as it was a whole new scenario that neither atty's presented us. It's just one scenario of many I guess. The actuality of it is that yes, she is the mortgager and the reality of it all is that I have to protect my own interests. Tho the mtg isn't mine...I also do not wish her to lose the home. I wouldn't wish that on anyone. How does someone who isn't on the mortgage, but owns an interest in the property do that? I'm guessing there really isn't any way to protect my interest in this other than keepin an eye on whether she's making the payments or not, and if and when the time comes' she's not, I have to make some sort of decision at that point, if I find this out before the bank starts a forclosure process. And not sure what options I even have anyway.