Connecticut has a unique law that all real estate has to go through probate even if it has a right to survivorship deed or is in a living trust. Right now all my assets will go directly to my daughter when I die with the exception of my house. I thought of creating a living trust just for my house but found out that even if I did it would still have to go through probate the way it had to go through probate when my husband died even though I had a right to survivorship deed. In any other state it wouldn’t need to go through probate for either situation. So for this reason if I decide to move I would want a rental situation so my daughter could avoid probate completely.
I met with a lawyer last week to give my daughter a durable power of attorney in case I subsequently become cognitively impaired so if I had to move while I am still alive she could sell the house for me
If I moved to a condo I would still have the problem of owning real estate when I die so the only way I can think of keeping
my daughter from having to go through probate is to sell the house and move into a rental property. The only problem is that one area that has been hit hard by inflation is the rents on nice apartments. Even though I could afford it I hate the idea of paying thousands of dollars a month for something that I do not own.
Does anyone have any suggestions for how to prevent my daughter from going through probate just for my house
CT is one of about 20 states that do not recognize what is commonly called a transfer on death deed. I am surprised that a deed held by a revocable trust also has to go to probate. That is usually the way to avoid probate for a property.
One possibility is to deed your property to your daughter and retain a life estate. What that means is that you will have the right to live in your house until you die or give up your right to do so. There will be some language requiring you to pay all taxes, keep the property in good repair, etc. I am not up to speed on CT law, and every state tweaks the general rules to their liking. I am not sure if that requires probate or not after your death, as some states do and others only require a death certificate.
This is one web site I came across discussing your situation.
Another alternative is to gift your house to your daughter and her husband and rent it back. That can be complicated and will involve some tax implications that you should discuss with an accountant or tax attorney.
@BMWMTBer - I doubt it because my daughter and son-in-law currently own a beautiful 5,500 square foot house in an upscale suburb of Atlanta and her family loves living there
However gifting the house to her while I am alive is a possible way for her to avoid the problem of having to go through probate when I die since all of my other assets will go directly to her without having to go through probate when I die
However the simplest solution is probably to sell my house in CT while I am alive and move to a nice rental apartment either in CT or near where she lives in Atlanta. Her family has been trying to convince me to move near them since my husband died two years ago and she thinks there are some nice adult communities near them that I will like.
That’s one of the tax implications I mentioned. The IRS will look for her daughter to be reporting market rate rent or they will impute it. There are gift and estate tax issues that shouldn’t preclude the deal, but need to be recognized.
My father sold his house in Florida and lived with me in Atlanta for 10 years, he died 2 years ago at 98. He had no car and no property at death and that made things incredibly easy for me (executor). He didn’t even have a will but CDs were payable upon death and he divided them equally between me and my brother. He had some stocks and all I needed to do was supply a death cert and they were split equally.
My advice is to sell the house in CT and rent something you’re comfortable with in Atlanta. My other advice is if you have significant assets (10m+), move to georgia where there is no estate tax. You might consider establishing a irrevocable trust in Montana, you don’t need to live there and apparently it’s ironclad and not made public.
You should sell and move to Atlanta. If it has been less then 2 years since your husband died you can still claim $500,000 exemption in the capital gains else only 250,000.