5/30 dear motd probate lawyer,
an elderly woman who lived in an expensive house dies, leaving two
surviving sons, brother X and brother Y. After her death it turns out
that several years before, brother X got her to sign over the deed to
the house to his name in exchange for some money that was worth less
than 10% of the value of the house. no one else in the family knew
about this and everyone assumed she still owned the house at the time
of her death. People suspect that coercion or trickery was involved
but there is no proof. The brothers don't get along but the mother had
a good relationship with both and there is no possibility that it was
her intent to "cut off" brother Y from owning his share of the house.
Does brother Y have any legal recourse? -clueless about legal stuff
\_ this is pretty sad. I assume you're Y. You can take X to the court
of course, but you have no evidence of coercion, and basically,
you have no case. You might be tempted to talk to lawyers and
many will take up your weak case without telling you
what your real chances are, since they just want to take your money
(trust me, many lawyers will tell you what YOU want to hear and
take you for a ride). Trust me, my grandpa left several estates
back in my country and my dad, who thought he was close to his dad,
only got 20 acres of tea farm while my old uncle (the oldest son,
who never talks to my grandpa), got EVERYTHING. But this is in Asia
and the oldest son always gets everything, and there's nothing you
can do. Anyways, let's examine your case. If you really had a
good relationship with your mom, and if she's not senile
or stupid to be tricked, then she would surely have consulted
with you in regard to the transfer of deed. The fact that
she didn't tell anyone, is an indication that 1) she really
favored X for whatever reason, like being the oldest son,
etc and 2) she didn't want to hurt your feelings. If this is the
case maybe it's time to reflect back and see that perhaps, perhaps
you weren't as close to her as you originally thought. And if she
was indeed coerced, then I'd just take this as an expensive lesson
in life, because seriously, your case is just weak. It's a
cold world out there and it's all about survival of the
fittest, and it's clear to me that X is the one who's more
fit, you're weak. I'm sorry, I wish you luck.
\_ Sorry but you're totally clueless. This isn't "the old country"
where you come from. Judges here 'tend' to apply common sense
to cases when allowed to by law. See below for a much more
useful answer as it applies in the US. In short, the cheated
son should consult a few lawyers, compare notes, and decide
from there. This sort of thing is very common unfortunately
and can be invalidated by a judge quite easily if they choose
to do so. From the OP's description there was clear intent to
defraud the mother and other heirs.
\_ I'm not a lawyer yet, but some things I think you need to find
out about are:
(1) Was the contract between mom and X for the sale of the home
in writing? - If not, mom's estate may be able to void the
the contract b/c the statute of frauds.
(2) How educated was mom in relation to X and was mom in decent
health, &c. when the contract was made? - If mom wasn't very
well educated or was sick, &c. it might be possible to void
the contract b/c of a lack of capacity/unconscionability
since the price was so low (by itself the low price probably
is not sufficient to void the contract, and I'm guessing that
you won't be able to find evidence of coercion/duress).
(3) Did X record his deed? - If so, it will hard to invalidate
the transfer from mom to X.
(4) Did mom live in the home (or rent it out and keep the rent)
after she "sold" it to X? - If so, mom's estate can argue
that the deed to X is ineffective b/c mom did not have an
intent to convey the property to X.
(5) If mom lived in the house or rented it out, (i) did she do
w/ X's possession and (ii) how long did she do it? - Mom's
estate might have a claim of adverse possession.
Notes/Assumptions:
(a) I'm guessing that mom didn't have a will or her will didn't
cover the house or what to do w/ unidentified property
interests.
(b) The deed from mom the X didn't impose any conditions on X
that X might have violated thus forfeiting his claims.
(c) There might be a statute of limitations problem w/ (1) and
and (2) if the sale happened a long time ago.
(d) Unless Y is the executor/receiver of mom's estate, I don't
think that Y can sue X directly for (1) and (2), however Y
probably can sue for (4) and (5) directly
think that Y can sue X directly for (1) and (2).
\_ Anyone with an interest can sue.
\_ My contracts class was a mess but I'm pretty
sure that for a 3d party, like Y, to sue on a
contract theory (#1 and #2) they will need to
show that there were an assignee or a 3d party
beneficiary.
It doesn't look like mom assigned her rights
under the contract to Y, so Y would have to
argue that he was a 3d party beneficiary
under the contract to Y, so Y would probably
have to argue that he was a 3d party beneficiary
(possible, but hard) of the contract in order
to sue on his own, which is why I said that
Y probably can't sue X directly.
\_ This isn't a contracts issue. It is fraud and probate.
It is also defrauding the IRS since I'm sure the son
who stole the house didn't pay taxes on his instant
10x profit on the difference between what he 'paid'
and the fair market value of the house.
\_ This isn't a contracts issue. It is fraud and
probate. It is also defrauding the IRS since I'm
sure the son who stole the house didn't pay taxes on
his instant 10x profit on the difference between
what he 'paid' and the fair market value of the
house.
\_ AFAIK, there are multiple issues here.
(1) Y wants to rescind the contract for
sale between mom and X which means
Y needs standing under a contract
theory. If fraud was involved in
the formation of the contract for
the sale of the home, then the
contract is generally voidable by
the parties. I don't think there
are enough facts to show fraud,
misrepresentation, &c.; incapacity
and unconsionability are probably
better theories.
theory.
(2) There may or may not be a probate
issue separate from the contract
issue - did mom actually transfer
an interest to X and did mom get
and interest via adv possession?
(3) There may not be a tax fraud issue
if 10% of fmv is close to the state
assessed value of the house.
(e) I think that Y can sue directly for (4) and (5) b/c mom
would have retained a property interest that (assuming the
will did not deal with explictly) may have passed in part
to Y.
BTW, is this for real? It sounds more like an exam question.
\_ Yes, this is a real case, and yes, it's pretty sad. I'm not Y
(though I can see why people might assume that) but he's someone
I care about and I appreciate the advice so far. I guess the
first reply mirrors the kind of worry I have about lawyers
pressing for a case when there's no case there, which would waste
a lot of money, and more importantly, cause a lot of unnecessary
stress. Then again, i don't see this as weak versus strong (and
there is no "survival" involved). what's "strong" about cheating
an old woman? but of course I'm biased. The mom did live in the
house until she died. Apparently after selling the house she
told a friend of hers it was one of her "biggest regrets". The
rest of the questions I don't have answers for right now. -op
an old woman? (I know, I'm biased). The mom did live in the
house until she died without paying rent. Apparently after
selling the house she told a friend of hers it was one of her
"biggest regrets". The rest of the questions I don't have
answers for right now. -op
\_ If mom lived in the home rent free, it would strengthen
#4, but it might cause you a problem with adv possession
(esp if mom knew she had sold it).
If you answer #1 or #2 as yes, then you might have a case
and should probably see a real lawyer and see what they
think. If the plan is to sell the home, you might be able
to get the lawyer to take the case on contingency that Y
wins and gets an interest.
\- It seems to be the strongest thing to focus on
is the sham sale, given that it was not anywhere
near market value. Otherwise that would be a way to
get around tax laws. I think you may be able to attack
that way. If you hire your kid to mow the lawn so he
is eleiglbe for your "corporate education program"
where you pay for his college and then you claim that
as a business expense, something fishy is probably going
on. etc.
\- It seems to be the strongest thing to focus on is the
sham sale, given that it was not anywhere near market
value. Otherwise that would be a way to get around tax
laws. I think you may be able to attack that way. If you
hire your kid to mow the lawn so he is eleiglbe for your
"corporate education program" where you pay for his
college and then you claim that as a business expense,
something fishy is probably going on. etc.
\_ The "sham" sale may not be the best thing to
focus on:
(1) The fact that the sale price was 10% of fmv
is inconclusive b/c family members often
sell land to each other at below fmv in
order to keep the property tax low (in sj
there are homes the city values at $200K
for property tax but fmv ~ $1.2e6, a sale
at $200K would be ~ 17% of fmv but still
legit)
\_ My understanding is that property values are
re-assessed whenever a property changes
ownership, so it doesn't matter if the sale price
was x% of fair market value.
(2) Unless there is conclusive proof for the
sale, X can claim that the money he gave
his mom was a gift and that she made a
separate gift of the home.
\_ BZZZT! Gifts are limited to $11k per person
without getting nailed by the IRS.
\_ Even if X had to pay the tax it is
probably on the assessed value (in
CA generally less than the fmv) so
claiming it is a gift maybe pretty
good for X.
\_ There is a large exemption called the unified
tax credit which everyone uses when gifting
houses.
(3) Y may not have standing to sue under the
contract.
Best thing OP can do is to get more info and
then go see a real lawyer.
\- yes, i understand this happens, i understand
the law and tax enforcement people dont spend a
lot of resources rooting this out, but i image
it is not legal ... just like a business is supposed
to be in the business of making money if it is to
be treated as such for tax reasons.
\_ I am aware of a situation where a 'family friend' bought a
house from an old widow for quite a bit less than it was worth.
Someone involved in the process (attorney, realtor, or
accountant - I have forgotten) noticed the unusually low sale
price. The transaction was rescinded by a court after they
found the woman mentally incompetent. The house went on the
market with the stipulation that the 'family friend' could not
bid on it for something like 30 days. It ended up selling for
$70K over asking, which was like double what the 'friend' had
offered. He was not the winning bidder. This happened in CA. |
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