Legal Question in Wills and Trusts in California

Re: Property

First of all, you should not get him to sign anything, since the transaction will be subject to challenge on the basis of fraud, duress, competence or overreaching. Secondly, you landlord should take responsibility for his own estate planning.

I suggest you get for yourself and for your landlord my book "How You Can Protect Your Loved Ones in the Event of Death or Disability (Without Paying a Legal Fees}" Not only does it explain virtually everything you need to know in plain English, but it contains in the Appendix a copy of the Legacy Living Trust Package. This is a complete trust package for the Middle Class including a Living trust for single or for married people, a durable general power of attorney, an advance healthcare directive, an Abstract of Trust, all necessary transfer documents and instructions. Having taught literally hundreds of seminars to thousand of regular middle class people, I have learned how to answer the most important questions in language understandable to all. Having learned over 30 years that most people that go to an attorney to pay $1200 or more for these documents don't understand the language in the unnecessarily complicated documents, don't understand what they are doing and why, and ofen make common but avoidable mistakes, I created the Legacy Living Trust Package.

You can order the book on-line at Amazon.com, but, it is better to order at www.IWant2CreateMyLegacy.com. If you order there, you will get a free special report entitled "The Seven (7) Most Common Mistakes Made by the Middle Class in Planning For the Inevitability of Death and the Likelihood of Disability, and How to Avoid Them." This report alone could save you and your family hundreds of times the cost of the book.

Again, the book is, to my knowledge, the only one written for regular people in the middle class, and it contains in an appendix the Legacy Living Trust Package, which to my knowledge is the only complete fill-in the blanks trust package written in simple English ("People Ease", not "Legalese") that will be valid in every State in the US.

Use of a living trust is one vehicle your landlord can use. If he wants to assure the property becomes yours on his death and that you get the tax benefits of an inherited appreciated asset, he can use a deed of a remainder interest to you reserving a life estate to himself.

But, his estate planning needs are significantly more complex than just leaving a home to you.

Re: Property

If he wishes to leave you this after his death, he needs to do so either in his will or through some type of instrument such as a trust. There is not really a premade document set up for such a transfer.

Re: Property

Is his intent that you will be able to rent the home as long as you want or that he will transfer the property to you when he dies? There are different things that must be done for different purposes. Also, if he has any close relatives, they will contest your getting the property. Since he is elderly, they may argue that he had Altheimers, you took unfair advantage of of a senior citizen [especially if you are a woman so they can try to argue there was some type of romantic connection]. For both of your sakes and to reduce the strength of any challenges after his death, you probably both want to go to an attorney, hear the various possibilities, have him speak at length with the attorney so that later the attorney can honestly testify that he was of clear and sound mind and appeared to know what he was doing.

If he puts he intentions in a Will, he might at some point change the Will, especially under pressure from relatives. If he has a limited income and you are relatively well off, you might consider buying the property from him at favorable terms where he ends up getting more than the rent. Currently, the rental income is taxed as ordinary income and he gets some deductions for depreciation [the actual expenses he has on the home, like property taxes, are actual payments out of his pocket and the tax benefit is only a fraction of what he actually has to spend]; you currently get no deductions. If he sold the house to you at a reasonable price, the first $250,000 of any gain he makes [I assume he is not married]is shielded from any taxes plus he gets back tax free his original purchase price and all he has spent on the house, less the depreciation he has taken. You get the house with no one being able to take it away from you and get to deduct the interest portion of any payments you make to him. The only drawbacks, besides the headaches of owning rather than renting a house, is that when he dies, if you inherited the property from him then for tax purposes its value [basis] would be its fair market value at his death. So when you sell the house you do not get the death step up in value. Also, the house will be reappraised at its current value and the property taxes will go up.

You should read some books on real estate [look at Nolo Press books written in lay language] and give him a summary of what you have read [keep th summary so you can show at his death that he had the knowledge of what was in your summary]. To keep the deal fairer and less likely to attack, you should have separate attorneys. That may end up costs a few thousand dollar but that is better than a big fight with his relatives and possible loss of the property, or certainly much higher attorney fees to fight them off then it costs to plan it out well.