Ask the Expert: Changing Mom's deed

I'm one of seven siblings. Several years ago, our mother gave her house to one brother, keeping a life estate. He manages her finances and generates income for her by finding and screening tenants.

She's 87 and going strong, but we're concerned that when she passes away, he alone will inherit the house. I don't think that's what she intended. Can she go back and change the deed so we're all on it? If not, what are our options? We're willing to give this brother an additional amount to compensate him for his work, but he's worried he'll be taxed for that.

Your mother can't change the deed, but your brother can.

Her retained life estate guarantees her lifetime occupancy, and the right to rental income. She's responsible for maintenance and property taxes. But your brother owns the house. He could sell it, subject to her occupancy, says Eric Kramer, a Uniondale estate lawyer. (If she chose to move, her life estate entitles her to a share of the sale proceeds.)

Your brother could give each of you an interest in the house. For example, he might keep a 20 percent interest to compensate him for his work for your mother, and divide 80 percent equally among the rest of you. If you ultimately sold the house for $500,000, he'd get $100,000 and each of you would get $66,666. That hypothetical transfer wouldn't trigger a gift tax for your brother, notes Kramer, because every taxpayer has a $5 million lifetime gift tax exemption. Moreover, everyone can give $13,000 a year to an unlimited number of recipients without tapping into that $5 million lifetime exemption.

The bottom line. When you give your house to a new owner in a transfer with retained life estate, you cannot revise the transfer retroactively.

Websites with more information. bit.ly/9jORKz and bit.ly/oCSUMO