I saved an article from that you wrote titled "All that I need is a will, right?". I saved it for my mother-in-law who is contemplating the need for a Revocable Trust. Briefly, here is her situation. She is 82 years old, and a widow. She owns her own home in Lincoln Park and has lived there for over 50 years. One of her son's lives there and her intent is that he can continue living there after her death although her will states the property belongs to all her four sons (or their heirs) with the stipulation that the one son can continue to live there until his death. Her concern is with property taxes and the reality that her death will cause a "transfer of ownership". If she was to get a Revocable Trust, thus avoiding probate of her home, mean that a "transfer of ownership" did not occur and thus her Lincoln Park taxes would remain as they have been? The son that will remain living in the home has a limited income and her concern is that the taxes could/will double.

I appreciate any insight you can give us on this. Also, if you could suggest any reading material on this, it would be appreciated.

Thank you,
Kathie W.
Lincoln Park, Michigan

Dear Kathie W.

If your mother transfers by Will her property to her children equally, the new Executor's deed from Probate Court will be considered a Transfer of Ownership under he Homestead Act and the Headlee Amendment. The new tax basis will be the value of the property as of the date of the new deed.

If your mother transfers the property into a Revocable Living Trust, that transfer is specifically exempt from any valuation increase. Your brother can continue to live there, under a special bequest provision in the Trust, without an increase in property taxes.

A "Special Bequest" is needed to specifically state the conditions under which the brother will have a "life estate". What if he moves, fails to maintain the property, fails to pay the taxes or utilities or insurance? What if he has a significant other move in with him? What happens when he dies? With a Revocable Living Trust you can set all the necessary parameters of your Mother's wishes in a way that is private, without the need for Probate Court, and also create a smooth, cost-free, transition of assets to you and your siblings at the necessary time.