Life estate vs. will: Which prevails in real estate inheritance?

Q: My mother passed away a year ago. My brother has just announced he has a life estate deed leaving our mother's house entirely to him, but it was not recorded prior to my mother's death.

My mother's will divided all her real and personal property equally between my brother and me. Does he have a valid life estate on my mother's home?

A: Your question raises some complicated issues. In general, for a deed to be valid, the deed must have been drafted and signed and delivered while the owner of the property was alive.

Some states may differ in how they treat your situation. But the key for your situation is whether your mother actually intended to give a life estate to your brother and whether she gave him this life estate while she was alive.

If she signed the document and put it away, she might have been saving the document without having the real intent to give him the life estate. It's odd that your brother would announce the life estate long after your mother died and not while she was alive.

You have already realized that the deed your brother claims conflicts with the terms of the will. The only way you will find out for sure whether the life estate is valid is to get more information.

Some important information to know would be: when your mother signed the deed; her mental capacity at that time; whether she was coerced into signing the deed; whether she gave the deed to your brother; whether your brother knew that he had the life estate while your mother was alive; and why your brother delayed recording the deed once your mom died.

If you have this information, you can discuss these issues with a real estate attorney in your state to determine what the laws of your state provide. The deed could be invalid and the will could prevail.

If the deed is valid, you still own an interest in the home. When your brother dies, you or your heirs will get the 50 percent interest in the house that your mom left you. The only issue now is whether your brother gets the life estate.

If you and he have decided to sell the house, the life estate would not be relevant, and upon the sale of the house he and you would share the proceeds of the sale.

Q: My license was inactive as a Realtor when I signed up with a new broker last year. I had a buyer that wanted to present an offer. Since my license was inactive, my broker said he would handle the transaction until I was active.

My license was reactivated and I had numerous conversations with my broker and he assured me that the transaction would now be placed in my name. When we closed on the home, he refused to pay my commission stating that I did not have an active license during the time the contract was signed. He is not returning my phone calls, e-mail or written correspondence. Last week he sent a "Broker/Sponsor Termination" form to the real estate commission.

He never had any interaction at all with my buyer, and lied to me about the whole thing. What recourse do I have?

A: You should contact the real estate commission in the state in which you are located. Frequently, these governmental agencies can advise you of the status of the laws in your state and tell you whether you could have been paid a commission on that transaction.

It would be helpful if you have your broker's assurances in writing. Otherwise, you're left in a situation in which he will claim he never agreed to pay you a commission and you have to prove that he did.

In most states, commission agreements must be in writing. However, if the broker held your license and there was an understanding (that you can prove) that he needed to pay you the commission, in addition to filing a complaint against the broker, you might have to sue him.

You need to talk to an attorney that can litigate your case. But you first need to find out if you're even able to receive a commission in your state if you started a transaction without a valid real estate license but had one at the time the deal closed.

If your state laws provide that you must have a license for the entire time of the transaction, you may be out of luck and found yourself the victim of an unscrupulous managing broker. If you have no case in the legal system, you may still be able to file a complaint against the broker with the state agency and with the Board of Realtors in your area.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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