Simultaneous life estates

[Ken in Arkansas]

I have an interesting assignment. Father (age 80) and mother (age 72) deed their personal residence to their daughter, with both father and mother retaining a life estate. Father and mother are now seeking state aid in order to enter a nursing home, and the state is requiring a financial statement of their assets in order for them to qualify. Daughter has called and asked for an appraisal on each life estate.

I have appraised several single life estates over the years, but never two life estates at the same time on the same property. I would welcome comments from those who have encountered this situation.

Thanks!

 

[airphoto]

Ken,

Sounds to me like "last to die." They retain the life estate, but can prolly deed it by 'quitclaim' to their survivors now that they no longer have a use for it .. cleans up the deal, and it's over prior to death. (Presuming the 'surivors' are those who'll own fully upon passing.)

None-the-less, use the table of life expectancy from IRS for the one of them with the longer life expectancy ..

Discount into the future, using current property tax, insurance and other maintenance costs until expected sale date as discounted negative cash flow .. and your appraised value, discounted to that probable future date.