Paying home bills doesn’t guarantee ownership
letter are in the first sentence:
The home was your grandparents’ home. It doesn’t appear it has ever been yours. Yes, you’ve paid expenses and financed the property into your name, but that isn’t the same thing as ownership. It just means you have the legal liability and obligation to pay the mortgage.
Your grandparents had a reverse mortgage on the property. That means when the last of your grandparents moved out of the home permanently, the reverse mortgage would have to be paid off. If, after they died, your grandparents’ home was sold and there had been money left over after paying off the reverse mortgage lender and all closing costs, that residual cash would be considered part of your grandparents’ estate.
In the meantime, you came in and helped your grandparents refinance the home. Why? You didn’t include an explanation, so that’s an open question, but we have some ideas. Perhaps your grandfather was having difficulties paying his bills and his living expenses, or perhaps the property needed work and there wasn’t enough equity in the home.
The best-case scenario is that you were helping an elderly family member in financial need. In that vein, you were able to use your credit history to refinance the home, pay off the reverse mortgage and take equity out of the home to pay for your grandpa’s housing and other expenses. If you simply used the refinance money to pay off the reverse mortgage and then paid all of the housing expenses, you may have been doing your grandpa a great favor.
Unfortunately, we don’t know why you just didn’t give your grandpa money to pay his expenses. If you had, when your grandpa died, the home would have been sold, the proceeds from the sale would have paid off the reverse mortgage and the leftover money would have gone to your grandpa’s heirs as designated in his will or as set forth under state law.
If your husband and grandpa jointly owned the house with rights of survivorship, then the home would have automatically gone to your husband upon your grandpa’s death. If your husband and grandpa owned it as tenants in common, your grandpa’s shares would be divided among his heirs — unless he had a valid will, in which case all of his property would be divided according to the terms of the document.
It’s a thorny situation. If your grandpa died owning all of the home, and your aunt was due to inherit the home or some of the equity in the home, she may be feeling as though you came in and persuaded your grandpa to sign away his home to your husband in a way that wasn’t proper. If he left a will, and it stated that the home or part of his estate would go to his sister, that would also explain her claim to the property. And, it could be that she just feels she’s owed something.
When there are elderly relatives who have issues that impair their ability to take care of their financial affairs, it’s best to hire an attorney who can go over the documentation, understand the family dynamics and be as transparent as possible, so no one can come in later and claim that you took advantage of the situation.