BASIC (05-11)

PS 01615.022 Maine

A. PS 11-089 Helen L. E~ Possible Equitable Ownership of Property in Maine

DATE: April 22, 2011

1. SYLLABUS

This opinion examines whether an individual can have equitable ownership of a former residence based on an verbal agreement. Under Maine law, a verbal agreement is insufficient to grant an individual a life estate in his or her former property. Even if the individual pays the property taxes, insurance, and upkeep, this is insufficient to establish equitable ownership simply because Maine law does not recognize verbal agreements as legitimate.

2. OPINION

This memorandum responds to your December 23, 2010 memorandum asking whether Helen E~ has equitable ownership of the residence at 75 Purple Heart Highway, Brooks, Maine. For the reasons set forth below, it appears Ms. E~ does not have equitable ownership.

BACKGROUND1

On November 22, 1996, Helen L. E~ granted by gift the property presently located at 75 Purple Heart Highway, Brooks, Maine to her daughter, A. Delaine N~, and her granddaughter, Melissa P~.2 On September 9, 2010, Ms. E~ filed for Supplemental Security Income. The claim was processed using the maximum amount of in-kind support and maintenance income pending the living arrangement determination. On September 15, 2010, Ms. E~ stated on form SSA-795 that she had a verbal agreement with Ms. N~ that Ms. E~ would be allowed to live at 75 Purple Heart Highway, Brooks, Maine for the rest of her life. Ms. E~ also stated that, since the time of the verbal agreement, she has lived alone in the house and paid the property taxes, homeowner’s insurance, and “necessary upkeep.” Ms. N~ provided a statement to the same effect on September 15, 2010.3 On November 15, 2010, Melissa B~ provided a similar statement. 4 On April 13, 2011, Ms. N~ and Ms. E~ provided additional statements, in which they confirmed that, at the time Ms. E~ conveyed the property to Ms. N~ and Ms. B~, their understanding was that Ms. E~ would pay the taxes, insurance, and other expenses. Ms. B~ could not be reached for an additional statement.

You asked whether Ms. E~ has an equitable ownership of the residence at 75 Purple Heart Highway. For the reasons set forth below, it appears Ms. E~ does not have an equitable ownership.

DISCUSSION

Assuming the property referenced in the November 22, 1996 deed is 75 Purple Heart Highway, and assuming there were no subsequent transfers of that property, it appears that Ms. N~ and Ms. B~ are the record owners. The oral agreement among Ms. E~, Ms. N~, and Ms. B~ was, in itself, insufficient to grant or reserve a life estate in Ms. E~’s favor because it was not in writing. See Me. Rev. Stat. tit. 33, § 51 (“No action shall be maintained . . . Upon any contract for the sale of lands, tenements or hereditaments, or of any interest in or concerning them . . . unless the promise, contract or agreement on which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith”); Laflamme v. Hoffman, 95 A.2d 802, 803 (Me. 1953) (“A life estate being an estate in freehold cannot be transferred or created by parol.”).

Moreover, on the facts provided, Ms. E~ does not have an equitable life estate in the property. See Laflamme, 95 A.2d at 803 (“Under some circumstances parol transfers of land will be enforced in equity.”). To acquire an equitable life estate, Ms. E~ must have given consideration in exchange for the right to live at the property. Id. at 805 (notwithstanding defendant’s claim of possession based on a parol gift of life estate, defendant had neither legal nor equitable estate where he gave no consideration, that is, he performed no act at the request of the promisor). 5 Although Ms. E~ apparently paid the taxes, insurance, and “necessary upkeep,” pursuant to an understanding with Ms. N~ and Ms. B~, this was insufficient to perfect a life estate. See Sanders v. Cammack, No. SA-07-113, 2007 WL 7240716 (Me. Super. Apr. 4, 2007) (defendant did not have a life estate even though his sister allowed him to live on her property so long as he paid the taxes and insurance and kept the property in good condition; rather, defendant was merely a tenant at will).

In addition, this office is aware of POMS SI DAL01130.100(B)(2), which states that a district office may establish that an individual has home ownership because of an equitable life estate where all of the following factors are met:

  • The individual owned the home in which he/she now lives; and

  • The individual deeded the home to another individual, and the deed did not provide for a life estate, usufruct, dower, or courtesy; and

  • The individual continues to live in the home after it was deeded to another; and

  • All individuals (i.e., seller and buyer) involved in the deed agree it was their intent at the time the home was deeded that the individual who deeded the home could continue to live in the home for the remainder of his/her life.

These four factors are met in this case. However, POMS SI DAL01130.100 is specific to the Dallas region, and is contrary to Maine law as discussed above. Moreover, the Dallas OGC office indicated to this office that POMS SI DAL01130.100 may be unreliable, thus the Dallas office is reevaluating POMS SI DAL01130.100.

Finally, although this memorandum is not intended to offer legal advice to Ms. E~, Ms. N~, or Ms. P~, it is worth noting that these three individuals could probably perfect a life estate in Ms. E~’s favor simply by drafting and recording an appropriate deed. In cases addressing a purported life estate based on parol evidence, such as the Laflamme and Sanders cases cited above, there is usually a dispute between the party claiming the life estate and the record owner of the property. This case, in contrast, is unique in the sense that both the party claiming the life estate (Ms. E~) and the record owners of the property (Ms. N~ and Ms. B~) all agree that they intend for Ms. E~ to have a life estate.

CONCLUSION

Based on the above, it appears Ms. E~ does not have an equitable ownership of the property in question.


Footnotes:

[1]

Based upon facts related in a memo dated December 23, 2010 from Ann M. B~ to Robert T~

[2]

Ms. E~ provided a copy of a deed dated November 22, 1996, which grants property in Brooks, Maine to Ms. N~ and Ms. P~. It is assumed that this deed conveyed the property at 75 Purple Heart Highway, Brooks, Maine, despite the lack of any reference to that address in the deed.

[3]

Both Ms. E~’s statement and Ms. N~’s statement indicate that Ms. E~ deeded the property “shortly after” her husband’s death. The deed, however, indicates that Mr. E~ died in 1984, and the property was not transferred until 1996.

[4]

It is assumed that Melissa B~ is the same person as Melissa P~.

[5]

Ms. E~ might also have perfected an ownership interest by making valuable permanent improvements to the property based on the oral agreement with Ms. N~ and Ms. B~, see Tozier v. Tozier, 437 A.2d 645, 649 (Me. 1981), but there is no indication that Ms. E~ made such improvements.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1601615022
PS 01615.022 - Maine - 05/24/2011
Batch run: 05/24/2011
Rev:05/24/2011