There really is nothing for you to do. She creates a will that leaves the house to you or deeds the house to you now and retains a life estate. She needs to consult an attorney, you don't need to to anything unless she does the deed way, which is not really typical.

Once you actually inherit the house then you decide whether to sell it, keep it, etc.

I've just been through this and believe me, I learned a lot. If your friend has a revocable trust (I believe it's also called a living trust) and has the house deeded to the trust & the trust stipulates that you are to receive this home when she dies, then things will go much more smoothly and will cost much less than if she leaves the home to you in her will. The trust will avoid probate, which can take months and months and will cost a great deal of money for legal costs (in some states it will cost a percentage of the estate).

So I have arranged my affairs so that my property is held in a trust. When I die, my children can record the property into their names immediately and will not have to go through the probate system.
It has been my experience that some lawyers don't recommend using the revocable trust, so you may need to interview several in order to set up this type of estate planning. Good luck
Susan

Thank you all for your comments and information. I should have added that we most certainly will be living in this house, if it were to all go smoothly. We would have no interest in selling the property.

Someone else forwarded me the following information. I'd be grateful for opinions and comments.

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Please, please talk to a tax accountant about how you can inherit the house without a tax problem. Specifically, ask about a "transfer on death." A TOD is not the same as joint ownership with right of survivorship.

Your friend would need to retitle the deed on her house from this ownership: "Jane A. Doe, a single woman"
to this: "Jane A. Doe, Transfer on Death to Harold and Maude Greenleaf, husband and wife." To change the title on a deed, Jane Doe just needs to fill out a form and pay a processing fee at the county tax office. You don't really need a lawyer to do that for you--it also does not put Jane Doe in any danger of losing her property because the transfer does not happen until she passes away.

At her death, the house ownership slides over to Harold and Maude upon the presentation of the death certificate to the county assessor's office or whatever office keeps records of home ownership and real estate taxes. The value of the house to you is the value at the date of her death. Legally, this method is NOT an inheritance and avoids some of tax crapola that surrounds inheritance. it is also not a gift, so gift taxes do not apply either.

She can also retitle her car and any of her bank accounts, including brokerage, in the same manner so that the property goes immediately to the other owner, not into probate, upon her death. The property needs to be re-registered to the TOD owner, but all it takes is a death certificate to prove that the transfer of ownership has taken place.

I just inherited a house on a TOD. This person wanted to "give" it to me prior to death, but I did not want to take any of her assets into my name for many reasons, but mostly because I think an elderly person should never feel like they are living in "somebody else's house" and then worry whether it may be sold out from under them. (I've seen that horrible situation happen).

My costs were less than three hundred dollars to have the attorney take care of the transfer issues at the recorder's office and it avoided the probate process entirely. Most of all, it gave the owner complete control over her own property, because, to the best of my understanding, TODs are revocable. If she ever changed her mind, alls she had to do was pick up a phone.

I think how this person does it, if she is of sound mind, should be between her and her attorney. I would, in your situation, be very uncomfortable with making any suggestions about how she should handle her transactions, because it is a more than subtle suggestion of protecting your own interests. If you inherit it and it does come to pass, I'm sure she would be pleased to know you intend to make it your home. I would imagine she took that into consideration. Like somebody else said, it's not a good idea to count on future gifts. They may .......or may not........come to fruitition.

Thank you for sharing your experience. I appreciate it.

We are certainly not counting on this to happen. Rather, we're thinking of it as a dream. Sometimes they come true. Sometimes they don't. :)

I think the Transfer On Death (TOD) is a deed. It gets recorded just like a regalar deed, but property transfer doesn't take place until after the death. However, I think only a few states allow TOD. I think some states have just recently added them.

These sound wonderful - and I am hoping that more states add these soon.

If I were in your shoes, I'd want to funnel info to her as "how to make sure you wishes, whatever they are, are followed" and steer her to an attorney that specialized in estate-planning.

With info perhaps on categories to investigate--will, TOD, revocable trust, etc.

With my mother-in-law being her best friend, I'm sure she's steered her in the proper direction. My MIL is very knowledgeable about these things. But MIL knew before we did about her wish to give us the house. I'll check with her to see what else the conversation entailed. We've been in shock since we found out and simply haven't really talked it out with her or MIL.

I'll look into CT law for TOD.

It's very important that your friend consult an elder law attorney because if she transfers assets to you for a certain period before she might need to "spend down" her other assets in order to be eligible for Medicaid (not Medicare, every older person is automatically eligible for that) to pay for end of life health care (like nursing home care which is not paid for by Medicare) she could be in trouble for having deeded property to others. There are ever-increasing look-back periods to determine if someone has given away assets in order to qualify when they otherwise might not have. It can be a real mess. Only an elder law attorney will know the ins and outs of your states' Medicaid rules. And only an elder law attorney would be qualified to advise your benefactress on what is the best way for her to make sure she has what she needs for the rest of her life, plus does what she wants with her remaining assets.

It is probably not in your best interest to have your Mother (even if she was a qualified elder law attorney) giving advice to her friend that results in a benefit for you, her son and DIL. Even though you believe your friend may have outlived her other close relatives, it's possible that more-distant kin and potential legatees will emerge. They could argue that the advice your Mother gave, even if not professional, was exerting too much undue influence and contest the bequest. And that would waste a lot of time - and boatloads of money, to sort out.
The very best advice both you and your Mother can give your family friend is to speak with an elder law specialist. It's not usualy as expensive to consult one as people imagine, and a modest sum spent now could potentially save many thousands later.

Molly~

By now, they all could be gone.