Let them take everything?

[4720 OWNER]

Actually that is a pretty typical story for dementia. Been there, done that. Not only did mom have dementia but dad had a inoperable brain tumor and made all sorts of weird decisions on her behalf, including shielding her from docs that could have helped her. State got it all, he willed to her, she to him, noone else.

Get the social worker and step carefully away. Sad but true. You can care but can get over your head very fast. Be very careful you do not become a guarantor on her medical care in any fashion.

 

[rox]

Actually that is a pretty typical story for dementia. Been there, done that. Not only did mom have dementia but dad had a inoperable brain tumor and made all sorts of weird decisions on her behalf, including shielding her from docs that could have helped her. State got it all, he willed to her, she to him, noone else.

Get the social worker and step carefully away. Sad but true. You can care but can get over your head very fast. Be very careful you do not become a guarantor on her medical care in any fashion.

4720 OWNER If I may say, that is an awfully odd will for people with children to make. They each willed to each other and no one else? So when they both passed any assets went to the state? Did an attorney draw that up? I kind of wondered about your earlier post but now I understand your point of view.

 

[chh]

Unfortunately that is a will that is too commonly used as a single will. It is not an estate plan for sure though it can be part of an overall plan.(One to the other to a final estate after the second passes away.) My parents had that type of one to the other simple will for years, it would have only created huge problems if it had been used and they finally realized that and created a pretty good estate plan a couple of years before their health started going downhill. The plan did not make everyone in the family happy, but it did carry out most of their wishes.

 

[2manyrocks]

In which state does your aunt live? In some states, the lender has to file a lawsuit against her to obtain a court order for the house and land to be sold at court auction. Other states like TN allow a sale after a foreclosure sale notice has been sent to her and published in a local newspaper for 3 weeks.

Many of the national chain lenders have so many foreclosures in so many states that their communication process is just terrible.

After the sale is over, the buyer (tends to be the lender) will send her a letter demanding that she move her stuff out or they'll either set it in the street or take it to the dump.

You ask a realtor/auctioneer to look at the land and the building contents and advise you whether an auction sale would be worthwhile to your aunt. That would help you make an informed decision whether to let it go or try to have a sale. Ask him to write you a short letter summarizing his recommendation for your files.

I'd just suggest writing the tennant/squatter/moocher a certified mail letter saying the bank is about to foreclose and that continued storage of anything of his at your aunt's is at his sole risk and responsibility.

You probably should verify that she obtained a chapter 7 discharge order in her bankruptcy that discharges her from liability to the lender. Doesn't sound like she has any assets for them to attach later anyway, but if she has received a discharge order in bankruptcy, the lender can't recover anything from her. You can check with her former attorney or ask the clerk of the bankruptcy court where you can find the order.

Does this help?

 

[Richard]

I feel your frustration and applaude your willingness to try to do the right thing for your aunt and the rest of her family. Maybe I missed it but why doesn't her "don't sell anything" son have POA instead of you, her nephew? Will you also be executor of her estate? No matter what you do in either capacity I think it will be impossible to make everyone happy and only attorneys will come out ahead.

I don't know the actual reason other than she says her son is essentially disorganized. In truth, it actually worked out better that I do it since he works in a machine shop and is essentially busy 8 hours a day during business hours. I push a pencil at a desk so I can quite easily be on the phone bird-dogging something that I need to find out about (no offense to Bird )

I will not be nor do I intend on being the executor of her estate. My POA will dissolve when she passes and at that time, I'll let her son take care of everything else.

All I've really been doing is making sure her insurance policies are up to date with updated beneficiary information (100% to her son). She's been very clear to me that she wants him to get anything that she has so I've been getting things orgainized to that effect.

I've also been changing her checking account to a "POD" account. POD is a "Pay on Death" designation so when she passes, it will revert to him owning it and will not have to pass through probabate.

I'm not an attorney but I'd suggest that anyone/everyone look into little tidbits like that. "POD" (pay on death) for bank accounts and "TOD" (transfer on death) for non-IRA brokerage accounts.

 

[rox]

I've also been changing her checking account to a "POD" account. POD is a "Pay on Death" designation so when she passes, it will revert to him owning it and will not have to pass through probabate.

I'm not an attorney but I'd suggest that anyone/everyone look into little tidbits like that. "POD" (pay on death) for bank accounts and "TOD" (transfer on death) for non-IRA brokerage accounts.

Richard- I didn't knowo about those type of bank accounts. We will be visiting our Wisconsin banker next week. I'm going to ask him about these.

 

[dooleysm]

There is a local lawyer that does a short segment on the radio everyday at 5 that I listen to on the way home. She has dealt alot recently with wills and probate and death related issues. According to her a joint savings or checking account will accomplish the same thing. When one of the people on a joint account dies, all money in the account belongs entirely to the other person, regardless of what the deceased's will may say.

I believe it was the same for real estate as well, though I'm sure that's the kind of thing that can vary by state.

 

[Richard]

Richard- I didn't knowo about those type of bank accounts. We will be visiting our Wisconsin banker next week. I'm going to ask him about these.

Rox, POD & TOD are more of account designations, as in titling. What it is essentially doing is (like your IRA account I hope) simply putting a designated beneficiary onto the account and in so doing, will allow that item to pass directly.

You can have a JOINT account (let's say Rox & Mr. Rox) that is also a POD/TOD (POD are bank accounts, TOD are brokerage accounts that are non-IRA type)

Anyways, the POD/TOD would be to a child for example and NOT to the joint owner. This way, if one of the joint owners dies, the account passes to the other joint owner and on their passing, will pass on to the designee. If something happens to both owners (car crash) then it goes straight to designee.

 

[Richard]

According to her a joint savings or checking account will accomplish the same thing. When one of the people on a joint account dies, all money in the account belongs entirely to the other person, regardless of what the deceased's will may say.

I believe it was the same for real estate as well, though I'm sure that's the kind of thing that can vary by state.

I think that's a valid point however, (and this is not legal nor tax advice to anyone reading )

If Rox owns a house. Let's say she paid $50,000 for it and today with all her olives, it's worth $1,000,000. If she put me as her child, on as joint owner then she has also given me one half of her cost basis.

Meaning, if she passed the next day (probably from eating too many olives ) then I'd own the $1,000,000 house BUT I'd have a cost basis of about $525,000 in it. I'd have her original cost basis divided by two plus the step up amount at her demise.

I'd suggest that I'd RATHER inherit the house with a $1,000,000 cost basis and get the entire step up in value tax free.

So, in bank accounts (savings, checking) Joint might be fine. The 'downside' of making it joint is if the son/daughter is a ner-do well, then they'd have full access to the money. also, if they got divorced or in a car wreck, their half of the account would be their asset and could potentially, have a claim slapped onto it. Keeping it NON joint, but POD keeps that risk out of the equation and still gives them immediate access at the passing of the owner.

In real estate or brokerage accounts (non-IRA type) then I'd suggest you might want to stay away from joint since it might make more sense to pass on the stepped up cost basis rather than to share it.

 

[rox]

Richard- I like the POD option. My husband and i are joint on everything and although my children are great I see no reason to make them joint on our accounts. The POD I like a lot. Since our son will be getting the farm while we still are alive I'm sure my daughter will get everything else when we are gone so I would make her POD on all accounts. Which reminds me we do ahve our kids as equal benificiaries on our stok broker accounts I should probably change that to jsut my daughter. e need to do estate planning, well more than planning executing an estate plan, over here in France. The inheritance tax over here is a pill though. I think it is only 300,000 Euros pass tax free and after that the kids need to pay inheritance tax. We seriuly need estate planning and have been talking about it. We have wills made in USA but if we die in France which is likely, those US Wills are not recognized. Next eyar we need to get that done. Pray there is no plane accident on September 9th going from Nice France to Chicago as we have not made the estate plans we need to do.

 

[Richard]

Rox, obviously I don't know all of your situation but... if you own anything here in the US then instead of just having wills made, I'd look into having a living trust.

I don't know that it would make the most sense in your case and I'm not an attorney that deals with them.... I AM however, going to be staying in a Holiday Inn express next week when I travel to Arkansas!!! (true!)

So, the important thing in my opinion would be to find an estate attorney and I'd ask him about a trust and if he poo-poos a living trust, I'd personaly want him to convince me why it's a BAD idea.

Remember....all your stuff is going to have to go through probate. That is the direction a will is taking you.

If a trust makes sense in your situation (I personally think everyone should look into one) then anything that the trust owns (and of course, you'd put near everything into it) can bypass probate and the associated expenses of that process.

Not to mention, the goings on of a trust will be kept private where as the probate process is public domain, as I understand.

Sounds like you're halfway there since you seem to know how things are to be divided when it gets passed on....now all you need to do is find out how to do that the most efficiently and you're done!!

 

[Richard]

So, the important thing in my opinion would be to find an estate attorney and I'd ask him about a trust and if he poo-poos a living trust, I'd personaly want him to convince me why it's a BAD idea.

Let me explain that a bit further...

I've been in meetings with attorneys OR, been meeting people who have met with the attorneys and the people have been told in essence "you don't have enough assets to need a trust"

That might clearly be true HOWEVER, I personally think there are two sides to why someone might want to have a trust.

First... if married, then you can preserve the estate exemption for one of the spouses when they pass. The remaining spouse still keeps ALL the assets for their beneficial use however, on the demise of the first spouse, you can put an amount up to their exemption into their half of the trusts name (which the survivor spouse still controls and benefits from) When the second spouse passes, both halves of the trust go to the beneficiaries and the exemption for the first spouse is preserved.

Why is that a specific bite in my behind? My father in law has a large farm, probably easily worth over 4 million today. When he bought it, it was joint with his wife and not in any trust. They had a traditional will where everything went to the spouse.

When she passed, had it been in a trust, her part, let's say 1 million could have been preserved in the trust as part "B", still owned/controlled by him. Today, if he passed HIS value of the trust would be 3 million (his 2 million plus her 1 million)

Her 1 million exemption could have passed to their kids and (today) his 2 million exemption could pass to the kids, totalling 3 million exempt from estate tax.

As it is, her half went to him and now, he can pass his 2 million so they'll have to pay estate tax on 2 million instead of 1 million.

He essentially pissed away $500,000 in estate tax.



What if someone's net worth is 1.5 million and the exemption is 2?

Well...maybe finacially you don't need a trust. There is also the practical and emotional side....

I put it this way....

Would you today... want to go to the courthouse & deal with the pain in the neck of changing the title to your home? Then go to the department of motor vehicles & change the title to your car? Then go to the bank & change the title to your CD's & checking? Then go to your broker and change the title to your brokerage accounts?

No I'd bet. That is a royal pain in the hiney

Now... how would you like to not only be FORCED to do the above, BUT have to do it while also dealing with the court system and needing a bunch of legal papers? (as executor)

I'd suggest to you that it's FAR easier for the proper owner of the assets to waltz in and with a stroke of their pen, change the title of something (move it into the trust) than the executor of the estate being required to deal with court documents in addition to the above. Please don't forget that if you deal with a brokerage account, you ALSO have to bring in (in some states) state tax waivers as well as provide a court certified letter of testementary that is LESS than 30 days old. OOps on you if that letter of testementary is 32 days old because you'll be marching your hiney back down to the courthouse to get a fresh one.

If dear ole mom & dad simply signed forms & put things into a trust, then the successor trustee essentially walks into the bank/brokerage firm, other... hands them a death certificate and a copy of the trust (which they'd actually have on file) and then can with a stroke of their pen, start to make decisions for the trust assets.

It greatly relieves what I've seen as simple emotional turmoil during a time when the beneficiaries are already going to be in a very bad emotional state (from having lost you)

So, go see an attorney and if he says a trust makes sense, do it. If he says it doesn't make "financial" sense, so be it, but remember, there is more to it than the simple financial aspect of it.... I presume you love your kids and don't want them to be burdoned more than necessary.

Again, I'm not an attorney. All the above is just from experiences I've seen over the last 20 years, including some related to myself.

 

[4720 OWNER]

4720 OWNER If I may say, that is an awfully odd will for people with children to make. They each willed to each other and no one else? So when they both passed any assets went to the state? Did an attorney draw that up? I kind of wondered about your earlier post but now I understand your point of view.

Dad did not get anything from his family so he felt the kids should not get anything from their parents as well. It was a Walmart will, did not believe in attorneys or insurance, or banks much. For what it is worth, $500000 went to the state that would have paid for it all anyway. Oh well, he earned it on his own so he can do what he wants.

 

[rox]

Dad did not get anything from his family so he felt the kids should not get anything from their parents as well. It was a Walmart will, did not believe in attorneys or insurance, or banks much. For what it is worth, $500000 went to the state that would have paid for it all anyway. Oh well, he earned it on his own so he can do what he wants.

4720- you should have put a comma in $500000. I had to take my finger and move it over the screen to make sure I was reading it right. Insert human whistle sound here- Sorry for saying it but that is cold man, that was really cold. To turn your assets over to the state when you are not even around anymore rather than your own children, that's cold. You seem to have come to terms with it and I bet you will never ever do that to your own children. Our family on both my husband's side and my side werre not wealthy enough to leave anything to anyone. It is only my parents generation that will be the first generation to actually have anything to will to anybody. My husband's mother is poor and always has been. She gets a subsidized studio apartment in a Senior building and her children take care of her. My ister in law brings her over dinner each and every night. What a daughter. She is 91 and she doesn't look like she will be leaving us any time soon. She gets a small check every month from the government I don't know perhaps 200 to 300 Euros I month, just a guess on my part how much but I know it is not much and her only bill is her telephone bill. Our family has never dealt with will and estates before becuase nobody had an "Estate" soI appreciate the conversation about it. My parents have a trust and I know my brother will be executor and since both my parents are relatively healthy it is not anything I think about.

 

[SPIKER]

what was mentioned above is very true about the trusts ect. as one of the guys I work with (he is ~45) and has worked his dad's farm since a boy old enough to walk. his mom died ~5+ years ago, his dad re-married to a much younger woman (infact he went to school with his NEW mom) and she has since pretty much taken every thing from his dad & his dad is in pour health. the FARM is going to be sold and put into a JOINT account so that SHE gets every thing when his dad dies! Now dave has worked this land farmed it for last 40 years prety much and will end up with nothing from the farm... His dad won't even sell it to him for anything less than what SHE thinks it is worth!...

SO if you DO have some net worth that you want to go to the kids the trusts set up BEFORE one of the parents dies is much better way to go...

Markm

 

[rox]

what was mentioned above is very true about the trusts ect. as one of the guys I work with (he is ~45) and has worked his dad's farm since a boy old enough to walk. his mom died ~5+ years ago, his dad re-married to a much younger woman (infact he went to school with his NEW mom) and she has since pretty much taken every thing from his dad & his dad is in pour health. the FARM is going to be sold and put into a JOINT account so that SHE gets every thing when his dad dies! Now dave has worked this land farmed it for last 40 years prety much and will end up with nothing from the farm... His dad won't even sell it to him for anything less than what SHE thinks it is worth!...

SO if you DO have some net worth that you want to go to the kids the trusts set up BEFORE one of the parents dies is much better way to go...

Markm

You know that is a real issue, the remarriage of a surviving spouce. But on the other hand it is the assets of the parents to do with as they wish. I always think therre is trouble brewing when kids "plan" on inheriting. For myself I have always though, "Well it is their money" If the second wife gets it all well that is what the father wanted. No doubt she made him very happy or he woulsn't have done it that way. It is far better to works towards building up your own estate than concentrating on what you "might" inherit, IMHO.

 

[2manyrocks]

Kids of the first marriage v. stepmom--happens all the time, especially if the husband and his lawyer haven't planned to deal with it in advance before the husband dies. Wifey won't like any estate plans that cut back on what she sees as hers whether it is good estate planning or not.

We've all heard it before. "She made her money the old fashioned way. She married it."

 

[LBrown59]

even if they foreclose, its my understanding that you (someone) are still the hook for the balance of the loan. If the load was for 80K and they auction for 50K you (someone) still owes the bank 30K.

..

An individual is never obligated to pay the expenses of an estate.
If there is not enough money there the party owed is simply Sol.