The "People Power" Disability-Serious Illness-Senior Citizen Superbook:
Book 10. Senior Citizens Guide 2
(Money, Housing, Products)
Table of Contents
Chapter 1. Aging Related Money Issues
Power of Attorney Info
Sibling Support Agreement
Advancement Clause
Conservatorship Proceeding
Reverse Mortgage Info
Reverse Mortgage is a Bad Deal
Reverse Mortgage Websites
Save on Income Tax
Glossary of Terms
The Will Info 1-2
Holograph Will
Joint Will Info
A Mutual Will Info
The Executor of the Will
Change the Will Info
Contest the Will Info
A Will After a Second Marriage
Will Websites
Canadian Will
Ethical Will Info
Estate Planning 1-3
Federal Unified Tax Credit
Joint Tenancy With Right of Survivorship/ JTWROS
Tenancy by the Entirety
Gifting; Gifts & Taxes 1-2
Chapter 4. Probate, You Can Avoid Most of It
The Probate Process
Probate Websites
Avoiding Probate
Death Benefit Claims
Disinheriting Someone
Inheriting Money Info
Disclaiming an Inheritance When You Owe Money
Life Estate/ Sale Leaseback
Life Insurance & Estate Planning
Leave Money to Pets/ Pet Trust
Chapter 6. Estate Planning Resources
Estate Planning Websites
Estate Planning Resources
Estate Planning Law Websites
Financial Planning Websites
Inheritance Loan/ Probate Cash Advance
Will Forms
Using Trusts to Protect Assets
Trust Resources/ Trust Websites
Trust Forms
The Living Trust Avoids Probate 1-2
Living Trust Basic Form
Living Trust Warnings
Living Trust Websites
Chapter 3. Other Types of Trusts
Marital Life Estate Trust/ A-B Trust
Asset Protection Trusts
Bypass Trust Info
Children’s Trusts
Income Trust Info
Irrevocable Life Insurance Trust
Land Trusts
Medicaid Trusts
Qualified Personal Residence Trust/ QPRT
Qualified Terminable Interest Property Trust/ Q-TIP
Special Needs Trust Info
The Spendthrift Trust
Trusts For Inheritances
Other Types of Trusts
Chapter 4. Charitable Remainder Trust (CRT)/
Charitable Remainder Unitrust (CRUT)/ Charitable Remainder Annuity Trust (CRAT)
CRT/ CRUT/ CRAT
CRT/ CRUT/ CRAT Websites
Private Annuity Trust Info
Chapter 1. Retirement Money Basics
How to Age Gracefully Financial-wise
Retirement Money Info
Retirement Money One-Liners
Free Retirement Plan Guides
Major Senior Money Websites
Senior Money Websites/ Retirement Planning Websites
State Property Tax Exemption For Senior Citizens
Chapter 2. Retirement Savings Plans Info
Retirement Savings Plan Basics 1-2
Quick Look at Retirement Savings Plans
Retirement Savings Plan One-Liners
Lump Sum vs. Monthly Payments
Irs Publications & Tax Forms For Retirement
Retirement Calculator Websites
Retirement Tax Credit Info
Withdrawing Money From Retirement Plans
Early Withdrawal Info
Chapter 3. Specific Retirement Savings Plans
Working For Someone/ Defined Contribution Plan Like the 401(k)
Contribution Plan Websites
Roth 401(k) Info
403(b) Plan Info
Tax-Sheltered Annuity (TSA)/ Form of 403(b)
457 Plan/ Deferred Compensation Plan
AARP Investment Plans
Retirement Plan for Federal Government Employees
Self Directed Annuities
Supplemental Retirement Plans/ Serps
Variable Life Insurance Info
Business Setting up a Retirement Savings Plan
Chapter 4. Self-Employed Retirement Savings Plans
Self-Employed Retirement Savings Plans
The Keogh Retirement Plan/ HR 10 Plan
Simplified Employee Pension Plans/ SEPs
Savings Incentive Match Plans For Employees/ SIMPLE
HR-10 Plans Info
Chapter 5. Individual Retirement Accounts/ IRAs
Traditional Individual Retirement Accounts/ IRAs
Rollover a 401(k) into an IRA
Traditional IRA Websites
Roth IRA Info
IRA Conversion Into a Roth IRA
IRAs For Kids
The Real Estate IRA
Self-Directed IRA Account Info
Spousal IRAs
The Stretch IRA/ Multi-Generational IRA
Chapter 6. Company Pension not Social Security
Workplace Pension Plans/ Registered Pension Plan (RPP)
Employer Matching Info
Leaving a Company Before Retirement
Company Pension/ Defined Benefit Pension Plan
The Employment Retirement Income Security Act/ ERISA
Pension & Welfare Benefits Administration
Pension Benefit Guaranty Corporation/ Government Pension Insurance
How To File A Claim For Pension Benefits
Survivor & Death Benefits
Fired to Save Pension Costs
Federal Employee Retirement Benefits
Pension Websites
Pension Law Websites
Chapter 7. Company Money Benefits Info
Employee Stock Ownership Plans (ESOPs)/ Stock Purchase Plans
Deferred Profit-Sharing Plans/ DPSP
Book 2. The Senior Living Arrangement; Home or Assisted Living
Chapter 1. The Caregiving Process
Everybody Will Care For an Elderly or Disabled Person
Caregiving/ Eldercare 1-4
Caregiving One-Liners
You Might Have to Support Your Parents
The National Family Caregiver Support Program (NFCSP)
Chapter 2. The Caregiver Has to Take Care of Themselves Too
A Caregiver’s Bill of Rights
The Caregiver Needs Help/ Caregiver Support Groups
Chapter 3. Caregiving Resources
"Find Caregiving" Websites
Major Caregiving Websites
Caregiver Websites/ Caregiving Websites Caregiving Organizations
Caregiving Resources
Family Caregiver Websites
Set up a Caregiver Website
Leeza’s Place Community Centers That Help Caregivers With Knowledge & Support
Chapter 4. Eldercare Resources
Eldercare Websites/ Senior Care Websites
Hire a Profesional Geriatric Care Manager/ Elder Care Consultants
Chapter 5. Elder Mediation Basics
Elder Mediation Info
Mediation Websites
Volume 2. Homecare, Getting Help to Live at Home
Chapter 1. Medical & Nonmedical Homecare
Homecare 1-3
Resident Care Info
Check Out a Home Worker
Butler/ Personal Assistant/ Household Manager
Chapter 2. Homecare/ Senior Care Resources
Hire a Private Nurse
Hire a Home Caregiver
Homecare Agency Resources
Homecare Company Lists
Homecare Companies/ Eldercare Companies
Homecare Websites
Homecare Resources
Regional Home Health Intermediaries
Social Health Maintenance Organizations/ S/HMOs
Chapter 1. Live in a New Place Where They Help You
Assisted Living Facilities Basics
Nursing Homes Info
Checklist for Nursing Homes & Assisted Living Facilities
Assisted Living Websites
Elder Living Info
Social Help Info
Some Government Programs
Chapter 2. Senior Housing Basics: Healthy, Assisted & Disabled
Senior Housing Websites
Senior Housing Resources
Senior Cohousing
Group Homes Info/ Retirement Homes Info
Group Home Living Websites
Shared Homes For Seniors/ Home-Sharing
Elder Cottage Housing Opportunities/ ECHO Housing
Aging in Place Community Info
Chapter 3. Adult Daycare/ Respite/ Places That Babysit Adults
Adult Daycare/ Adult Respite
Adult Daycare Websites
Australia Adult Daycare Centers
British Adult Daycare Centers
Canadian Adult Daycare Centers
Respite Care Info for Children & Adults
Respite Resources
Respite Websites
Chapter 4. Continuous Care Retirement Centers
Continuous Care Retirement Centers/ CCRCs
Continuous Care Retirement Center Websites
Continuous Care Retirement Centers by State
Chapter 5. Nursing Homes Basics
Hospital, Nursing Home Accreditation, etc.
Compare Nursing Homes
Nursing Home Websites
Nursing Home Resources
Nursing Home Neglect/ Nursing Home Abuse
Nursing Home Watchers, Evaluators, Critics
State Nursing Home Citizen Advocacy Groups
State Survey Agencies
Chapter 6. Long-Term Care Info
Longterm Care Basics
Longterm Care Websites/ Chronic Care Resources
Long-Term Care/ Nursing Home Insurance
Longterm Care Insurance Websites
Home Healthcare/ HHC Provision of an LTC Policy
Long-Term Care Insurance Companies
State Longterm Care Ombudsmen
Senior Law/ Elder Law Info
The Spousal Impoverishment Act/ The Medicare Catastrophic Coverage Act
Chapter 8. Retirement Communities/ Homes
Independent Living Info
Places to Live Based on the Presence of a Retirement Community
Naturally Occurring Retirement Communities/
NORC
The Logistics of Retirement Communities
Active Adult Communities/ 55+ Housing Retirement Community Websites
Some Random Retirement Communities
Retirement Communities by State
Retirement Home Websites
Senior Citizen Real Estate Websites
Housing Websites
Low Income Housing Info
Housing Law Websites
House Counselors
Fair Housing Info
Urban Homesteading
Book 3. Products & Equipment That Help Disabled People & Senior Citizens
Chapter 1. Products for Disabled People
Disabled Products Info
Senior Products For Sale
Disability Product Websites/ Disabled Product Websites
Equipment for Disabled People Resources
Equipment for Disabled People Products
British Disability Products
British Mobility Products
Chapter 2. Assistive Technology/ Adaptive Technology/ Disabled People Get Equipment
Assistive Technology Info
State Assistive Technology Offices
Major Assistive Technology Websites
Assistive Technology Websites/ Adaptive Technology Websites
Assistive Technology for Students at School
Government Websites For Assistive And
Accessible Technology
Disability Software Info
Text-to-Speech Software
Chapter 3. Disabled Person Using a Computer, on the Internet
Make a Website Accessible to Disabled People
Computer Accessibility Websites/ Accessibility Software
Accessible Websites to Get Internet/ Website Accessibility for Disabled People
Chapter 4. Specific Products for Disabled People
Learn About Assistive Products
Accessible Cars & Vehicles
Adaptive Clothing/ Disability Clothing For Sale
Alzheimer Products For Sale
Automatic Faucets For Sale
Bedside Commode/ Portable Toilet For Sale
Braille Books/ Audio Reading Materials For Sale
Books for People With Disabilities
Cognitive Aids to Help Remember & Think
Custom-Made Disability Devices
Diabetes Products For Sale
Emergency Response Alert Alarms For Sale
Find Misplaced Things Remote Locators
Food Devices For Sale
Lift Chair For Sale
Mobility Product Websites/ Scooters & Stuff
Reading Aids For Sale
Speech Devices For Sale
Speech Recognition Products For Sale
Stairlift in the Home
Toys for Disabled Kids For Sale
Vision Products For Sale
Wheelchairs For Sale
Chapter 5. Disabled People Home Safety
Make a Home Safe
Make a Home Accessible/ Home Modification
Accessible Home Modification Websites
Home Safety Modifications/ Make Your Home Safe For an Alzheimer's Patient
Safety for Disabled People
Disabled & Mobility Knowledge Websites
Assistive Domotics/ Home Automation For The Elderly And Disabled
Chapter 6. Making Building & Homes Accessible
Public & Commercial Buildings Accessibility/ An Accessible Society Websites
Accessible, Adaptable Housing Design
Accessible Real Estate/ Disability Real Estate
Chapter 7. Disabled Housing/ Disability Housing/ Independent Living
Disability Housing/ Housing For Poor & Disabled
Independent Living Info
Independent Living is Living at Home/ Home Independent Living
Independent Living Websites For Seniors & Disabled
Independent Living Organizations
Independent Living by State
Chapter 1. Aging Related Money Issues
Power of Attorney Info
Power of attorney is a written document authorizing another person to act as one's agent or attorney. You give one person the authority to act on someone else's behalf in legal affairs.
If you want to have your affairs administered by someone else for whatever reason, for example, if you go south every winter, you simply sign over your rights to a friend or hired professional to do it.
Older parents sometimes give Power of Attorney to one of their children who manages their financial affairs for them. Because they're aging, they know they may become mentally incapacitated at some point in time so they create a power of attorney to give someone close and trusted the power to make decisions for them.
This Attorney in Fact handles monetary and real estate transactions. You can end the contract by either tearing it up or writing a new one up.
For large amounts of money, it's better to get two people to act as joint Attorneys in Fact. This might keep one from stealing all the money but it's just as easy for the joint Attorneys in Fact to steal the money together as a team.
Power of Attorney is simpler than going to court to get a conservatorship.
A power of attorney can be general for several or all of your affairs and give the trustee discretionary powers or it can be specific, for example, giving someone the power to write and deposit cheques on your checking account.
A General Power of Attorney gives the Attorney in Fact control over everything the person owns.
A Limited Power of Attorney gives the Attorney in Fact control over just the assets specified.
Either of these two types of Power of Attorney can fall into either of these three classes:
Durable. The power of attorney stays valid even if the grantor becomes incapacitated.
Regular. When the grantor becomes incapacitated, the power of attorney becomes null and void.
Springing. The power of attorney springs into effect when a doctor certifies the grantor as incapacitated.
A power of attorney is simply a document giving someone else the authority to handle some of your affairs signed and dated by the both of you and having a clause about what to do in the event of the creator's death or disability, typically, to terminate it.
It should be notarized although this is not necessary. Banks usually have power of attorney forms for their customer's transactions.
If the transfer of real estate is involved, the power of attorney document should be witnessed and recorded such as with your local county clerk's office so there will be no problems when your trustee wants to make some real estate transactions. When the power of attorney ends, you should inform all parties involved.
lawguru.com, forms.
lawdepot.com, power of attorney forms.
legalhelpmate.com, power of attorney forms
en.wikipedia.org/wiki/power_of_attorney
Sibling Support Agreement
When children care for their ailing parents, in order to keep everything clear, they can get together with an elder law attorney and hammer out an agreement as to who does what to help the parent.
Some of the factors are:
Who pays for what bills.
Who gets access to the parent's money, real estate and pension income.
Who takes the house over.
Who will inherit what.
The agreement should give the supporting sibling more of the inheritance than the siblings not helping out or set aside some of the future inheritance to cover his or her expenses now.
The main supporting sibling is the one who takes the dependency tax exclusion and any deductions on their income tax returns. This should be on the agreement.
The Sibling Support Agreement can have conditions in it in case of in-fighting among the siblings. It can have a provision for a specific type of mediation or outright disinherit someone if they are too greedy.
With a Sibling Support Agreement, there are no secrets. It's all out in the open.
Advancement Clause
Competent parents can make up any type of conditional contract they want to disinherit someone if that person causes too much trouble. For example, they may put a provision in that anyone who contests the will will be immediately disinherited.
Conservatorship Proceeding
Conservatorship proceedings are state court adjudications where a conservator is appointed to manage someone's money and act as their guardian. It costs between $3000 to tens of thousands of dollars.
The person who wants to become a conservator does the paperwork for the court then they have to prove the parent or person is incompetent to make their own decisions by getting doctors and psychiatrists to act as their witnesses. They have to pay these professionals for their time as expert witnesses. They also have to pay the lawyer handling the paperwork.
Other interested parties, like siblings and heirs have to be notified so they can show up and contest it if they want. They can claim that the parent is competent to manage his or her own affairs or try to have themselves named conservator.
The court appoints a guardian ad litem who makes a lifestyle plan to protect the incapacitated person. They investigate the situation to see if there is a potential for fraud. This guardian makes the decision on what will happen and earn several thousand dollars to do it.
That's why conservatorship proceedings aren't very good. You pay several thousand dollars and give some outsider the power to make the big family decisions.
If the plan is approved, the conservator has limits on how he or she can spend the money.
Reverse Mortgage Info
Reverse mortgage loans or home equity conversion loans are loans where you exchange the equity in your home for monthly payments to you or a loan usually in exchange for the equity in your house when you and your spouse die.
This is usually for older folks who work out a deal with a lending company who gives them a monthly paycheck or line of credit in return for either full payment or the house itself when the estate is processed later.
Reverse mortgages are available to people sixty-two years old or older. The deal is that they give you a lump sum fee of about 40 to 50% of the house or regular monthly payments in exchange for recovering this loan principal plus interest when the house is eventually sold, often after the owner(s) die. It is a financial instrument to help older people who are house rich and cash poor.
They are expensive and though lenders are required to disclose all details, read them over carefully to avoid getting ripped off.
The Federal Housing Finance Board sponsors these "Home Equity Conversion" mortgages.
Before you sign, be sure you understand all the terms and conditions. Interest rates on this type of loan might be higher and are charged on a compound basis.
Application fees, points and closing costs also might be higher than other types of loans. Interest rates are not deductible on your income taxes until you repay the loan in full. There will be less equity for you and your heirs in the future. Make sure you're getting a fair market value for your house. How will it affect your taxes.
The four basic types of reverse mortgages are:
Simple reverse mortgage, they give you a lump sum or installment payments.
Reverse annuity mortgage, you simply get an annuity, monthly payments for whatever time period you agree on.
Reverse mortgage line of credit, they give you a credit limit, you're entitled to borrow up to your limit, being charged interest on whatever amount you take out.
Shared appreciation reverse mortgage. A provision is written into the contract that says the reverse mortgage will receive a higher value if the property increases in price during the term of the reverse mortgage. In exchange, the reverse mortgage money will either offer more equity or a lower intererst rate.
Reverse mortgages end:
When the house is sold.
When the homeowner decides to move permanently.
When the fixed term expires.
When the home owner dies.
When the homeowner violates the contract.
Generally, loans are not considered income, so getting a reverse mortgage should not affect eligibility for most government programs.
Be aware of the compound interest on a reverse mortgage.
Books about reverse mortgages are at #332.722 or HG2040.45 at the library.
For more information or to file a complaint, contact:
Department of Housing And Urban Development
Office of Single Family Housing
451 Seventh Street, S.W.
#9282
Washington, D.C. 20410
202-708-3175
888-466-3487
hud.gov
hud.gov/buying/reverse.cfm, list of approved mortgage lenders.
hud.gov/reverspr.cfm
Reverse Mortgage is a Bad Deal
Here are some costs for a reverse mortgage;
Appraisal fee: $200 to $400
Closing fees and administration charges: $2000
Lawyer's fees: $500
Interest rate is one to two percent higher than ordinary loans.
Repayment penalty most likely if you sell or move out of your home within three years of getting the reverse mortgage.
A reverse mortgage is not really worth it.
An easier way is to sell the house to a relative. This person lets you stay in the home and pays you a monthly mortgage.
There are four major bad points about reverse mortgages:
1.) With a reverse mortgage, you can get a lump sum payment of about 30 per cent of the value of the house but you have to get a home appraisal and independent legal advice at your own expense plus the fact that there are closing costs.
2.) There is no payment on this loan until death but the interest compounds and is added to the balance. This interest rate is generally about three points higher than the interest rate on a conventional loan.
Most interest rates are adjusted so they generally go up when evaluated every year if interest rates go up as a whole. All in all, if you have heirs, a reverse mortgage is an expensive way to go. In all likelihood, there will be very little for them.
3.) Another disadvantage of reverse mortgages is that you're stuck there unless you're willing to take a penalty for getting out of the deal. You might want to move or get sick and have to move into a nursing home. About a half of all people get out of their reverse mortgage within seven years of getting it.
4.) The mentality of reverse mortgages is bad. You get your lump sum, you splurge then it's gone and what happens if you have a real life emergency.
Furthermore, there are many little rules about what you can or can't do with the house like rent a part of it out. In some contracts, the company gives itself the right to terminate the contract and collect on the loan.
My advice is to read every line of the contract. Ask for a blank copy to bring home with you since I have yet to see a copy on a reverse mortgage website. I presume the reverse mortgage companies don't put them up because they don't want people to read them through, line by line.
Reverse Mortgage Websites
nrmla.org, reverse mortgage lenders' trade association
reversemortgagefhaloans.com, the truth about the reverse mortgages, loan modification and fha loans for first time home buyers
reversemortgageguides.org
aarp.org/money/revmort
dre.ca.gov/reverse.htm aarp.org/hecc
aarp.org/revmort, 800 209 8085
americanreverse.com
answers.com/topic/reverse-mortgage
benefitscheckup.com
chip.ca, info@chip.ca, 800-563-2447, reverse mortgages canada.
en.wikipedia.org/wiki/national_reverse_mortgage_lenders_association
en.wikipedia.org/wiki/reverse_mortgage
ftc.gov, booklet facts for consumers; reverse mortgages.
hud.gov/buying/rvrsmort.cfm
investstockonline.com/archives/449
longtermcarelink.net/eldercare/using_reverse_mortgage.htm
retire-4-life.com
reverse.com, 800 500 5150
reverse.org
reversemortgage.com
reversemortgage.org, national reverse mortgage lenders assn.
reversemortgage.vivaprime.com
reversemortgagedaily.com
reverse-mortgage-information.org
revmtg.com
safewaymortgage.com, reverse mortgages for senior citizens in georgia, alabama and south carolina.
seniorlendingnetwork.com
thecatalyst.com
vermontfunk.com, reverse mortgages for senior citizens in vermont
wisconsin-reverse-mortgage.com
trinityreversemortgage.com
AARP Home Equity Information Center
601 E St. Nw
Washington, Dc 20049
800-424-3410
aarp.org/hecc
aarp.org/revmort, 800 209 8085
Free booklet, Home Made Money, Consumer's Guide To Home Equity Conversion and a state by state listing of lenders.
Fannie Mae
Public Information 3900 Wisconsin Ave. Nw
Washington, Dc 20016
800-688-Home
800-732-6643
fanniemae.com
Will give you a list of local reverse mortgage lenders.
Federal Housing Finance Board
1777 F St. Nw
Washington, Dc 20006
Federal Reserve Bank of Philadelphia
Public Information
Pob 66
Philadelphia, Pa 19106-0066
215-574-6458
frb.gov
Free booklet, Paying Off A Loan Early.
hud.gov
888-home4us
Free list of reverse mortgage dealers.
National Center For Home Equity Conversion
360 N Robert #403 Saint Paul MN 55101
651-222-6775
reverse.org/nchec
They publish a book about reverse mortgages and offer a list of all reverse mortgage lenders in the country.
National Consumer Law Center
18 Tremont St.
Boston, Ma 02108
617-523-8010
Fax: 617-523-7398
consumerlaw@nclc.org
consumerlaw.org
Free booklet, Usury & Consumer Credit Regulations.
Reverse Mortgage Locator
800-997-2358
Newsletter of banks/ lenders that offer such mortgages.
Some reverse mortgage lenders are;
Canadian Reverse Mortgage
877-742-2447
Homefirst
800-538-5569
Home Income Security
Louisville, Ky
800-942-6550
Household Senior Services
800-414-3837
Individual Reverse Mortgage Accounts
Mt. Laurel, Nj 800-233-4762
Offers reverse mortgages in eight states.
Providential
San Francisco, Ca
800-441-4428
Transamerica Home First
800-538-5569
transamerica.com
Save on Income Tax
When you retire, move to a state with no personal income tax like Florida and while you're checking that out, check out state sales tax, find the states that have the lowest income tax and state taxes that you would like to live in and pick one.
Glossary of Terms
Administration. Court supervised distribution of the probate estate of the deceased. The person who manages this distribution is called the executor if there is a will or an administrator if there is not.
Beneficiary. The person or organization legally entitled to receive gifts made under the provisions of a legal document such as a will or trust.
Codicil. An amendment to a will. It is a separate legal document, properly witnessed and executed.
Corpus. Property owned by the trust, commonly referred to as "corpus of the trust".
Death taxes. Amounts levied on the property of the deceased called estate taxes (federal) and inheritance (state) taxes.
Durable power of attorney. A general power of attorney that will continue to be valid afterts maker becomes incapacitated or incompetent.
Durable healthcare power of attorney. A special power of attorney in which the maker gives another person authority to make healthcare decisions when the maker is unable to do so, due to injury or sickness.
Estate. In general, all of the property you own when you die.
Estate planning. The legal maneuvering by which one dies with the smallest taxable and probate estate possible, with the ability of passing on your property to your beneficiaries with the least amount of hassle and expense.
Intestate. To die without a will or other valid estate transfer device. Estate will go through probate and be passed to heirs who are specified in the applicable state's laws.
Irrevocable trust. A trust that cannot be changed, once established, except by court action in a proceeding referred to as reformation.
Joint tenancy. A form of property ownership by two or more people where the death of one owner causes the transfer of that individual's share to go directly to the remaining owner(s). A will has no power to change the joint tenant's right of survivorship. This is another common tool used to avoid probate, although there may be gift tax consequences.
Living trust. Trust established while the maker is alive and which becomes immediately effective. It remains under the control of the maker until death. It allows property to pass to beneficiaries free of probate.
Living will. A document that provides instructions to physicians, healthcare providers, family and courts as to what life prolonging procedures are desired if a person should become terminally ill or be in a persistent vegetative state and unable to communicate.
Personal property. All property other than land, buildings attached to the land and certain oil, gas and mineral interests.
Per stirpes. A legal term meaning that if a person dies, the inheritance will pass to heirs in equal shares. It means "by right of representation".
Pour over will. A will that transfers the decedent's assets that are subject to the will to a trust that was already in effect prior to the decedent's death.
Power of attorney. A legal document whereby, a person authorize someone else to act for them.
Probate. Court proceeding in which the authenticity of a will is established, an executor or administrator is appointed, debts and taxes are paid, heirs are identified and property in the probated estate is distributed according to the dictates of the will.
Revocable trust. A trust that can be changed by the trust maker at any time. Living trusts are revocable trusts.
Settlor. Another name for a maker of the trust, also-called "trustor", "grantor" or "creator".
Tenancy in common. A form of joint ownership of property. Each owner is able to sell or give a way his or her share of property, as well as pass it along separately at death. There is no right of survivorship.
Testacy. Dying with a valid will in place. All property controlled by the will passes through probate.
Testamentary trust. A trust created by a valid will.
Trust. A legal arrangement under which one person or institution controls property given by another person for the benefit of a third party.
Trustee. The person who or institution which, manages the trust and its property under specific instruction.
Will. A legal document that is used to pass property to heirs following a person's death. A will only becomes effective at the death of its maker.
The Will Info 1
At least half of all American people will die without leaving a will. The way the system is set up makes it a bad move for the heirs if you don't have one.
Even if you're poor, you could suddenly get struck down in an accident and leave heirs to the positive end of a large wrongful death lawsuit. If you don't leave a will, your estate goes to what's called Intestate.
They will try to divvy it up to your relatives but if they can't find them, the property goes to the state. If you die without a will, the state determines who gets custody of your children under 18.
The first thing to do is to sit down, take an inventory of everything you own and put a dollar value on it. This is called your estate and includes:
Residence.
Real estate.
Business personal property including partnership interests, copyrights, patents, trademarks, stock options, etc.
Vehicles, boats, etc.
Bank accounts and CDs.
Investments; Stocks, mutual funds and bonds.
Safe deposit box contents.
Time shares.
Life insurance.
Retirement accounts; IRAs, 401k, esps, Keough.
Business interests.
Personal things like clothing and furniture.
Jewelry.
Anything else.
Then, list your liabilities by name and the amount you owe, including:
Personal loans (credit cards, bank).
Mortgage loan(s).
Taxes due, current or past.
Life insurance loans.
Other personal debts.
Add all of these numbers up to arrive at your total liabilities. Subtract your liabilities from your assets to arrive at your net worth. This allows you to place a value on your estate.
You can see how close your estate is to the current federal tax limit. You can separate property by titled ownership and non-titled property. Knowing where you are in valuing your estate is an excellent start to your estate planning program.
The basic elements of a will are:
Your name and place of residence.
A brief description of your assets.
Names of spouse, children, other beneficiaries such as charities or friends.
Alternate beneficiaries in the event a beneficiary dies before you.
Specific gifts such as a car or a house.
Establishment of trusts, if desired.
Cancellation of debts owed to you.
Name of an executor to manage your estate.
Name of a guardian for minor children.
Name of an alternative guardian just in case.
Your signature.
Witnesses signatures.
You don't need a lawyer to make a will, just common sense. If your estate is not more than the current federal tax limit and not extensive, you should be able to get by without a lawyer.
State laws govern what makes a will valid. Generally, the conditions are:
Must be at least 18 years old.
Must be of sound mind.
Must be typewritten.
Must clearly state that it's your will and must be dated and signed by you.
Must be witnessed and signed by at least two or more people who do not inherit anything from your passing.
The will should appoint an executor.
The will must state at least one provision of property transference, i.e., I leave everything to my wife, Annie.
State an alternative heir in case the first one dies.
State debts owed to you.
Name guardian for children under 18 with a second choice just in case.
It doesn't have to be filed anywhere in order to be valid.
Put your fingerprint on it for good measure.
It doesn't have to be notarized, however, witnesses sometimes sign an affidavit before a notary public. Witnesses don't have to know what's in the will just that you are making it.
Lawyers can be expensive, lazy and not in your best interest. That means they really don't give a damn about you and may even try to cheat you. Be careful when picking one.
To save money on legal fees, your local legal aid society could help you if you're low income. Law schools sometimes offer legal clinics to the public. The federal government helps people with its Legal Services Corporation. You could try the AARP's legal service, aarp.org, or simply hire a paralegal.
County court offices usually handle wills and probate matters. Call your county court and ask about specific conditions regarding wills.
Other considerations are disposal of body, pets and conditions such as my son receives $30,000 upon graduation from college with a bachelor's degree.
Keep several copies of the will with one in a metal, fire proof box. When you die, the state only has the authority to open your safe deposit box unless it's jointly rented so it may not be the best place to keep your will.
If you move to a new state, check to see if their laws affect the legitimacy of your will.
If you're hiding money or you get a safety deposit box, tell someone or leave a note somewhere where they will find it.
Consider a common disaster clause in case you and your spouse both die.
If you put general statements in your will, you're inviting fights among your heirs. Be specific.
If you're scared that if you leave your wife a bunch of money, she will squander it and not leave it to the children, request a mutual will or a trust stating conditions on spending the money you leave her and who she will leave it to upon her death.
If you don't leave a will, after probate which can waste a lot of money, the money goes in this order to your spouse, descendants, relatives, government.
You can minimize or even eliminate a will therefore probate by putting everything in joint ownership or a trust.
A will becomes a part of the public record when it goes to probate. Anybody can look at it.
Consider new technologies, both computer software, ready made will kits and Video-tape wills. This is probably the best way to prevent challenges, to video tape yourself of sound, mental mind when making your will and stating such. Verify what's in your paper will.
You could also write a personal letter of instruction, though not a legal document, that instructs your family what your personal wants are.
If you have children, get a will made and name a guardian because if you die tragically, it will save a lot of hassle for them.
Try #346 at the library.
The Will Info 2
Many more women than men die without leaving a will. Even if your husband takes care of the finances, make it a point to make up a separate will for yourself. Beware of joint or mutual wills. Each spouse should make up their own separate will.
The reason to make a will is because without it, your relatives have to go through probate where a judge decides who gets what.
You never know when your time comes. It only takes an hour or so to make a will. Verbal commitments are meaningless. Put it on paper. You can probably get by with a free or cheap online will form but if you have lots of money or children and several ex-wives, make a will with a lawyer.
The basic tenets are:
Who will inherit your property.
Who will serve as guardian to care for your
minor children.
Who will manage the property you leave to your
minor children.
Who will serve as executor of the will.
A will could be as simple as, "I leave everything to my wife."
Holograph Will
A holograph will is a will entirely written in handwriting by the testator, dated and signed. It's legal in most places.
Joint Will Info
A couple makes one will for both of them. It usually leaves everything or almost everything to the living spouse and may give a few things away to others and have a provision for when the remaining spouse dies, the money will be given to the children.
The problem is that when the first spouse dies, the joint will goes into probate where the conditions are frozen until the second spouse dies. What if you want to change the will?
Why even bother with a joint will. Get all the big things you own in joint ownership then there's no probate hassles.
A Mutual Will Info
A couple each makes up a separate will that are almost identical, that they will leave everything to their spouse.
The Executor of the Will
In writing your will, you have to name an executor, somebody trusted like your spouse or a friend, to oversee your estate after death. The executor must be an American citizen over 18 who hasn't been convicted of a felony. He is legally obligated to act in the best interests of the deceased following the instructions of the will to the best of his ability.
If the estate is large, you may opt to choose a professional like a lawyer or an accountant to oversee your will for a fee usually 4% of the estate. Being an executor can be a lot of work.
Pick someone who's willing to devote the time to work through the probate process diligently and fairly. The best way is probably to name a trusted family member and a professional who then gets only 2% of the estate.
The executor should get the following paperwork:
Letter of assets.
Letter that says who'll get your minor personal stuff.
Your will.
List of any income coming in like rental income.
Car registration forms.
Bank account information.
Business interests.
Citizenship, birth, marriage, divorce, prenup and adoption papers.
Insurance policies.
Investment accounts.
Jewelry, expensive possessions.
Loan, debt and credit information.
Military discharge papers for veteran benefits.
Pension, possible death benefits.
Pet information, who gets pets.
Power of attorney forms.
Real estate deals.
Retirement accounts.
Safety deposit box.
Savings bonds.
Social security information for benefits.
Tax returns.
Titles to anything that requires a title like a boat, RV, etc.
Trusts.
An executor's responsibilities are:
Get the will.
Get a lawyer if you need one.
File the probate action with the court. Look in the phone book for the address then go and get the application form.
During probate, keep track of expenses.
Get 10 copies of the death certificate and copy of will to bring to court.
Contact all parties in the will.
Contact insurance companies if they have claims to pay out.
Notify financial institutions of the death.
Make an inventory of the safety deposit box.
Work through any will challenges.
Once the will is deemed valid by the court, you can start to pay off debts and inheritances. Arrange for publication of notice to creditors and a mail a notice to each known one.
Send notices of the person's death to the post office, utility company, banks and credit card companies.
Inventory, appraise and oversee assets.
Collect debts owed to the estate.
Check with the deceased employer for unpaid wages, vacation pay, pension fund, etc.
File for Social Security, veterans' and civil service benefits.
File for life insurance benefits.
File city, state and/ or federal income tax returns.
File state and federal death tax returns.
Pay bills and claims against the estate.
Pay taxes, including income and estate taxes.
Settle debts.
Get the estate together until the property is dibursed. Disburse it at the appropriate time.
Act in the best interests of the deceased.
Mediate between squabbling heirs.
Pay off the heirs and get receipts.
The executor is legally entitled to receive pay for his services.
Cancel credit cards, accounts, magazine subscriptions, etc.
Finally, do the paperwork closing the will.
Go to court and end he probate process.
Things your executor needs to know are:
What and where all your assets are and how to collect them.
Copy of will, cemetery plot, marriage and divorce licenses.
Copies of all retirement plans which owe money/ death benefits.
Name of income tax preparer.
Names of insurance agent and insurance policies.
All investment certificates and the broker who sold them if applicable for liquidation.
List of valuables.
Debts owed to you by anyone including the IRS.
Copies of gift tax returns.
How to stop co-owners of accounts and safe deposit boxes from plundering them.
Financial statements of any businesses you own.
If someone's been named an executor to a will and they can't or won't do it, they must file a Declination with the court. The contingent executor then steps in. If there is no contingent executor, the court appoints one.
A good idea for the intelligent disbursement of your will is to name two co-executors, a family member and an expert like a lawyer.
Appoint a backup estate executor and attorney.
Consumer Information Center
Pueblo, Co 81002
888-878-3256
pueblo.gsa.gov/cic_text/money/executor/ pueblo.gsa.gov/cic_text/money/executor/executor.htm
Booklet about being an executor.
Change the Will Info
You may change your will in the event:
You feel like it.
Your assets change significantly.
You divorce or remarry.
You have a child.
You move to a different state.
The executor of your will dies, gets very sick or has a falling out with you.
One of your heirs dies or gets very sick.
The laws affecting your estate change.
Changes can be made with a separate document, called a codicil, that is witnessed just like a will but a better way is to destroy the current will and draft up a new one.
This is necessary if your marital status changes, one of your beneficiaries dies, you change your mind, your executor moves away, your estate changes drastically, etc.
If you make a new will, state in it that you are revoking all other past wills.
If you're mentally incapacitated, someone might contest the changes.
Contest the Will Info
Anybody who makes a will doesn't want anyone contesting it. Put a no contest provision into your will that says anyone who contests or objects to the will gets nothing.
Besides that, make the will fair such that everybody feels they got what they deserved. Be clear about everything.
If somebody contests the will, the judge listens to the argument in probate court then makes a judgment.
It's not just family who contest the will. If the person owed a business or other person money, that person can come forward and provide evidence that this person owed him money.
The most common reasons people contest wills is because they feel someone else got a lot more than them that they thought should have been more equitable. It gets messy with multiple spouses, stepchildren, etc.
Some people try to claim the guy was mentally incompetent or someone put undue pressure on him when he was writing the will.
Sometimes a person unintentionally forgets one of his children in the will. The court assumes that this happens and gives money to the omitted child.
If you were a child of someone with a lot of money who doesn't believe he's your father, get a DNA test done, preferably while he's alive to determine paternity.
You can minimize or even eliminate a will therefore probate by putting everything in joint ownership or a trust. This way, nobody can contest anything.
In some areas, your death has to be published in the local newspaper either in an ad or obituary to give possible creditors a chance to come out of the woodwark and contest the will.
A Will After a Second Marriage
After a second marriage, you more than likely have an ex-spouse, new spouse, kids from the first marriage, step-kids and new biological kids so your best bet is to sit down, think it through and write it out.
Call an attorney to review the will and sign it. Put the will in a safe place like the attorney's office, a friend's place or in a bank's safe deposit box. Tell one family member where the will is located.
If you have a prenuptial agreement, your will should be consistent with it.
Update the will every five years or as conditions change.
If there are minor children involved, make a provision for a guardian.
Spell out provisions for the children of the former
marriage clearly.
Make special provisions like a trust for special needs children.
Put in a provision for personal prized possessions like antiques, books, jewelry, etc.
Make insurance policies' beneficiaries the same as in the will.
Make the survivors' benefits on bank accounts agree with the will.
Consider probate and taxation costs to minimize these costs to the survivor at the time of death.
Will Websites
You can buy will forms that you can have sent to you in the mail or download a file and print them out. Some are free.
buildawill.com
legacywriter.com
legalzoom.com
suzeormanwillandtrust.com
cancer.org, will creation toolkit sign-up.
drleonards.com
easylegalforms.com
willsonline.com
ethicalwill.com
ezlegal.com, 800 822 4566
fedpubs.com
findlegalforms.com
firethelawyer, will legal forms $5.95.
formslegal.net
freebusinessforms.com
freewillforms.com
itsmylife.com
kahntaxattorney.com
lawdepot.com
lawlizard.com
legacywriter.com
legalformsbank.biz
legalhelper.net
legalhelper.org/will.aspx
legalhelpmate.com/last-will.aspx
legalwillforms.org
legalzoom.com, 323 962 8600
living-trusts.net/will-kit.html
makeyourwill.com
nationaldirect.net
nationallawforms.com
nolo.com
nolo.com, 800 728 3555
standardlegal.com
thewillexpert.com
urgentbusinessforms.com
uslegalwills.com, 866 317 9306
willdrafter.com, make a will.
willsforamerica.com
American Bar Assn.
Commission On Legal Problems of The Elderly
1800 M St. Nw
Washington, Dc 20036
202-331-2297
202-331-2250
800-793-2665
abanet.org
Offer legal advice about wills and probate. Ask for publications list. They will help you for reduced fees.
Metlife
1 Madison Ave.
Nyc 10010/
Pob 829 Nyc 10159-3950
800-Met-Life
metlife.com
Free pamphlets about wills, etc.
Nolo Press Legal Books
950 Parker St.
Berkeley, Ca 94710
510-549-1976
800-992-Nolo
800-846-9455
800-445-NOLO, CA.
nolo.com
Personal Lawyer Computer Software
800 Sw 37th Ave.
765
Coral Gables, Fl 33134
305-445-0903
U.S. Will Kit
800-511-5575
Video
Modern Talking Picture Service
5000 Park St. N.
St. Petersburg, Fl 33709
813-541-7571
Video about living wills, etc.
Will Planner Computer Software
Pob 3085
Englewood, Co 80155
303-770-2380
Will Maker Computer Software
950 Parker St.
Berkeley, Ca 94710
800-992-Nolo
800-846-9455
nolo.com
Canadian Will
legalwills.ca
Canadian Will Kit
800-448-6394
Ethical Will Info
An ethical will is a will you make up describing your life and values, asking your family members to honor your memory by following the advice you offer in it.
An ordinary will is about the disposition of material possessions at death. An ethical will is a summary of life a person creates to pass his or wisdom onto their relatives.
Think of it as writing a love letter to your family.
freeethicalwill.com
ethicalwill.com
Estate Planning 1
You should learn about estate planning simply because large amounts of money are consumed by estate taxes, fees and other expenses when loved ones die. Many people work all their lives then end up barely spending a few hours learning how to preserve that wealth.
If you have a reasonable amount of money, you should do some learning about estate planning on your own, hire a competent accountant, an attorney and a good tax man to get them all to run through a plan of what you should do with your money in the estate planning sense.
These experts cost money but they might have a tivbit of information that will save you much more money than it costs to hire them.
The golden rule is to educate yourself now no matter how old you are and get it all in order such that your next of kin knows all about it when you pass on.
Two things are certain; that the laws regarding death taxes and probate are always changing which is why you should look them over every five years or so and after you make your will, you should go over it every several years to revise it.
Your estate is your accumulation of wealth over a lifetime. Many people go through life and never bother taking stock of what they're worth in material terms then when the inevitable happens as in the case of accidental death or even old age, they leave a mess for their loved ones or they simply plan poorly and the heirs end up paying out a lot of death taxes or inheritance taxes.
No matter how you do it, it's a good idea to get something down on paper as to exactly what you're worth and what you want done in case of death or extreme disability.
Probably the second biggest tragedy after death itself which is a natural process anyway, is the fact that people don't prepare and tell their heirs what's going on. In a nutshell;
Get all your paperwork together.
Make up a will and trusts if applicable.
Learn about estate planning, especially about taxes if your estate is valued at over the Current Estate Tax Exemption Value.
Sit down and tell your kids about what to do after you die.
Get medical and health insurance.
If you have dependents like a wife and children, you should sit down and write out a list of all your assets so they will know exactly where to look should you die.
Estate planning books are located at #346.73 in the library. Nolo Press at nolo.com publishes a book called Plan Your Estate which breaks down some of the state laws regarding estate/ death and inheritance taxes and sells for about $20.
Do a lot of the learning and the paperwork yourself. Most estates aren't very complicated and just require the filling out of rote forms, hence, you may not even need a lawyer. A paralegal might do.
If you need a lawyer, your family lawyer might do but if you have an extensive estate, consider getting a referral for a specialist estate lawyer. They could save you a lot of money by finding loopholes to avoid probate and estate taxes. One way to get a referral is to ask at the trust department of your bank because they deal with lawyers all the time.
If you go to your local bar association, they will just give you a list of names so you should interview several before you decide to hire one.
Lawyers are notorious for prolonging probate so that they can continually collect fees. Marilyn Monroe's estate took 18 years to settle and when it was all over, lawyers took about a million dollars of her 1.2 million dollar estate.
Anybody can call themselves an estate planner and go into business without any formal education or licensing so don't trust self proclaimed estate planners unless you know them well.
You can do most of your estate planning yourself if you know what you're doing but most people generally get two people to prepare their estates, a lawyer and an accountant and some also get a financial advisor.
If you have an ethical advisor commited to serving their client, they will save you money but if they're just rubber stamping all their many clients through, they will just do the minimal paperwork and not look for tax breaks specific to you.
Make a will, sign things over in joint tenancy so when you die, ownership goes to the living spouse and give your close relatives power of attorney over your assets (like accounts) to avoid hassles by probate at death. Do all these things properly so they're legal. If you make the will yourself and skip one thing, it could be rendered null and void so follow the rules.
Educate yourself about social security, doubly so if you're a veteran. Do some research on your own before you buy insurance because the costs can get quite high. Decide on how much you need and how much you can afford and strike a middle balance in there somewhere.
Check with the company you work for to find out if they have life insurance or coverage plans in the event of your death. Group insurance plans are almost always cheaper than going out on your own.
The first decision you have to make is whether you're gonna play according to Uncle Sam's rules or not. Estate planning is so complex because of the government and its taxes.
Use your head, quietly play by your own rules, know what you're doing and you don't have to give the government any of your money in estate or inheritance taxes if you liquidate before you die and quietly hand it off to heirs.
As you get older, keep the Current Estate Tax Exemption Value in mind. You don't pay federal estate taxes on the value of your estate if it's below the Current Estate Tax Exemption Value.
Anything above that and you pay taxes up to 55%. Note that this value will increase as time goes on.
Try to give away your assets before death. If you're married and on paper, one spouse owns more than the Current Estate Tax Exemption Value and the other not, try to balance the ownership out to as close to the Current Estate Tax Exemption Value EACH as possible to avoid estate taxes upon death.
A popular scheme is to sprinkle your assets into several trusts to maximize tax-free benefits for each of your heirs.
In my opinion, the easiest way to deal with your assets if you're wealthy and old is to put most of them in offshore accounts out of the United States and include a Power of Attorney form with them giving someone else ownership when you die. This is if you want to avoid estate taxes.
Your best bet is to provide for your wife with a trust upon your death and give away the rest of your wealth quietly while you're alive with the least amount of paperwork as possible. In order to keep it legal, give away chunks valued at less than $11,000 per person per year.
If you go over this, you're supposed to file Tax Form 709, the Gift Tax Return. (see below)
You're allowed to leave as much you want to your spouse tax-free but that just leaves the pressure on her to get the estate below the Current Tax Exempt Value before she dies in order to avoid paying estate taxes.
In the event that you will probably have to pay estate taxes, work it out with your bookkeeper so that you leave x amount to your favorite charity which will deprive the government from getting the money.
To keep your assets until death then pass them off right away to your heirs, put of bunch of stuff in a safe deposit box with instructions to the bank to turn all rights over immediately upon death. Or better still, keep your assets in a private corporation safety deposit box as opposed to a bank safety deposit box paid with cash to keep the IRS snoops away.
The IRA is taxed when you die. Life insurance benefits aren't. Take your money out of the IRA, buy some life insurance and give the rest away to your relatives.
The Estate Tax Exemption is no good if you leave everything you own to your wife, she dies with possession of your two million which is now taxed for about $900,000. Use your estate tax exemption to give the money to your kids. That way your wife won't end up with it with the money being taxed on her death.
Estate Planning 2
When planning your estate, there are a number of snags you could get into regarding disbursement of your assets either before or after death. Probably one of the biggest is trying to give an equitable amount to all your children.
Your assets are not like straight money so there will probably be bickering and jealousy if you leave one child the house, the other the car, the other some money, etc.
A good way is to leave instructions like bequeathing a certain percentage of the proceeds from your estate to your heirs, for example, you could instruct that the house be sold and each of your four children get 25% of the pay-off.
In short, try to divvy up the stuff equally among all your deserving heirs. If you don't want to leave too much of a lump sum to them, you can always draft up a Living Trust or a conditional will where you instruct a trustee like a lawyer or a trusted friend to give those heirs only a certain amount of money every month or every year.
If you have minors or grandchildren, leave money for them most likely in a Living Trust where you can make specific instructions on how to disburse it to them. Do the same for handicapped relatives.
Take care of all custody arrangements like who will care for your children and handicapped relatives in the event of your death. Consider all children from all marriages and all your wives when planning to resolve your estate.
In addition to giving away specific things, you should name a Residuary Beneficiary with an instruction like "Everything Else To ..." which gives that person all the rest of your minor things like clothes, tools, etc.
If you have got a sneaky wife, don't leave all the money to her and expect her to divvy it up among your children fairly. She might decide to blow it all so leave money to each individual specifically.
Don't forget adopted and out of wedlock children. Whatever you decide to do, don't just write it up and then lock it away. Tell your wife, heirs, friends and lawyers specifically about your intentions with them.
Make your funeral and burial plans in advance. If your estate is tied up in a business or property, try to convert some into cash so your heirs will have money to settle your affairs including the dreaded estate taxes if you have to pay them.
A common problem for heirs who inherit businesses is that they're business rich and cash poor then when the IRS does the assessment on the business and they owe hefty estate taxes, they have no money to pay so they have to either sell the business or declare bankruptcy.
If you're in a common law relationship, there are laws which give your common law spouse a right to your estate even if you specify otherwise in a will or trust.
Whether you die with or without a will, most states have laws where the wife and children automatically receive a certain percentage of your estate so if you have been separated but didn't get divorced, your long lost wife could come back to claim a piece of your estate.
If you specifically want to disinherit a child or spouse, don't just leave them out of the will. State that you're disinheriting them.
If you're single, draw up a will with specific intentions just like married people do otherwise the state will end up getting the proceeds from your estate.
You may consider forgiving debts that are owed to you.
There are clauses called Survivorship Periods where you essentially draw up two wills, one that goes into effect if one of your major heirs dies within a short period like one to five years after your death.
There are clauses called Simultaneous Death Clauses where you leave instructions in the event you and your spouse die at the same time.
If you're married to a non U.S. citizen, he or she doesn't get the estate tax exemption in what you leave them when you die but you're allowed to give them $100,000 each year as a tax-free gift.
Buy life insurance to cover death taxes.
You can't will property to minors because they aren't allowed to own property.
If you own property and investments outside the country, try to resolve it before you die because it will take time and cost high legal fees to take care of it after death unless you have power of attorney forms already signed giving someone else ownership when you die and this other person presents a death certificate to the relevant authorities.
If you own holdings in two or more states, you will have to file probate in each of those states so try to get rid of what you own in everything but one state.
Make sure you leave enough liquid money in your estate so that your heirs can pay out expenses without having to sell the house at an estate sale.
If your children are young, you can give them gifts under the Uniform Gift To Minors Act with a custodian watching over it until they reach maturity.
If you're over 55, you get a onetime $125,000 (or whatever the current rate is) exclusion on the gain from the sale of your home using IRS Form 2119.
You're taxed on 50% of Social Security income.
If you're an unmarried, older couple, consider getting married to take advantage of the transfer of assets for your estate.
A popular technique is to sell your home to your children, continue living in it and draw up a bonafide rental agreement with a paper trail of rental payment to keep the IRS hounds off when your estate is calculated later on. If you want to legally get rid of a lot of money, make them charge you a high rental fee.
Buy a home with children or grandchildren or buy a home and rent to children with an option to buy.
Check with a lawyer about putting your life insurance policy into a trust and about what you can do to minimize state death taxes.
Move to a state with lower death taxes.
Private annuities are a situation where you give your children your home, they pay you a monthly fee for life and you pay no estate taxes.
If you have an elderly relative who needs financial assistance, open a custodial account not a joint account which could make you liable for their debts at death.
There's a generation-skipping tax where you're taxed on what you give your grandchildren but there is an exemption of around a million dollars.
If you give your house to your child, he or she must have the title and you must pay rent with a lease agreement in order for the IRS not to pull it back into your estate. Another solution is the Grit Trust discussed elsewhere.
If you have a valuable art collection, consider starting a corporation, donating it to it then your heirs can sell it and keep the money for themselves.
Finally, do research on your own as to how to legally structure your estate but once you have it all down on paper, your best bet is to find a lawyer specializing in estate law to look over and manage your plans to make sure it's all legally sound and if you find a good one, he will know the loopholes to save you money where it counts.
Estate Planning 3
Many people's estates get sued after they die. They have lawsuits levied against them by creditors. Beyond trying to get your estate below the tax exclusion rate (approximately $1.5 million for an individual, $3 million for a couple's estate), you want to take care of your business such that your assets are free and clear of all debts when you pass such that your heirs get it free of lawsuits and other creditor claims.
The most common estate planning methods people use are:
Give stuff away, sign it over to a relative or sell it to a relative for a song while they live.
Make up a will which goes through probate.
Make up a living trust which avoids probate.
Buy a big life insurance policy which immediately pays off to the beneficiaries.
Get all big assets in either joint ownership or as tenancy-by-the-entirety. Most states allow jointly owned property to pass to the surviving joint owner free of all creditor actions against the deceased joint owner.
Buy annuities, the balance of which pass to beneficiaries at death.
Overall, the best way to avoid creditors and lawsuit judgments beyond putting the money into foreign accounts, hiding your cash or putting it in other people's names is to make it hard for creditors to get at it by muddling the paper trail.
There are several ways to do this. Instead of putting one big sum of money in one place, create five or more LLCs, trusts and foreign trusts to spread it out. Just don't forget where your money is.
In order to avoid fraudulent transfer charges, don't make big moves with your assets. Transfer a little bit at a time. It looks like you're just doing an orderly personal retirement savings plan as opposed to trying to fraudulently transfer something.
At the very least, make up a will then update it every three years or so.
Make up a durable power of attorney to take care of both your medical needs and financial/ legal affairs should you become mentally incapacitated.
Make up a living will to deal with the issue of prolonging your life artificially should it ever come to pass.
The more money you have, the greater your need for a professional estate planner, either a lawyer or a consultant. The few bucks you spend on them could save you lots of money.
Federal Unified Tax Credit
Estates have to file the Federal Estate Tax Form 706 upon death. Get the form now and fill it out to have ready when you die. Many people incorrectly underestimate the value of their estates so get it down on paper and be accurate.
The Estate Tax Exemption means that if your estate is valued at under a certain dollar level, you're exempt from estate taxes. If your estate is valued at under the current exemption value, your estate pays no Federal estate taxes. If over the current exemption value, the Federal government takes a piece of it starting at 37% going up to 55%.
A big mistake a lot of people make is that when the husband dies, he leaves almost everything to the wife and when she dies, she now only has half the estate exemption they had as a couple, hence, the if they are wealthy, they should try to get their estate down to below the current exemption value now in order not to pay estate taxes by giving the money away to their children, grandchildren, siblings, etc.
If you as a couple have assets worth more than the current exempt estate tax value, first try to get the estate down to below that value while you're alive by giving it away to your heirs or spending it then disburse your estate into two estates valued below the current exemption value.
When one dies, if the other gets that value, their estate will be taxed upon their death so give it away immediately to heirs instead of passing it on to the wife where it will be taxed later. The alternative to all this, is, of course, to spend your money while you're alive to get below the estate tax rate.
If you own a business which is valued at over the current estate tax exemption value, your best bet is to either incorporate, go public or sell it before you die and quietly give cash disbursements to your relatives to avoid the tax man.
Barring that, change ownership to your heirs while you're alive to work out all the kinks and avoid paying estate taxes upon death. Look into incorporation for the business.
Go to irs.gov or get the following free IRS booklets for the latest information:
448. Federal Estate & Gift Taxes
904. Interrelated Computations For Estate And Gift Taxes
950. Who Must File Gift Or Estate Taxes
As far as I know, the exemption schedule works as follows:
2006-2008, $2 million.
2009, $3.5 million.
2010, temporary repeal.
2011, $1 million.
Joint Tenancy With Right of Survivorship/ JTWROS
Joint tenancy is a form of property ownership by two or more people where the death of one owner causes the transfer of that individual's share to go directly to the remaining owner(s). A will has no power to change the joint tenant's right of survivorship.
Joint Tenancy is the simplest way to resolve someone's estate at death. Simply put everything you own together with someone else like your spouse or children, things like your house, bank accounts and investments. Put their name on it too as part owners along with you.
When you die, they get it all.
The following states have restrictive rules about Joint Tenancy: Alaska, North Carolina, Pennsylvania, Tennessee and Texas.
In joint tenancy cases, the husband's assets will go to the wife then when she dies, the Federal exemption that the couple had before is now cut in half because it's just her, hence, any assets over the current exemption value are taxable by the Federal death tax.
Joint ownership can be risky. For instance, if you put your house in your child's name jointly with you and he gets into deep debt, goes bankrupt or gets in an accident and has a lawsuit filed against him, they can come and take the house away from you.
There are federal estate taxes and state inheritance taxes on interests received by survivorship in joint tenancy with right of survivorship.
answers.com/topic/right-of-survivorship
avoid-probate.com/b-joint-tenancy.htm
danataschner.com/joint_tenancy.html, los angeles lawyer, joint tenancy in common.
en.wikipedia.org/wiki/concurrent_estate
finance.cch.com/text/c10s10d360.asp
financial-dictionary.thefreedictionary.com/joint+tenants+with+right+of+survivorship
gottrouble.com/legal/estate_planning/joint_tenancy.html
home.uchicago.edu/~jmellis/jointtenancy.html
investorwords.com
justanswer.com/questions/12o2l-own-home-deeded-joint-tenancy-w
knoxbar.org/law_line/t15_2401.html
law.jrank.org/pages/9882/right-survivorship.html
library.findlaw.com/2000/apr/1/129100.html
mtgprofessor.com/a, bobbruss/joint_tenancy.htm
nolo.com/definition.cfm
scottlawfirm.com
theonlinelawyer.blogspot.com/2006/10/joint-tenancy-with-right-of.html
uschamber.com/sb/business/p08/p08_7535.asp
wwlaw.com/cpjt.htm
Tenancy by the Entirety
A married couple can enter a Tenancy by the Entirety which means that neither one can transfer the real estate property while you're both alive. You have to both willingly do it together. About 30 states have this procedure.
Gifting; Gifts & Taxes 1
The annual gift tax exclusion allows you to give $12,000 annually per person, tax-free with the provision that the gift is immediately available to the recipient.
You and your spouse together can give $24,000 per person (to each of your children and anyone else) per year without income tax consequences.
If you give away more than $12,000 to a person, you have to file a gift tax return. Over your lifetime, you're allowed to give up to one million dollars of your estate away without paying a tax on it. Anytime you give someone over $12,000 in a year and fill out a gift tax form, this amount over $12,000 is added to the total until you get over a million dollars thenn it's taxed.
There are two types of gift taxes:
Federal IRS
State
The advantages of gifting is twofold.
You take the money from your taxable income and give it to someone in a lower tax category.
You're reducing your estate. Your final goal is to bring your estate down to the current exclusion level, approximately $2 million for a single, $4 million for a couple.
The IRS has some provision where you can transfer a big asset in installments, equalling $12,000 per person per year without tax consequences.
You can give bypass-generation gifts to your grandchildren which have tax consequences or you can form a generation-skipping trust.
If you have creditors, give away your most vulnerable assets before you give away your safe ones.
You can transfer property to a minor child through a children's or minor's trust. A minor's trust is safe from the grantor's creditors if the trust is irrevocable which means it can't be changed and the asset transfers are not deemed fraudulent transfers.
If the child beneficiary has creditors, they cannot be seized until they are actually distributed to him or her.
You can gift assets to a minor child under the Uniform Transfers to Minors Act.
Technically, you're allowed to give away $12,000 (or whatever the current rate is) tax-free as gifts per year per person but you can slide a lot of your estate around that and give it away quietly.
Gifts to spouses are not taxable.
Legally, you and your wife can each give EACH of your children, their spouses and your grandchildren together $24,000 a year tax-free. You give each $12,000 and your wife gives each of them $12,000.
Of course, you can just as easily withdraw cash from your bank account and quietly pass it on to your children.
You're supposed to file Tax Form 709, the Gift Tax Return.
Your best bet as you get older is simply to start liquidating your accounts and give the money to your heirs but keep some around in case of unforseen events like illness or an accident.
If you die less than three years after you give away large gifts, they may be added to the value of your estate.
If you're quite wealthy, get it all as liquid as possible and try to give it away while you live to keep it as simple as possible.
If the IRS hassles you about making large withdrawals from your bank account with nothing to show for it when, in fact, you gave it to your children, you just say you spent it having a good time.
For more devious techniques, refer to chapter on protecting your money.
You can give each of your grandchildren $12,000 a year tax-free too. Under the Uniform Gifts To Minors Act and the Uniform Transfers To Minors Act, you can fill out forms enabling a banker or financial planner to keep the money until the child turns 18, 21 or 25 whichever you choose.
If you name yourself the custodian and die, the money will be considered part of your estate so it's best to name a younger friend or relative as the custodian to avoid estate taxes on it in probate.
Go to irs.gov or get the following free IRS booklets for the latest information:
448. Federal Estate & Gift Taxes
904. Interrelated Computations For Estate And Gift Taxes
950. Who Must File Gift Or Estate Taxes
Like I've already said several times in this book, if you have a lot of assets, liquidate and quietly start giving your heirs cash so you don't leave a paper trail.
If the IRS asks you where the money is for the house you just sold or the stocks you just cashed in a few months ago, tell them you're enjoying your life traveling around, hiring girls for dances and gambling then smile and keep your mouth shut.
Gifting; Gifts & Taxes 2
You can't give your house away without paying lots of tax on it so do the sales-leaseback thing with one of your children as discussed elsewhere and do it while you're at young old age so the IRS can't come in and say the deal was too close to your death and disallow it (within three years).
If there's more than three years between the time of the sale of your house to your kid and the time of your death, they can't nullify the deal and put the house in as part of his estate.
I'm not a great lover of the government, I think we're taxed all to death so if I were an American with a reasonable estate, I'd give most of it away under the table so to speak to my heirs while alive without declaring it a gift on my income taxes.
I'd give them most of my material things like tools, TVs, etc., sell some things like my RV and boat and give them the cash quietly then I'd liquidate my investments, convert them to cash and hand it over to my heirs so there's no paper trail saying I transferred my stocks to my kids.
If any government official asked me what I did with the money I liquidated, I'd tell them I'm gonna die broke as the title of a pop culture money book says, that I have been going around having a good old time gambling it away and watching strippers.
That's my view. Do what you want with it. Remember whatever you die with that's in your estate over the current federal estate exemption value, will be taxed so consciously bring your estate down to under that amount by liquidating and either taking the money to a Caribbean island or Switzerland or giving it to your heirs now.
If you put things in joint ownership (with right of survivorship with your wife, they're automatically passed onto her when you die but when she dies they become part of her estate which will be taxed if she owns more than the current estate exemption value so a better way is to put things in joint ownership with your kids but structure them such that they can't be considered gifts which means you say the kid contributed to the purchase of them.
Your best bet is not to even bother putting your name on the deed of whatever the product is, house, car or anything. Buy a car, put it in your son's name but for all intents and purposes, it's yours until you die. Do the same with a house.
If the IRS want to know where the kid got the money to buy the house outright, he tells them he's been saving all his life and had some good winnings in Vegas recently.
Beware that all this could backfire if your kid dies before you or some tax snoop finds out but chances are he doesn't have much of an estate so there won't be a lot of death taxes involved.
I'm just flying by the seat of my pants with ideas here, some obviously illegal so check with someone else who might know about this stuff before you go through with it.
Chapter 4. Probate, You Can Avoid Most of It
The Probate Process
Probate is the legal process used to settle an individual's estate after they pass on. An individual's assets and liabilities are identified. All his or her debts are paid including taxes then the administrators (attorneys) are paid.
The remaining assets, if any, are distributed to the heirs as stated in the will. If there is no will, benefits are paid in accordance with state law.
Probate takes time to resolve and administrative costs could go ten percent or even higher of the estate. They dragged out Marilyn Monroe's probate process until all her estate was used up in lawyers' fees.
The other big problem with probate is that it is public record. Anyone is allowed to see what assets the decedent had and who inherits what.
Probate is a county court process which oversees your last will and testament and strives to administer it properly, however, it has a bad rap, generally because there's lots of room for abuse.
A lawyer can drag it out, hiring extra workers, doing a myriad of tasks like accounting, appraisal, liquidating, managing, selling, etc. all of which cost money and deplete the estate not to mention the wear and tear on your nerves as the estate goes unresolved for several months, even up to several years in some cases.
Probate can be as simple as filing with the court and receiving the proper certification to administer the will or it can get very complicated especially if there's a sizeable estate and the person died without leaving a will.
The catch-22 of safe deposit boxes are that if they are not jointly owned, they will be sealed upon death until probate gets at them so don't put important papers in there unless your spouse is a co-renter.
If the value of the estate falls below a certain minimum, something like $10,000 to $100,000 depending on the state, you can forego probate entirely and go through a simpler process called Small Estates Settlement.
The bad rap of probate comes from expenses like:
Lawyer's fees.
Court costs.
Filing fees.
Appraiser's fees.
Broker's fees.
Etc.
Halt, the anti-probate organization referred to below, estimates that between 8-10% of the estate on average is lost through the probate process. There are some bitter people out there that have lost it all through probate.
Another bummer of probate is that your estate becomes public knowledge. Anybody can look through the records of your assets. This does not happen with a Living Trust.
If you're a business owner, probate could mess it up if several people want a piece of the business so take care of it before death.
The assets are frozen while the probate process takes place, a year or more though some courts may give the spouse a small allowance during that time.
Basically, the probate process involves finding all your assets and then using them to pay for your liabilities:
Utility bills.
Car payments.
Mortgage payments.
Credit card payments.
Medical bills.
Funeral expenses.
No one is legally obligated to pay another person's debts unless it was a co-signed loan/ credit card. If debts are more than the estate is worth, the court tries to allocate the funds fairly.
When someone dies, they owe taxes on whatever income they earned during the taxable year in which they died. The executor is responsible for filing an individual tax return for the deceased.
The spouse can file a joint tax return if he/ she wants. A separate income tax must be paid on all money made business/ investments which are the property of the estate.
If you start a joint bank account for your children, it's still considered part of your estate.
If you're old, talk to your kids about your money situation. Talk to your parents about your inheritance.
If you give enough money away, you can qualify for Medicaid and to live in a nursing home for free.
Charitable gifts to a charity, religion or educational institution are not taxed.
Life insurance becomes part of the estate, therefore, it's subject to federal estate taxes but you can change your life insurance to a Life Insurance Trust thereby keeping those funds out of your estate.
If you receive property as part of an inheritance and sell it, the gain can be taxable.
After everything has been assessed and debts, claims and taxes have been paid, the executor can distribute the assets according to the will or according to intestate laws if there was no will. When this is done, a final Closing Statement is filed.
In some states, if some items you'll inherit are worth under a certain amount of money, you can file a probate affadavit to get those items now.
In some states, if the estate is under a certain amount, there is no formal court process. The judge just signs it off.
Check out #346.730 at the library for probate books.
Probate Websites
Try #346.71-73 (family law) or KE5974 and KF750 at the library for books on estate planning.
1800probate.com/directory 1800probate.com/resources
nyprobatelitigation.com, new york probate & estate litigation blog.
abanet.org/public.html, public resources
ca-probate.com, california probate, list of probate attorneys in all of U.S.A.
ca-probate.com/links
closeprobate.com, california.
digitalprecision.net/probate_advice
elpasowillsprobate.com, el paso probate lawyer.
estateattorney.com estateplanning.com
estateplanningconcepts.com
estate-planninglaw.com
estateplanninglinks.com
ezprobate.com, probate resource firm.
gaprobate.org, georgia probate courts.
jec.unm.edu/resources/benchbooks/probate/02.htm, probate judges handbook.
law.justanswer.com
lawlibrary.co.riverside.ca.us/probate_trust_resources.htm
myfloridaprobate.com/links_and_resources.html
nevadaprobatelawyers.com/las-vegas-probate-resources.html
pbwiki.com/probate-resources
probatelawyer.biz
probateprince.com, michigan lawyer.
probateresource.com
probateresources.com
probatesf.com, san francisco.
probate-web.com
ranceprobateresources.com
saclaw.lib.ca.us/pages/probate.aspx
scselfservice.org/probate/misc/reference.htm
search-attorneys.com, estate planning, probate & elder law attorneys.
self-counsel.com, wills, probate forms, books, etc.
seniorlaw.com
texasprobate.com
utahprobateattorney.com/resources.cfm
willsandprobate.com wills-probate.lawyers.com
American Bar Assn.
Commission On Legal Problems of The Elderly
1800 M St. Nw
Washington, Dc 20036
202-331-2297
202-331-2250
800-793-2665
abanet.org
Offer legal advice about wills and probate. Ask for publications list. They will help you for reduced fees.
American Academy of Estate Planning Attorneys
800-846-1555
aaepa.com
Nolo Press Legal Books
950 Parker St.
Berkeley, Ca 94710
510-549-1976
800-992-Nolo
800-846-9455
800-445-Nolo Ca.
nolo.com
Trusts & Estates Magazine
Intertec Pub.
6151 Powers Ferry Rd. Nw
Atlanta, Ga 30339
800-441-0294
770-618-0211
intertec.com
Also a Directory of Trust Institutions.
American College of Trust & Estate Counsel
2716 Ocean Park Blvd.
#1080
Sm, Ca 90405
213-450-2033
310-398-1888
actec.org
Membership organization of probate lawyers. Will provide you with a list of local probate lawyers.
American Council of Life Insurance
Information Services
1850 K St. Nw
Washington, Dc 20006
800-423-8000
800-338-4471
800-942-4242
202-624-2000
acli.com
Answer questions and will do a free life insurance policy check for you.
Avoiding Probate
The objective is to avoid probate for your heirs. Give away most of your stuff now. Put your house, car and bank accounts into joint ownership so when you pass, ownership goes directly to the co-owner.
Anything in your estate that's directly signed to a specific person in the event of your death like your life insurance policy goes directly to that person without probate.
Joint ownership is huge because when one owner dies, the other owner takes full ownership without probate.
There are several techniques or procedures you could do to possibly avoid probate on some or all of your property.
I will state them now very briefly, discuss them a little bit later but your responsibility is to learn about them fully by going to other reference material, experts in the field and the creators/ sellers of these instruments.
Have an estate valued at under the state value in order for probate to occur. This value is somewhere between $10,000 to $100,000.
Have all your major assets either in joint ownership or accompanied with a power of attorney form or something similar that states that when you die, this other person takes ownership of this asset.
There are probatable and nonprobatable assets. Probatable assets include titled property solely owned by the deceased. If the deceased plans ahead, his or her assets can be placed entirely in nonprobate form.
The following instruments can be used to avoid probate at death. Simply set them up to pay off to your heirs directly in the event of your death.
In my opinion, the easiest way to avoid probate is to sign over everything now to your heirs as long as you trust them not to leave you out in the cold if need be. Another way is to put your accounts and house into joint ownership with your heirs.
A big way to avoid probate at death is to give away stuff now or make up payable/ transfer on death forms for your titled assets. Ask your lawyer about it or buy the book 8 Ways To Avoid Probate by Nolo Press (800-992-6656, nolo.com).
Some probate avoidance methods are:
Transfer real estate to a Living Trust.
Name a payable on death beneficiary for bank accounts and CDs.
Name a transfer on death beneficiary for stocks and bonds.
Register ownership of government bonds in beneficiary form.
Register vehicles in transfer on death forms.
Name a beneficiary to inherit your retirement accounts, IRAs and 401(k)s on death.
Put some property in joint ownership.
Create Living Trusts.
Most states have State Law Exemptions which allow a certain amount of money to be taken out of the estate and passed onto heirs immediately upon death without having to wait for the final results of probate court which typically takes 12-18 months.
Simply get rid of what you own now, give away cash and sign over valuables to your kids.
A trust is simply an instrument where you can name yourself or a trusted friend as the trustee then move some property into it like real estate or cash and write up provisions about what you want done with it upon your death.
The procedure is that the ownership documents for things like cars, houses, stocks, etc. are transferred into the trust and other things like books, furniture, etc. are listed as part of the trust.
Put everything you own into these trusts then avoid probate. You don't even need a will for them since they're already self contained.
Beware that some states charge a Transfer Tax for transferring real estate from your name to the trust even if you're the trustee. Check with your county tax assesor's/ recorder's office for details.
Another disadvantage of trusts is that creditors can file a claim against it almost indefinitely while if your assets are in probate, creditors only have a certain amount of time to file a claim against you, usually six months.
Another option is to create a Foundation. With these instruments, you can donate things like a house, etc. but still retain use of them. They get complicated. Consult an expert lawyer about them.
Joint accounts or joint ownership of anything with your spouse doesn't avoid probate, it just postpones it until the spouse dies.
Life insurance pay outs directly to the beneficiary without probate.
By making a gift of your life insurance policy while you're alive, it will not be considered part of your estate when you die. The catch is that you have to live for three years after you give it away in order that it not be considered part of your estate. It is considered part of the $11,000 annual gift exclusion allowance.
Payable On Death Bank Accounts also known as Totten Trusts or the Poor Man's Trust are merely bank accounts or government securities where you ask for a form where you sign to transfer the account to one beneficiary only upon your death. Just ask about them at the bank. There's no probate involved.
U.S. Savings Bonds can be made payable directly to someone else to avoid it going through probate on death.
Annuities don't go through probate.
Stocks, bonds and mutual funds have a Transfer of Death Registration called a Directed Beneficiary Arrangement/ Dba where you can sign a form that directly transfers any of these instruments to a beneficiary on death without probate. Ask your investment companies for these forms.
You can sign the benefits from your pension plan and retirement savings plan (things like IRAs, Keoughs, etc.) over to a beneficiary without having to go through probate.
In some states, you can sign a form at the Department of Motor Vehicles which will legally transfer the ownership of your vehicle(s) to a beneficiary at your death.
Finally, a solution some people choose is to Expatriate from the U.S. which means to move to another country, renounce American citizenship and get foreign citizenship.
There is an Exit Tax on estates valued at over whatever the current value is but if you can get the money out either electronically or in cash like in a boat or plane, more power to you. I discuss this option more in another section.
Check out 346.730 at your library for probate books.
Death Benefit Claims
When somebody dies, there will probably be death benefits available to his next of kin like:
Life insurance.
Mortgage/ credit insurance.
Employee, pension and other benefits.
Earned income due like wages owed, vacation pay, sick pay, etc.
Wrongful death benefits.
Social Security benefits.
Veterans benefits.
The big thing about these benefits is that they don't automatically come to you, the heirs of the estate. You have to go out, file claims and make them happen.
Disinheriting Someone
If you wish to disinherit a spouse, better check with a lawyer about laws because some states have laws preventing this. Spouses generally can't disinherit one another unless there's been a serious breech of the marriage contract like abandonment or violence.
In some states, if the husband leaves the wife a little bit of his estate, she can reject the will and take the mandatory minimum which is one-third of his property. Even if wives aren't given the house, they're often entitled to it until death then it goes to who the husband willed it to.
The following states have Curtesy rights which protects a husband's interest in property so that the wife can't disinherit him: Delaware, DC, Hawaii, Kentucky, Massachusetts, Ohio, Rhode Island, Tennessee, Vermont, Virginia, West Virginia and Wisconsin.
The following states have Dower rights which protect the wife from being disinherited by the husband entitling her to at least one-third of his property: Alabama, Delaware, Florida, Hawaii, Kentucky, Massachusetts, Michigan, Montana, New Jersey, Ohio, Rhode Island, South Carolina, Tennessee,, Vermont, Virginia, West Virginia and Wisconsin.
In order to disinherit someone other than spouses like your kids, it must be stated specifically in the will with reasons so that they don't challenge it thinking it was an oversight on your part if they don't see their names listed. Or just spite them by leaving them $20 and your old shoes.
Inheriting Money Info
Most people don't inherit much because it's often disbursed to several people plus the fact that most people don't have that much left when they die what with the costs of medical care, legal help, the funeral, etc.
If you inherit a signicant amount of money like over $50,000, chances are you will spend some of it on frivolous things that could be used more practically in another situation as you get older so the lesson is don't do something stupid with it right away thinking you have to spend it rather than leave it sitting somewhere collecting interest.
Sure buy yourself something nice but my advice is to pay off all your debts including your mortgage and put the rest away into savings until you really need it.
Learn about investing money. Get professional advice about minimizing taxes. Find out what taxes, if any, an inheritor must pay in your area usually called inheritance taxes distinct from estate or death taxes which come from the decedent's estate while inheritance taxes come from the people getting the money.
Get a good tax man who knows the loopholes so you only pay minimal taxes on either side; either the estate taxes or inheritance taxes either through exclusions or deductions. Someone will probably have to make out a terminal tax form for the decedent.
Major studies done on people who inherit large amounts of money have shown that if they don't use their money to become investors or business owners, they generally get depressed and aimless kinda like Daisy in F. Scot Fitzgerald's The Great Gatsy who after a frivolous, aimless afternoon mused, "Now, what do we do with ourselves for the next thirty years."
It's the same with people who win lotteries. Unless they're fairly grounded and have some kind of purpose in life like meaningful work, many self-destruct and go to pieces, seemingly guilty about having all that easy money and subconsciously trying to rid themselves of it by gambling it away, giving it away, partying it away, etc.
There has been more than one case of some suddenly rich guy buying a bunch of things, starting work on a big dream house only to go bankrupt before the house ever gets completed.
You need self-discipline and some kind of inspired purpose in life if you want to deal with a sudden windfall in a healthy way. There's a lot of self-contempt among inheritors, like they didn't earn it themselves which is a cardinal mark of shame in our achievement oriented capitalist world.
Inheritances of large amounts of money also break families up because everybody is jealous of whoever gets the most. Many inheritors feel bored, inadequate and guilty. Some get arrogant just because they have money which is a false sense of how powerful they really are, not powerful at all because they didn't do it on their own.
If your parents are getting old, talk to them about your inheritance. If you're getting old, talk to your kids about your will. Many parents are unwilling to talk to their children about their deaths at some point in time and the financial repercussions after so either give them this page with these lines underlined or ask them to write things out for you about what they want later:
Funeral details both religious-wise and moneywise.
Death benefit of pension plan, if applicable.
Social function to help grieving people comfort each other like a get-together after the funeral.
Newspaper announcement.
Legal affairs; have a will, trust and other legal documents transferring ownership at death (joint tenancy of home, life insurance benefits) ready and out in the open. Make several copies and give them to all concerned people.
Pick one or two executors to manage everything.
Deal with debts.
Disbursement of assets, often at a reading of the will after the funeral.
Take all the smaller trivial things in your home and give them away now or promise them to certain people and put it in writing, things like your lawnmower, gun collection, wardrobe, etc.
Relax, simplify your life and get ready for the inevitable in peace.
Everybody will die so be mature about it and do what it takes to help your spouse, children and other relatives be ready for it.
With a family business or the case of several marriages with several kids from different marriages plus grandchildren and step-children, it could get complicated so spell everything out in as much detail as possible and if you want to be equal about it, appoint a man and woman team as executor of your will in order to avoid the traditional male bias and take-over of the property that's so common.
To die intestate means to die without a will which means that the government appoints its own executor to disburse the assets through the tedious process of probate which is way more tedious and longer than if done with a will so for the sake of the few bucks it costs, get a will made if your assets are worth more than $10,000. Find out what the laws are in your province/ state.
When women get an inheritance, they often give some of it to the husband but you should keep most of it for yourself in a separate account and not even tell him about it.
A common problem for heirs who inherit businesses is that they're business rich and cash poor then when the IRS does the assessment on the business and they owe hefty estate taxes, they have no money to pay so they have to either sell the business or declare bankruptcy.
You may choose not to accept your inheritance in which case it's called Disclaiming Your Interest. You must notify the executor as there are time limits as to how long you have to do this.
In order to avoid people contesting the will like a jilted spouse, put a provision into the will that anyone who contests it loses everything.
To keep it simple, liquify your inheritance into straight cash as much as possible. If you don't particularly want the house, the car or the business you inherited, sell it all for straight simple cash.
I say you need a good tax man to help you with loopholes but beyond that, learn about investing and invest the money on your own without hiring an investment advisor.
Even though estate planning books are generally in the legal section at the library, #346.71-73 (family law) or KE.5974 and KF750, you might find a book or two on inheritance at #332.024 or HG179.
inheritance-project.com
Disclaiming an Inheritance When You Owe Money
In the event that you owe a lot of money or have a lawsuit judgment against you and expect an inheritance soon because your aging parents are getting quite old, you can circumvent your creditors by disclaiming your inheritance and have it pass immediately to your children who are your parents' grandchildren or anyone else you might deem worthy like a spouse or a sibling.
Your disclaimer is a written document where you state that you don't want the inheritance and want it to go to whoever you name. You must not have already accepted any part of the property or any benefits of ownership in the will.
Submit this document to the will trustee, the person who will be managing the will, probably your father's lawyer.
An alternative way is to ask your father or whoever it is to change the will to direct the money elsewhere since your creditors will just take the money if you inherit it. Your father can sign the money over to someone else without creditors with the understanding that they will pass that money onto you once they get it.
There are other ways to avoid creditors through an inheritance too. Have your father set up an offshore trust, an LLC, a domestic testamentary trust or some other financial entity which is immune to personal liability by the owners (with you as part owner) such that when he passes, you take ownership of the asset which, for all legal intents and purposes, is owned by the trust, the LP or the LLC so that your creditors can't touch it.
Life Estate/ Sale Leaseback
A life estate or sale leaseback is most commonly used among family and friends in order to reduce the bulk of your estate (your house) so it's not involved in probate nor death taxes.
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