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Stephen Tashiro
12-03-2013, 11:48 AM
A friend of mine has no children and wants to divide the estate in question equally among about 8 nieces and nephews. We are preparing a draft of a will that will be sent to a lawyer for review. Some questions:

1. It might be awkward if a house were re-titled to belong to 8 people since it would require 8 notarized signatures to sell it. It would be simpler if the "personal representative" designated in the well is authorized to sell the house and divide the proceeds equally. Can that be done in some straightforward language?

2. Bank accounts and other financial accounts can have designated beneficiaries. As I understand it, if the account holder dies then any designated beneficiary is allowed access to the assets in the account - at least that's the way my own accounts are set up. How does this type of beneficiary square with beneficiaries designated in a will?

3 Is the personal representative allowed "by default" to sell physical property such as coin collections etc. that do not have registered titles and divide the proceeds of the sale amont the beneficiaries without obtaining some sort of written consent about the sale from each beneficiary?

Rich Engelhardt
12-03-2013, 12:04 PM
One word - trusts.

When a person wills something, like real estate, to another person - the person getting the property is responsible for paying the IRS the moment the property clears probate.
A direct descendent, such as a son or daughter, or a spouse may be able to fight it out with the IRS - but - no way a niece or nephew can.

My good friend, Dan, got trapped by this. His aunt left him her farm in her will. The day after the will cleared probate, he got a bill from the IRS for over $300,000.00 - due immediately.

A trust can be structured, pretty much any way a person wants, and can circumvent probate and the IRS.
Find someone local that deals with trusts.
A very good source to find such an individual may be a landlord's association.

My wife and I are members of one and we had a seminar on trusts last year that went over all the benefits of setting them up.

Mike Henderson
12-03-2013, 12:05 PM
You really need to contact an estate attorney about those issues. They are too complex and important to rely on advice on a woodworking forum.

Mike

glenn bradley
12-03-2013, 12:14 PM
You really need to contact an estate attorney about those issues. They are too complex and important to rely on advice on a woodworking forum.

Mike

Bingo. I am the first to say that 1000 lawyers at the bottom of the ocean is a good start but, estate planning (no matter how insignificant one might think their 'estate' is) is fairly critical if you don't want it to disappear into the ether. Get a professional invloved.

Stephen Tashiro
12-03-2013, 12:36 PM
As I said in the original post, a professional will be involved.

Ken Fitzgerald
12-03-2013, 12:42 PM
Stephen,

Why not have a lawyer involved from the very start?

A woodworking forum isn't a good source for legal advice or opinions on legal matters. You will get opinions as there are a few opinionated woodworkers, myself included.:o

Use a lawyer, start to finish.

Rick Potter
12-03-2013, 2:11 PM
I agree with Rich. Trust's are not the perfect thing, but they sure eliminate a lot of problems. A good one will cost about $1500 to 2,000.

I lost my father, mother, and aunt in the last 10 years, and each had a trust. Altogether, over a dozen real properties were involved, and we never had to go through any probate. Special items to go to certain recipients can be included in the trust itself, or in a simple will inside the trust, our lawyer recommended leaving cars, etc. out of the trust to make it easier to buy and sell them.

The house you mention would stay in the name of the trust, while ownership of the trust would be split amongst the new trustees as designated.

Rick Potter

Joel Goodman
12-03-2013, 3:08 PM
In terms of the house having 8 equal owners -- that is not a good idea. I have family friends with four kids who died and the house required all to agree to sell. One balked and it decayed for about 10 years until they worked it out. No one could agree on repairs either. I'm sure an attorney would have many options to prevent this. One could require the sale within a given period, or allow a sale or repair if 1/2 of the heirs voted for it. One has to plan for the heirs not agreeing to protect the assets.

Dan Hintz
12-03-2013, 4:08 PM
You could also say something to the effect of if any of the heirs wishes to sell the house, it must be put up for sale within a year or the heir's portion must be bought out by the remaining heirs.

Brian Libby
12-03-2013, 4:15 PM
You need an estate lawyer involved from the beginning. It is extremely complicated.

Rich Engelhardt
12-03-2013, 5:48 PM
In terms of the house having 8 equal owners -- that is not a good idea. I have family friends with four kids who died and the house required all to agree to sell. One balked and it decayed for about 10 years until they worked it out. No one could agree on repairs eitherAgain - one of the other nice things about a trust is that you can specify up front how things like that will be handled.

Ed Aumiller
12-03-2013, 10:18 PM
My wife & I own basically nothing... But the trusts we are in charge of provides us a nice house, shop, rental income, etc...
When we die, there will be no taxes until something is sold by the new trustees who are defined in the trust and anything valuable is explicitly defined who it is to go to..

A trust is not something most lawyers like to do because it eliminates them in the future...

Think out exactly what you want to do, put it in writing inside a trust and give everything to the trust with you as the sole trustee... and make the 8 relatives joint trustees when you die... but allow a provision in it for a majority rule on what must be done...

Get good legal counsel when making it... Preferably from a lawyer that does mainly work for banks, etc... they seem to have the best experience in trusts in my opinion..

Good luck...

Mike Henderson
12-03-2013, 10:22 PM
A trust is not something most lawyers like to do because it eliminates them in the future...
Au contraire. Lawyers love to do trust, and do them fairly cheaply, because when you die, the family comes to them to help close out everything. Unless you have a very simple estate, even with a trust you'll need legal help and they know it.

And that's when they hit you at an hourly rate.

Mike

[Note that there are attorneys who specialize in wills, trust, and estates. It's a good business.]

Ed Aumiller
12-03-2013, 10:34 PM
Au contraire. Lawyers love to do trust, and do them fairly cheaply, because when you die, the family comes to them to help close out everything. Unless you have a very simple estate, even with a trust you'll need legal help and they know it.

Mike
Disagree, when I croak, my daughter will freely own the house I live in... no lawyer...
The rentals will be owned by my two step-daughters, with the oldest in control... no lawyer...
My grandkids will own there building lots... no lawyer...

All contents of each property stays with the property... no lawyer...
It is not all contained in one trust.. each property has it's own trust..

The only thing that is not in trusts is motor vehicles...

A properly written trust(s) ensures that nothing changes, just who becomes the trustee of the property....

Mike Henderson
12-03-2013, 11:29 PM
Disagree, when I croak, my daughter will freely own the house I live in... no lawyer...
The rentals will be owned by my two step-daughters, with the oldest in control... no lawyer...
My grandkids will own there building lots... no lawyer...

All contents of each property stays with the property... no lawyer...
It is not all contained in one trust.. each property has it's own trust..

The only thing that is not in trusts is motor vehicles...

A properly written trust(s) ensures that nothing changes, just who becomes the trustee of the property....
As I said, a simple estate will not require legal help. But a more complex estate will. Depends on what you own and how you want to dispose of it.

The best argument is that some attorneys specialize in it, making a very good living from it.

Mike

Jeff Erbele
12-04-2013, 5:13 AM
A friend of mine has no children and wants to divide the estate in question equally among about 8 nieces and nephews. We are preparing a draft of a will that will be sent to a lawyer for review. Some questions:

1. It might be awkward if a house were re-titled to belong to 8 people since it would require 8 notarized signatures to sell it. It would be simpler if the "personal representative" designated in the well is authorized to sell the house and divide the proceeds equally. Can that be done in some straightforward language?

2. Bank accounts and other financial accounts can have designated beneficiaries. As I understand it, if the account holder dies then any designated beneficiary is allowed access to the assets in the account - at least that's the way my own accounts are set up. How does this type of beneficiary square with beneficiaries designated in a will?

3 Is the personal representative allowed "by default" to sell physical property such as coin collections etc. that do not have registered titles and divide the proceeds of the sale amont the beneficiaries without obtaining some sort of written consent about the sale from each beneficiary?

You are wasting your time drafting the will. Go see a lawyer, a good one specializing in Wills and Trusts.

Ditto the comments about a woodworkers forum is not the place to seek legal advice and you have been given some wrong advice.

I served as a personal representative. I am an "attorney in fact", not at law, and managing trustee of two trusts.

There are multiple types of trusts, with different purposes and ramifications; a topic to involved to address here. Discuss with the attorney.

Regarding:
1. It might be awkward if a house were re-titled to belong to 8 people since it would require 8 notarized signatures to sell it. It would be simpler if the "personal representative" designated in the well is authorized to sell the house and divide the proceeds equally. Can that be done in some straightforward language?

That is the purpose of the will, to list the property, assets and liabilities in an attachment, designate a personal representative and the beneficiaries, and how the proper is to be divided or distributed.
After death, after the will is presented to the court, the probate process begins. The will is validated, if it is, the personal representative is authorized and obligated to act in behalf of the deceased and execute the will. That includes paying final bills, filing a tax returns and distributing the property per the will, documenting his/her actions and reporting such.

Which makes my point, you are wasting your time drafting a will. No attorney is going to accept it.
Can it be done straight forward language? No. The attorney will write it in legal terms, in a prescribed format.

You, (he), (the beneficiaries), do not want a house titled 8 ways. In the recent past my wife became party to a very similar arrangement, 1/6th owner of a house. What a royal mess that is. Each fraction should be worth a something sustainable, say $20 - $35,000 per share for discussion sake. It turned into a money pit and complicated to get out of, further there is no consensus as what to do about it. It gets worse; there is other property involved with a different split, 1/7 of 1/3 ownership. Trust me, fractional ownership is a terrible plan, and gets progressively worst with each additional division or fraction.

2. Bank accounts and other financial accounts can have designated beneficiaries. As I understand it, if the account holder dies then any designated beneficiary is allowed access to the assets in the account - at least that's the way my own accounts are set up. How does this type of beneficiary square with beneficiaries designated in a will?
The account title prevails. For example, T.O.D Transfer On Death titled accounts do just that. They are not part of the will.
Same with JTWROS - Joint Tenants With Right of Survivorship.
Same with Life insurance policies, retirement savings plans, etc. where there is a named beneficiary.

Again this is a bad idea for bank or brokerage accounts to name multiple beneficiaries. If there are two or more, in this case 8, it is a race to whom can get to the account first. Potentially the first one there can take it all; which may be illegal if the will specifies otherwise.
Again, consult the attorney on how best to title and transfer property, and manage or avoid taxes.

3 Is the personal representative allowed "by default" to sell physical property such as coin collections etc. that do not have registered titles and divide the proceeds of the sale amont the beneficiaries without obtaining some sort of written consent about the sale from each beneficiary?

You have this all balled up.
The personal representative is given permission, by virtue of the will, through and by the probate court, further the personal representative is obligated to do so; well, unless they refuse to serve or are incapable of serving; than the court will appoint a replacement.
You (your friend) do not want to appoint an unwilling or incapable, knowingly, in advance.

Beneficiaries are not in charge. They do not grant authority. There consent is not required. They can jump up and down, object, and holler all they want. It doesn't matter. They can or could contest the will. Then there is a mess and chances are the attorneys' fees consume some or much, or maybe all of the estate. Your friend does not want that situation either.

All beneficiaries do is benefit from the distribution of assets, if any remain after the obligations of the estate are settled.

What you can do for your friend and somebody must do is a property inventory specifying how each item is titled, and compile a net worth statement with assets and liabilities. Then your job is done and the attorney has a clear picture of what they are working with.
Presenting those things upfront will save time and attorney's fees.

Anthony Whitesell
12-04-2013, 5:53 AM
As everyone has mentioned...trust. Here is a quote from the lawyer that drafted mine:

"Wills are the most expensive document a lawyer drafts that isn't legally binding. Wills are a notarized list of your wishes. The probate judge will usually follow your wishes but is not required to. Trusts are legally binding and do not go through probate."

Ed Aumiller
12-04-2013, 7:09 AM
Anthony, you are correct..

Stephen Tashiro
12-04-2013, 8:33 PM
Two answers from the professional were:

If the benficiaries informally agree that they want the house sold, the personal representative may leave the title of the house in the name of the deceased and sign over the deed to the new owner when it is sold.

The beneficiaries declared on bank accounts and brokerage accounts become the new owners of those accounts. This does not depend on how beneficiaries are named in the deceased owners will.

Erik Loza
12-04-2013, 8:51 PM
I just saw this thread and hope I'm not jacking it but would really appreciate some advice if anyone is able. My father is quite ill and (against doctor's orders) probably going to leave the US and return to Mexico (his native country) very soon, as in a matter of days. At this stage, it does not seem likely that he will return to the US alive. His sole heirs would be my brother and me. Dad does not much in the way of assets. There are two houses, both with titles still being held by the banks, a vehicle, and a couple of bank accounts that are not substantial.

Our issue is that we will probably not be able to get together with Dad and with an estate attorney before he leaves the US. Our concern is forneither of us get saddled with debt due to Dad's lack of planning here. I downloaded a simple will form from the California State Bar website and instructed my brother (both he and Dad are there...) to make sure to have him fill it out before he leaves the US and that may happen but I realize that's an ideal arrangement. Could anyone more experienced lend their thoughts? Thanks in advance,

Erik Loza
Minimax USA

Mike Henderson
12-04-2013, 9:19 PM
I just saw this thread and hope I'm not jacking it but would really appreciate some advice if anyone is able. My father is quite ill and (against doctor's orders) probably going to leave the US and return to Mexico (his native country) very soon, as in a matter of days. At this stage, it does not seem likely that he will return to the US alive. His sole heirs would be my brother and me. Dad does not much in the way of assets. There are two houses, both with titles still being held by the banks, a vehicle, and a couple of bank accounts that are not substantial.

Our issue is that we will probably not be able to get together with Dad and with an estate attorney before he leaves the US. Our concern is for neither of us get saddled with debt due to Dad's lack of planning here. I downloaded a simple will form from the California State Bar website and instructed my brother (both he and Dad are there...) to make sure to have him fill it out before he leaves the US and that may happen but I realize that's an ideal arrangement. Could anyone more experienced lend their thoughts? Thanks in advance,

Erik Loza
Minimax USA
I'm not an attorney so take this with a grain of salt.

If you inherit a house (or a car) with a mortgage (loan) on it you will be responsible for the mortgage (loan). However, you do not have to accept an inheritance. If the house is under water, I'd simply refuse the inheritance. If you don't want the car (and the loan) you can refuse the inheritance.

If he dies without a will, his estate will be divided according to the laws of the state of his residence (you will have to go through probate).During the probate, the executor would have to make payments on the outstanding loans. If the executor does not, the lien holder can move to foreclose or take back the car. So if he doesn't have much assets the most likely thing that will happen is that the executor will put the houses and car up for sale.

But check with an attorney before you do anything.

Mike

Erik Loza
12-04-2013, 10:19 PM
Thanks, Mike. I appreciate the input.

Erik Loza
Minimax USA

Nike Nihiser
12-05-2013, 12:25 PM
There's a lot of misinformation here. For example "a will isn't legally binding" .... well once the person dies, if executed properly it is. Also if executed properly and not in conflict with another law The probate judge can't just ignore parts or all of it. A trust isn't the answer to all estate problems, if the estate is small enough a simple will might be the best solution. And there isn't a set price to have a trust done. Can a will be done in simple language ? Yes, there are no magic, legal terms. It must state the decedent's wishes clearly. It should accurately account for all of his or her property and how all of it is to be divided. It must also be properly witnessed. Some states may require it to be notarizes, some may not.It helps if a witness signature needs to be verified,

Ed Aumiller
12-05-2013, 9:02 PM
Ref Nike...
quote....
""For example "a will isn't legally binding" .... well once the person dies, if executed properly it is""

It probably depends on the state laws... I know from experience that in Pennsylvania and Virginia, if the probate judge does not agree with the will for whatever reason, they can simply ignore it and do what they deem is in the best interest of the estate...

In the same states, a trust does not go thru probate...

Jeff Erbele
12-06-2013, 12:04 AM
There's a lot of misinformation here. For example "a will isn't legally binding" .... well once the person dies, if executed properly it is. Also if executed properly and not in conflict with another law The probate judge can't just ignore parts or all of it. A trust isn't the answer to all estate problems, if the estate is small enough a simple will might be the best solution. And there isn't a set price to have a trust done. Can a will be done in simple language ? Yes, there are no magic, legal terms. It must state the decedent's wishes clearly. It should accurately account for all of his or her property and how all of it is to be divided. It must also be properly witnessed. Some states may require it to be notarizes, some may not.It helps if a witness signature needs to be verified,

I agree, there is a lot of misinformation here; further even the good information may not apply to the friend's situation of the OP; further laws vary by state. These are all good reasons why a discussion board is not a good place for legal advice. Add opinions, lack of knowing the full situation, misunderstanding what was read, taking things our of context and more.

In my first post I wrote, "Can it be done straight forward language? No. The attorney will write it in legal terms, in a prescribed format."
I was referring to the OP's intention of having an attorney write the will. My point was the attorney is going to write it as they do.
Yes a simple will written in layman's terms in theory should work and could work. On the same note it could contain errors, omissions, typos that change the meaning, or something as simple as a comma in the wrong place.

For example in a case where the deceased intends to divide the property equally amongst three people but a misplaced comma changes the legal meaning.

My property is to go to Tim, Tom, and Ted. - Each receives 1/3 of the total.
My property is to go to Tim, Tom and Ted. - Tim gets 50%. Tom and Ted divide the other 50% and receive 25% each.

In the first sentence there is a comma after Tom's name.
In the second sentence the comma after Tom's name is omitted.

Steve Friedman
12-06-2013, 12:44 AM
[QUOTE=Ed Aumiller;2189251]I know from experience that in Pennsylvania and Virginia, if the probate judge does not agree with the will for whatever reason, they can simply ignore it and do what they deem is in the best interest of the estate...

That's not true. I have been a Trust and Estates Attorney for 35 years and understand that it may sometimes seem like that, but judges can't ignore a will "for whatever reason." They may sometimes try to determine a Testator's probably intent, but that is not the same as ignoring the provisions of a decedent's Will.

The statement above ascribed to an attorney that "Wills are the most expensive document a lawyer drafts that isn't legally binding . . . " is a blatant sales pitch by an attorney who is obviously trying to sell Inter-Vivos (Revocable/Living) Trusts. The attorney also needs grammar lessons (sorry I couldn't resist). Asserting that a Will is just a "Notarized list of your wishes" is patently false. For centuries, people have used Wills to successfully direct the disposition of their estates after death. Clearly it is not just a list of wishes. I should also point out that Wills must be signed and witnessed. Adding the signature of a Notary Public does not make the Will any more "valid." A Notarized form of affidavit, signed by the Testator and Witnesses, is often used to make a Will "self-proving." That procedure merely allows the Will to be probated after death without the requirement of having the witnesses appear to prove the Will after the Testator's death. To be valid, a Will is not required to have a self-proving affidavit. In fact, that practice did not even exist until the 2nd half of the 20th century. Even as recently as 1980, only half of the States had adopted the practice.

The truth is that everyone can rest assured that their testamentary wishes will be honored by doing four relatively simple things:

1. Make sure their estate planning documents (Wills, Trusts, etc.) are accurately drafted to unambiguously express their testamentary intent;
2. Make sure the documents are properly executed, as required by relevant State Law;
3. Make sure the title of their assets and beneficiary designations are arranged to coordinate with their estate planning documents; and
4. Make sure they review their plan as family and financial circumstances change to ensure that those changes do not inadvertently alter their plan.

It's really not any more complicated than that. Most of the litigation we see arises from failures in #3 and #4. These days, there's not much excuse for failing to get #1 and #2 right.

Hope that helps.

Steve