Mom's 'Will' makes me feel uncomfortable...

cathie54June 20, 2006

A little background...

My Mother is 80+ years old. I've noticed over the last approx 10 yrs (give or take), she loses track of what she's trying to say at times.

Well, not losing track of what she's talking about, more like just "stuck" on that one simple word she needs in the middle of a sentence.

OR, she confuses names - but then, with 7 kids, she's ALWAYS done that! LOL!

Just little things, but "I've" noticed it for a very long time, since I talk to her pretty regularly.

She comes from a very large family and there is history of alzheimers in her immediate family (siblings).

Mom and Dad have always just scraped by - we never were rich. In Fact, we were poor.

Dad passed away in 1992.

Mom has a houseful of "stuff" - some of which she has had since at least 1945 - when they got married. And "stuff" that she has saved all these years that "we" kids have given her for gifts over all these years. SOME of the "stuff" is things we made as kids - either in school or as a little art/craft project when we were young.

Now, years ago she told me that she has this thing set up... (I think she has a will, but, if so, I've never seen one. AND, she's not the type to have an attorney. Could be a "homemade job" for all I know.)

Anyway, her idea is that when she dies, EVERYTHING in the house is to be auctioned off, and the money divided amoungst us 7 kids. AND, her house to be sold - and that money to be divided evenly also.

Here's what bothers me...which I told her a long time ago: "You know that "collage" I made out of old Christmas Cards back in 7th grade? That you framed and has been hanging on your walls for 40 years? I want that back when you're done with it!"

LOL! Just Kidding...

But, what I DID tell her is that I think that anything she has that we gave her, we should have 1st choice if we want it rather than it going to auction.

I had recently read that SOME auctioneers don't really care about getting high price, but just sell quickly to get rid of "stuff".

But then, SOME of that stuff is NOT replaceable and/or cannot make up for the value in "sentiment".

I ALSO have been thinking about her house for awhile. She has NOBODY on title with her. I told her ONCE that she needs to set her house up with SOMEBODY on title with her...whether it's ME, or one of my siblings or ALL of us or??? I don't really care - just as long as she does it with someone who will be FAIR about things.

A couple of night ago, this thing popped into my head...if something happens to her, house is to be sold and the money divided. (It's not a lot - her house is only worth about $2-$300,000 tops! Divide that by 7 - (not to mention all the fees/comissions, and I don't know what, that will come off the top) - not a big chunk.

BUT, I'm on limited income. I'm so low I actually got a notice fm IRS one year telling me NOT to file any tax returns! LOL!!!

Now, If something happens, House gets sold and $ divied up, it MAY throw me into a position where I have to pay taxes on it???

OR, would I have to pay taxes anyway - no matter what?

And it's not just ME. This could affect any or all of us.

I pretty much "KNOW" she does not have anything set up as far as "Trust Accounts" for any of us.

I don't know how these things work - but I certainly wouldn't want the house and assets going into "probate".

I know that when HER parents died, there was ONE SON who was supposed to handle everything. Seems he DID handle everything - he KEPT IT to HIMSELF! There was friction amongst her siblings for years over that. I think that's why she thinks she's doing right by doing whatever she's as not to create friction amongst US kids.

I still think she should put ALL of us on title on her house with her. That way, it will not go to probate, and not ONE person has total control.

Geez, I'm so stupid in these matters! (They never taught me this stuff in school! haha!)

I KNOW this must sound cold and greedy. Not meant to be...I love my Mother and hope she lives another 30+ years. But reality is reality. People get whacked out about the inevitable. I try to get real about it.

Anybody been thru similar? Have tips for me?

I need to talk to Mom about this in person and in an intellegent way. I'll even pay for the attorney if that's what it takes to get things in better shape.

Thx in advance for any advice!

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oh my, what a muddle.

all those people on the deed - No that doesn't sound like a good idea. In fact, it is just fine that her name alone is on the deed, otherwise you will miss getting the stepped up basis for tax purposes. Her personal representative will be able to sell the house. That's not a big problem.

I doubt there will be any estate taxes owed - certainly not federal and I think most states, if they have an estate tax, start much, much higher than what you are talking about. If you get the stepped up basis, there would be no capital gains tax, and even if you don't, there probably still wouldn't be enough to tax (but depends on your state)

If you mom made her own will, there is a pretty good chance that it isn't a legally binding will and the distribution would be according to state statute which would mean an equal share to all of you anyway.

The most disturbing lack here is the naming of a "personal representative" a job I never want to do again, but still somebody has to if you don't want to pay a professional to do it for you. Is there one of your siblings who is the most sophisticated financially and that you are comfortable with?

When my mom died, my siblings and I just took turns choosing personal effects. It wasn't a problem. Allowing that was within the power of the personal representative (my husband).

But yes, try to get her to an attorney so that probate doesn't have to be a long, costly process and most importantly choose the personal representative after very careful thought - AND ask that person's permission to be named AND direct that the PR's expenses plus time are compensated in some way. It isn't a fun job and includes filing final tax returns etc. If you know for sure that the siblings will get into a fight (we did) then the PR should be an outside party, perhaps an attorney. I have two brothers who no longer speak to me because my husband subtracted their debts to my mother from their share. I still don't understand why they thought it would be otherwise.

If your mom is slow in her understanding and you think that taking her information would eat up an inordinate number of billable attorney hours, then you might consider interviewing her as to her wishes, passing that info. to the attorney, go over the draft with her and when it is as she wants it to be, she could see the attorney for the signing and notarizing of the will. Have the attorney make an original copy of the will for him/herself and you, your mom or whomever can keep one as well. Whatever you do, don't have just one copy and put it into your mom's safe deposit box because you would have to begin probate just to get access to the box - a real pain in the butt.

    Bookmark   June 21, 2006 at 2:53PM
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Oh goodness, I guess I need to talk more with Mother about this then.

I know she said she has it in her will. I have never seen a will (I've never asked to see it).

I do NOT know if it was drawn by an attorney.

I don't know if she has a PR. If she does, and it is one of us kids, I know it would be my oldest brother.

Also, if she indeed had a will drawn by attorney, I don't know if she read it to make sure it was correct!

(A few years back, My SO and I went to attorney to have a simple partnership drawn up for his business - it was WRONG! We had to go back so they could make the corrections)

As far as the siblings go...some get along just fine, and some don't. So, there is a great potential for conflict.

If my oldest brother is the one, I KNOW he could handle everything. OTOH, I also know there would be conflict.

(Not really funny - but I think Mom wants to divy up everything equal to AVOID us kids getting into conflict. I also think she doesn't acknowledge there is already conflict - has been forever.)

I understand her wishes / desires, and I understand it is, afterall, HER RIGHT to make any decisions she makes. I have to respect that.

I myself wouldn't be able to handle things if it were left to me - I wouldn't know where to start. I certainly would not want the job. (Plus, I'm on disability and don't handle stress at all.)

The thing about the safe deposit box is good to know. I doubt she even has one tho. Most likely her copy of whatever she has is somewhere in her home.

The most important thing I wanted was to avoid probate.

The 2nd most important was to not have to pay tons of taxes. (I am ignorant in this, as I've never owned a house before the one I'm currently in, and my Taxes have been pretty simple. I'll have to look into this.)

The 3rd, of course, is maybe I would like some certain things rather than them being sold at auction. (Of course, I "suppose" I could attend the auction and bid! haha...)

I must admit, I'm confused as to the term of "stepped up tax basis".

We're in California - well, some of us. Some are in other states. Do state taxes apply to where one lives? or, where the sale/auction takes place? (I'm ASSUMING where one lives.)

YES, I'm going to have to talk to Mom more about this. Who made out the will, who has copies, who is attorney (if any), who is PR, etc.

I know my SO's parents had a will, and when one of his sisters lived with them, their will dissappeared. His Mother told him about it being MIA. The sister handled everything once they both died, and claimed there was nothing left to divy up. (We still "don't know" where all their personal possessions went. - Well, we all know - it all ended up in some storage somewhere.)

Thanks for the info - At least I know where to make a start initially.

    Bookmark   June 24, 2006 at 2:17AM
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I accidentally put my explanation of "stepped up basis" in the wrong place. It's under "What is the Point"

    Bookmark   June 25, 2006 at 11:14PM
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Under no circumstances should she put any or all of your names on the house. If she only puts one name on the house, then that person is the owner when she dies, no matter what your mom wanted. Someone who says that they would be fair now could always change their mind when they are the sole owner of the house. That isn't what she wants.

If all (or any for that matter) of the names are put on the title, and they are sued, then your mom could lose the house to the law suit because it is an asset that can be taken in a suit. That isn't wants, either.

If you would have an honest sibling who would share the proceeds of the house (if only one name is on the house), then you would have the problem of gift taxes, if they disbursed the money all at once. Let's say your sister "Sally" became owner of the house after your mom died because her name was put on the title. If she was an honest soul and decided to give each of the siblings an equal share, using $210,000 as a value of the house, each sibling would receive $30,000. The most you can receive as a gift from one person each year is $12,000, without incurring gift taxes. So, you would have to pay taxes on the $30,000 if it were to be given to you in one calander year.

If the house is left to all of you in a will, there will be a stepped up basis for valuing it for inheritance purposes. No taxes would be owed, if the estate is not too large. If all of your names are put on it, then the house reverts back to the original value when it comes time to sell it. You would pay taxes on the profits.

Unless you mother has a very large estate, there is no need to worry about probate. It just isn't that much of a problem. As long as there is a valid will, and no strange unknown people who will want a share, it just isn't that big of a deal.

    Bookmark   June 26, 2006 at 8:22PM
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Now see - I knew these forums would be good for learning something!

It never even crossed my mind about if someone was on title and got sued! (DUH) Thanks for bringing that to my attention.

So, call me ignorant (I admit I am in these areas).
I'm still confused about the "stepped up" thingy. I will ask a dear friend of mine - see if he can explain it to me.
I've never owned a house up till recently (going on three years now), and never had much in the way of anything that makes tax filing!
(Except one year - I got taxed to death - but that's another story.)

So, I have not been able to talk to Mom about anything. I called her last week, and she was busy (getting ready to leave for weekend). I called her again yesterday a.m., and she was busy! LOL! She's always busy - good for her!

ANYWAY - SO... Like I said, I don't know if she has PR to take care of her estate. I don't know if she has valid will.
I will try to find this out whenever she's not busy! haha

BUT, so...I don't know if she is aware - or had even thought about tax consequences.

What would be the best way to protect from taxing the heck out of this? Her set it up as a "trust" or something, so that we all get paid only a certain amount every year?

(Actually, I'm not even sure I know about trusts.)

Have her stipulate that we all get a maximum of, say $10,000 per person per year? (based on the example of house @ $210,000 divided by 7 kids = $30,000 each)

This must sound horrible - these posts.

I just don't want to have to pay more taxes than necessary if there's another way around it. (and I'm sure the other siblings would feel the same)

I'll talk to my friend about the "stepped-up" basis. I don't have an attorney or tax/investment/financial advisor, so I'm pretty much winging it here.
Perhaps I could call the IRS and ask?!!! LOL!

    Bookmark   June 28, 2006 at 4:28AM
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I just don't see any of your mother's estate being taxed unless you live in a state with an extremely low threshold for estate taxes - and I don't know that any of those still exist. In Washington State, it is over a million dollars.

People get into more problems than they solve by trying to avoid taxes, but in this case, there just isn't a tax to avoid. You can check with the attorney general in your state to be certain that's true, but I think you will find that it is.

My father-in-law formed an LLC for his business to protect his assets in case of a catastrophic illness. The only minor downside is that when my husband and brother-in-law inherit, their 1% share in the LLC will not get stepped up.

My FIL also formed an LLC to protect his house. I knew that was a mistake and so it turned out to be. The tax bill came to our house and I paid it and then asked to be reimbursed. He blew a gasket - not because I asked to be reimbursed, but because I had paid it - which according to him was not my business to do. He wrote an incredibly nasty letter to us accusing us of trying to take over his affairs. He cancelled the LLC and everything is okay again. You didn't really need that information I know. I am just blowing a little steam. I thought he should have said "thank you, but next time I would like to make the payment myself".

Anything connected with money seems to be so difficult. I don't envy where you are. With so many siblings the PR is going to have to have a strong stomach for conflict.

    Bookmark   June 28, 2006 at 2:18PM
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Try and get Mom on a good day - a day when she is in good health and happy - to talk about the "will" tell her you were reading about how important it is for folks to know about it etc.
If she can't remember where it is or what is in it. Take a
pad and make a list (as she tells you) about what she thinks is in it or wants to have in it. You might make suggestions about %'s or amts and also about personal things to go to special people. Then have her go over the list with you.
If she likes it then try and call an attorney and have him/her draw up one with these main points. also explaining to the attorney your concerns for taxes etc and what does he suggest.

I had a new will drawn up after youngest DS passed on. It wasn't that expensive and the attorney used my previous one (drawn in a different state)and my new changes as the guide.

    Bookmark   June 30, 2006 at 9:30AM
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minnie tx - so sorry about DS...

I and "DH" need wills also. I have already verbally given everything in the home (personal possessions of mine - except for the clothes & make-up!) to my only DS, but told him he's not allowed to remove it yet.

"DH" and I have house in (common???) - I forgot now! But if something happens to me, house is all his, and vice versa. (We're not married) and - WITH the (verbal) understanding that if his daughter or my son ever need, they would at least have a roof over their heads - i.e., they could stay here to get back on their feet.

I told my son this is how it is, and WHY it is as it is.
But if we both died at same time, I don't know what would happen.

I always have concern over such things. DH doesn't think about it. (in fact, he won't even talk about it.) I just don't want my son to have to deal with so much "stuff" when I'm gone.

Anyway, yes I still need to talk to Mom. NOW, I don't know WHEN to talk to her. Just found out last night that Wednesday My Mom, BIL, and the 5 kids went to get headstone for my little Sis's grave after all these years. (Sis died in 1997 at 39 yrs old - breast cancer - and 5 kids ranging from 17 yrs to 10 months old.) My niece called me afterwards and told me. She told me that both her & my Mother were very emotional over the whole deal.

This is going to have to wait now - I think for awhile.

In the mean time, I can at least gather info and try to be clear on how things work. (I've never personally had to deal with such - but I don't want to wait till last minute to find out - ha! really dumb, any moment could be last minute no matter WHAT the age/health.

I HOPE there is not much conflict. As long as it's fair, there shouldn't be much, if any conflict. I think Mother should call us all together and make straight her wishes. But I don't think she'd do such.

I have so much to learn and find out. This is going to take time now.

    Bookmark   June 30, 2006 at 3:26PM
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Cathie, I join you in your hope that you and your siblings can settle things amicably

As to you and your Dh, I assume you mean that you are tenants in common with rights of survivorship. That would work for the two of you, but could be a problem for your heirs if there is no will.

People rarely die "at the same time". Even if you were in an auto accident, one of you would probably survive the other by minutes, hours, or days. The child of the person who survives the longest would receive everything that has passed to his/her parent. That could be a problem if your primary asset is the home. Only one of them would get it.

    Bookmark   June 30, 2006 at 6:10PM
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My mom is 83,widowed, ,not in good health. My brother lives with her,rent-free. He's a dead-beat dad,owes thousands in back child-support. Mom bailed him out once, to the tune of $20,000 he owed his kids, who live in another state and are now over 18. He is also the executor of mom's estate. For many reasaons, I don't want her to die. She owns a home worth probably $200,000, a colonial in a good neighborhood but the house is a fixer-upper at this point. The roof is bad, water leaks in the basement, kitchen was never updated since 1963. She also has about $250,000 in savings. I am worried that when she passes, my brother may try to get more than his fair share of the estate. There are 4 kids, 2 sisters, myself (another girl) and brother. So a four-way split will be involved. I have two worries: that brother may try to get more his share and that his share will be snatched away by the courts. Further, there are a few household belongings I would like to have for sentimental reasons, not greed. I once asked Mom if I could have a pair of lamps that used to be in my bedroom. She said "no, those are mine" so I have never asked for anything else. I don't want to upset her in any way, so I plan to get an attorney after she dies and try to see if another executor can be named, and to see exactly how "probate' applies. Anyone know of a good book that explains wills and estates? I assume laws vary depending on the state. We're all in New York.

    Bookmark   July 13, 2006 at 9:17AM
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Probate laws do vary from one state to another but mostly in the area of what a wife will receive should her husband die intestate.

It will be expensive to have your brother removed as executor. You would have to prove either incompetence or undue influence and the onus would be on you to provide the burden of proof. If you are quite sure that there is going to be a problem, and from what you have written there will be, then I would ask the other siblings if they would pay an equal share of the court costs and attorneys fees to contest the will. Of course there is the possibility that your mother has a clause in her will that eliminates any heir who contests any of the provisions of her will.

    Bookmark   July 16, 2006 at 10:29PM
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All I know for sure is that mom does have a will, leaving evrything to be divided four ways, with shares to grandchildren if any of her children die before her, and my brother is the named executor.

    Bookmark   July 17, 2006 at 9:29PM
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The appointment of the PR has to be approved by a court, so you could make an objection at that time, but courts don't like to do that and it puts you in an adversarial relationship with your brother right from the get go. You need to be aware that it usually takes at least a year to clear probate, though your brother could make a distribution to the heirs before that.

    Bookmark   July 17, 2006 at 9:46PM
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Your entire family needs to sit down with an eldercare attorney. Not only are there are lot of questions about the estate she may leave behind, but it really doesn't sound as if she's managing her affairs well as far as planning for HER future (with people living longer, and often needing a great deal of care during their last years, and with the added problem that she's at risk for Alzheimer's), she needs to plan NOW for her future, before she's no longer able to do it. If you wait too long to plan that, it's very possible that she'll end up with an expensive, court-appointed guardian taking care of her affairs. There's also that problem, that if she makes mistakes in her planning, she may mess up her chance to apply for Medicare--that's a very specific process and you can't make a miss-step along the way.

If you cannot get her to go to an attorney, make an appointment for yourself and as many siblings as you can get together--ask all your questions, find out what needs to be done, and then perhaps, armed with info, you can convince your mom to do the right thing for herself and her family. Good luck.

    Bookmark   August 17, 2006 at 8:22AM
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If you and your SO are not married, and you've agreed that, on the death of one of you, the other is to have the deceased person's share of the house, in many jurisdictions if there is nothing in writing, or that specific provision in the deceased's will, their wish will not be honoured.

Not at all like if they are spouses (or is that "spice"?).

Check out the rules in your area (state, most likely), for if you don't, you may be in for a rude shock, when it's too late to make any revisions of plans.

ole joyful

    Bookmark   August 17, 2006 at 8:15PM
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cathie54: It is really important for your mother to settle this now while she is lucid enough that her wishes will be legally valid. azzalea's advice is very sound. Often it is easier to hear advice from someone other than your children, especially if they bicker a lot and you are use to tuning it out.

If the family got along better, the provision that the house and everything must be sold and divided could be overturned by agreement. Otherwise, you may wind up going to an auction and bidding against strangers and each other for the momentoes you each cherish.

    Bookmark   September 3, 2006 at 9:08AM
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Mayb on a good day you can get her to follow you around and put the name on the back of things for certain people. My mom did this. It made her feel good to do it without thinking about "the end time"

    Bookmark   September 6, 2006 at 12:36AM
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It would be better, I think, if there can be some others in the family who hear of your mother's wishes, if it won't complicate matters with your mother in terms of getting her going on the issue.

Plus write down the items.

And get a lawyer to draw the will as required.

Some of the family might be able to have it overturned later, claiming that your mother was not in her right mind when it was made.

The more of you who can attest to at least parts of the situation as you get it set up and have her attest to it, the lower the risk of that happening - or of it being successful, if it does.

Much expense later.

ole joyful

    Bookmark   September 6, 2006 at 4:12PM
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