My dad is in the process of finishing up his will. Everything seems pretty standard, except he is remarried and his wife (our stepmother) keeps the house until she dies. It is fully paid off and in both their names. He has 75% equity in the house and she has 25%, and supposedly that 75% will be split among his 3 kids at some future point. She states that her will also reflects this intention.

Their lawyer got antsy about this, and in fact declined to sign the final paperwork because there are too many loose ends with this arrangement. We all agree she needs to be provided for and should always have a place to live, but so many things can happen in the future, including her getting remarried, moving to a different place, etc. Splitting the proceeds from the sale of the house will not leave her enough money to move elsewhere. Unfortunately my dad is in the final phase of cancer, so the above scenario will soon play out.

Anyone have similar experiences and ways to deal with it?

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2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
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When you say "Their" lawyer, I assume he is the one working with them on this arrangement. Why in the world did he let it get to the point where he wouldn't even sign his own work? He shouldn't have control but should offer suggestions along the way to help them meet their needs and desires. Are there other assets? Enough to offset the value of 75% of the house? Lots of things going on here and I wish you the best since I'm not in a very good position or qualified to offer advice.
Probably the most serious thing here is your Father's illness. I am sorry that anyone (and their family) has to endure this.
Chuck.

__________________
1983 M-B 240D-Gone too.
1976 M-B 300D-Departed.

"Good" is the worst enemy of "Great".

I'm not a lawyer but from what I have learned, through researching, is a will is not enough to avoid probate.
Every state has a threshold. If your total assets are above that threshold you have to go through probate court, you DO NOT have a choice. In some states the amount is only $1
I think here in Florida the threshold is like $500. Don't quote me on that. You should check for your state.
In fact these days a will is pretty much a useless document. Ok maybe not useless but it's not the strong document it used to be.
Thank you blood sucking lawyers!

The only way to avoid probate and have up to 25% of the total assets spent in legal and court fees it to put yourself in a trust. This is actually an easy thing to do though a lawyer will never tell you that or even help you make one.
Basically you make yourself into a trust and put all your assets in the name of that trust. For example if the trust name is "Harry's living trust" you go down to the court and get a quitclaim deed on the house in that name. That's a very easy thing to do. You get all deeds and titles in the trusts name. Personal property automatically is in.
When this is done you don't have to go through probate. AFIK this is the only way.

Of course there is an executor of the estate assigned and all that.
I would urge you to go to the library and read up about trusts and get your parents in one fast.
Or read up on-line.
http://www.savewealth.com/planning/estate/probate/
I went to the library and found a book with a CD that had all the forms you need in it.

DAnny

PS sorry to hear about your Dad and your situation.

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Yes there are many things going on. I think the lawyer freaked when my step-mother mentioned that I had some reservations about the house situation. So far, there are TOD stock transfers set up along with a distribution formula of cash assets. I don't know the dollar values of either of those.

They balked at creating a trust for the house because it restricts his wife's options and mobility. I realize that nobody here can or should dispense legal advice, just looking for ideas that someone might have used before.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
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http://www.marylandtaxes.com/publications/bulletins/it/default.asp

Raymr,

First, I'm not a lawyer and I am not familiar with Maryland law.

You didn't mention whether your stepmother has children of her own. Second marraiges can really muddy estate planning waters... and make post death fights more likely iif not addressed beforehand.

I have a client whose husband passed away and left her a life estate in his interest in their marital home. She and his credit shelter trust each now own 50%.
At the time of his death, the property was owned by them as TENANTS IN COMMON. This allowed him to bequest his half to his children by use of the trust. She gets to live in the house until she dies. During her lifetime, she is responsible for all taxes, which now are a cool $12,000 per year! I am not sure if there is an abondonment clause if she leaves, but she owns no other property, so as long as she is able to, she will remain there.

If your father and stepmother hold title as Tenants by the entirety or Joint Tenants with rights of survivorship, the house will likely pass automatically to your stepmother. This is done through the operation of law and not by will. You should ask a MD attorney how to have the title held prior to death to make sure that Dad's children keep their rights in 75% of the value.
In NJ, TIC is the only way to do that. Otherwise, it would go to her automatically. Don't mess this up!

Another question is: Did your stepmother legally adopt you and your siblings?
State inheritance tax law may not consider you as her children if you are not legally adopted.

I see MD has an estate tax exemption of 1,000,000, half of the two million the Federal Govt. provides for 2006-2008. Be aware of that if you are considering a credit shelter trusts to save death taxes.

Sorry about your father. My best wishes to you.


Post script: If your lawyer is antsy, he's antsy about his estate planning skills.
Maybe he's not the best one to be handling this. Also, I assume he is drafting BOTH wills with full and open disclosure to both parties??? If not, I'd be concerned.

The plan with my Grandpa was disperse just about everything when he was still alive. But his property, went to all of his kids, but most of them just wanted the money from the sell, my mom and one aunt wanted to keep it. So, they appraised it, and gave 1/7th to each of the other 5 and bought it from them basically. Might consider that, buy her 25% and then just let her live there. But then you own it and theres no questions later on.

With my Grandmother, she signed the house over to a couple of her sons, they were the owners, on the premise they didn't sell it while her husband was still alive, about the same thing going on with your situation. The lawyer didn't have any problem though.

Thanks for the replies. She has no other family, just an older brother. She wants the flexibility to sell this house and buy another if the need arises, such as if she can no longer go up and down stairs. They are in nearby Delaware. She fears, maybe rightly so, that the trust could force her out if the concerned parties want to sell the property before she is ready. My dad's primary concern is to keep a roof over her head for the rest of her life. I am concerned that if she remarries, she might be convinced to change her will in favor of her new family.

Also thanks for the kind words. The tears were shed months ago. Now we are just trying to keep the guy comfortable in his last days, and making sure stuff is in order to the best of our abilities.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

Good luck, Raymr. my mother has just discovered she has lung cancer, so my sister and I are dealing with this now. My mother never remarried after my dad died, so that part isn't as complicated.
With all the divorced, remarriage, blended families, etc nowadays, it has really created a legal mess (and lots of work for lawyers).

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I too am sorry to hear about your familys plight.

I am even less of a lawyer than these other guys, but it sounds to me like you are saying that there might not be enough money in your step-moms 25% to see her through, yet it is your fathers wish that she be provided for. I'm not sure by what means you can accomplish that legaly, but it sounds to me like you and your siblings might have to give up some of your inheritance to help secure her future. Perhaps the provision that she keep the house until some future time could be clarified and or the percentages could be altered to give her a better start. I'm sure it's a weight on your father that he is unable to leave you both everything he wants to. Whatever the outcome, best of luck and look for the best solution now rather than having this problem last on indefinatly.

__________________
-Marty

1986 300E 220,000 miles+ transmission impossible
(Now waiting under a bridge in order to become one)

Reading your M103 duty cycle:
http://www.peachparts.com/shopforum/831799-post13.html
http://www.peachparts.com/shopforum/831807-post14.html

You're never quite prepared for those words. Good luck to you, too.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

I think that's the extent of it. Under the best circumstances, the 75% will be distributed when she passes away. However, there is still a chance that some or all of it will disappear for a variety of reasons. It's a compromise, but I should just respect my dad's wishes and accept it for what it is.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

My grandparents own a lot of property, I *think* its all currantly held in JT with my uncles. I think the idea is to avoid estate taxes. But I am no expert on this issue its so far down the road I havn't even researched it yet.

What you could do is take your dads name off the deed right now, have him sell it to the kids and set it up as some form of tenency. This way your stepmother has a place to live, and you guys are protected.

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We tossed that idea around. The thing is, she may want, or need, to move and she would need all the money from the sale of the house to buy a new house. Thats my dad's intention too.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma