Working on details of a Will
 

I'm not planning on kicking the bucket anytime soon, but with recent ailments and the loss of twelve family members since 2009, my wife and I have decided to work on our Wills.

I've never gone through this before, so I have some questions...

Since there are three rental properties involved, all in both my wife's and my name, my issue begins there. All three rentals are in my wife's and my names. We've both agreed that they should go to my kids. We'd both like to TOD them to the kids, but upon my death, they would automatically go to my wife, since she's one of the owners. How can I insure that if I die first, that the properties actually go to the kids and not linger in my wife's possession? Is there a way, without the kids knowing, that I can guarantee they get the properties?

I know I could add my oldest daughter, who's and adult, to the title as part owner, but I don't want to do that right now due to some bad decisions she's been making.

My goal is to keep these properties generating some income so that the kids can be helped out financially, if needed.

Basically, if we're in an accident together, and I die and she survives, but is mentally injured, how to we secure the homes from someone that would otherwise try to take advantage of a situation with a brain damaged survivor?

The reason I'm asking this is because my uncle, the only surviving brother to my dad, has taken over my grandma's belongings, deemed her mentally incapable, and changed my grandfather's wishes from giving his house to my dad and/or his survivors. He's now sold the house, and we've been told that there's nothing we can do, because grandma has given him complete power of atty over everything she owns. Grandma now lives with my mom, and gets a $300 a month allowance from my uncle to cover medicines and such. Prior to my grandma's mind going south, she was worth well over $3m due to properties and investments. Now, we have no idea what's going on, because my uncle has sold properties, closed accounts that my mom had access to monitor, and has bought homes for his daughter as well as his 4 grand children.

I don't want anything like that to happen to my wife if I go first.

We just want to guarantee that these properties go to my kids instead of someone else.

^^ How old are your children? 21? It matters for PA inheritance tax. Pa taxes lineal decendents over 21 at a rate of 4.5% Under 21, there is no inheritance tax. That's kind of steep. imo.

If you and wife own as H/W or jointly or tenants by the entirety (dig out your deeds & check), the houses automatically go to her. zippety do dah.. Essentially, they bypass the will by operation of law. You might want to retitle as tenants in common, and pass your half to the kids or a trust for their benefit(s).
You could also create an LLC for each or all the properties and transfer all into them. Mortgages on the properties might be a hurdle to get transferred.

You might consider gifting your interest to the kids IF PA does not add back these to youir estate as being made in contemplation of death. New Jersey, for instance, has a 3yr presumptive look back period to include those in a decedent's estate for inheritance and estate tax purposes. But New Jersey does not tax lineal decendents at all for inheritance tax.

My best advice Jon is to do a little reading on line and go talk to an attorney knowledgeable in PA inheritance tax law. Ask around.

Gook luck.

The Elder Law Firm of Robert Clofine | Elder Law Articles - PENNSYLVANIA INHERITANCE TAX

The Elder Law Firm of Robert Clofine | Elder Law Articles - THE PENNSYLVANIA INHERITANCE TAX MARITAL EXEMPTION

https://revenue-pa.custhelp.com/app/answers/list/c/6
Inheritance Tax

best bet is visit a trust and estates lawyer with your wife and discuss options. This is a pretty common desire, and there should be a lot of ways to make what you want happen take place, BUT, if I remember properly, a lot of stuff might have to be done well in advance related to inherited properties tax issues or estate taxes if you qualify. IE, if you were about to kick the bucket, you couldn't whip up some deathbed changes last second and get out of certain tax penalties

I think you can have 50% ownership rights to the properties be held in trust while the other 50% remains in your wifes possession, there are all kinds of ways to tie up the way the property goes.

I also think it might be possible for you to set up a trust like that now, with you as the person running the trust.

A lawyer is what you need to get though, then you can just spell out what you want done, and they can discuss what options you have in your state and federally. Good thing your wife and you seem to be of the same mind on this, best to get it done now with her full consent while you are both in agreement, and both of sound mind and body.

Anything above a simple will begs for an estate planning professional. The credo in that specialty is that "They aren't documents . . They're time bombs."

Cut to the chase and leave it all to the government...

Estate laws vary so much from region to region. Learn all you can for yours and finalise it with a proffessional. You do not want challenges to the will errupting after your demise. A lot we own is just basically yard sale stuff if not personally dealt with before our demise.

At some point I have to give away or sell all my aquired tools and many other things to realise at least some value from them. The wife would have no knowledge of their value. Trouble is at age 70 I am still using a fair percentage of them. It is amazing what we aquire over the years if active.

Plus 100.

A simple will *may be* fine if all you have is a house and car and grown children.

Anything beyond that, you're begging for trouble. I've drafted quite a few wills and a couple of trusts in my time, and I'm telling you as honestly as I know how: use a professional. It doesn't have to be the $400/hr guy in the biggest firm in town, but you definitely want an attorney who knows the ins and outs of estate (and estate tax) planning.

The worst case scenario if you get it wrong is not that something you wanted to happen doesn't, but rather than your will is declared invalid, all of it flows through the statutory intestacy laws, and then 2/3 of the estate is eaten up by various lawyers and estate taxes.

You can either pay a small amount now to be sure it's done to your desires, or you can be sure huge amounts will be paid later.

Good luck, JP. You're smart to be thinking about this stuff, but take the next smart step and get a professional involved. If you're in a large enough church, ask the elders who the attorneys in the congregation are, and then talk with them to get some names for a decent estate lawyer, they'll know who they are.

Thanks for the advise. I have an appointment next week on Thursday with an attorney.

Definitely your best move, jp. A trust would seem to be the answer.

Our situation is complicated by having a child with Down syndrome. If something happened to the Mrs. and I, we wanted to be sure that he would not be disqualified for any support he might otherwise be eligible for. There are pathetically low amounts of assets a person with special needs can have in their name before they become disqualified. As a result, we had to have a Special Needs Trust crafted to cover all of the bases.

Might want to take the wife along as well - if nothing else to make sure both of you are on the same page as to your understanding of the attorney's advice.

Take your time. Consider his advice and mull over the options before committing anything to paper. Due diligence now will prevent many headaches and arguments later.

Most here could relate similar stories to what happened to your grandmother. Same here.

If my dad and I hadn't made plans before his passing, my sister and BIL would have long since taken over my mother's house and cleaned her out. As it was, it literally took a physical a$$-kicking in my mother's kitchen when he became belligerent to both me and my mother - and showing them the paperwork where the land and house was already in my name, with a lifetime estate provision for mom - before they cooled their jets and backed off. My father wasn't even in the ground 2 days before they started their plans in motion.

Out here in CA you can keep the Government from getting part of your Estate due to Probate; with a Living or Revocable Trust and a Pour (spelling?) Over Will. In the case of My Mother it was needed to list Me on the Deed to Her House.

The Pour Over Will take up the loose ends if you aquire something that is not in the other documents.

That represents what I and My Family did. Anyone doing these things should research them. There is likely internet sites and books on the subject.

Oddly our the Present Governor of CA Jerry Brown did away with the Inhertiance Tax the first time He was Governor back in the early 1970s. But, there is still Probate.

The tax reach of states has little to do with their probate process.
Assets placed in revocable trusts are includable in one's taxable estate, in most state jurisdictions.
There is no necessary relationship between a person's probate estate and his taxable estate. Life insurance policies, IRA's, jointly owned property with survivorship rights pass around probate, but may or may not escape state (and federal) estate or inheritance taxation.

+1.

My recently-deceased ex-wife had no will, but had so few possessions and so much debt that my son will get insurance policy cash, take certain possessions, and give the under-water house back to the bank.

However, if the property had had value, then he would be endlessly tied up in court.

Tallk to a professional.
I have. I have a will.

This!


My parents had their will last amended in 1991, when my little sister was born. They recently decided to update it, as its been 20 years and assets changed. For their sanity, and for the sanity of my 2 sisters and I, they made a visit to their lawyer to have them draft the conditions and terms of the will. While my parents have quite a bit of trust that we will settle things in the event something happens, my two sisters and I felt that it would be in everyone's best interest is my parents worked with an attorney. That way there are no questions, loose ends, and hurt feelings.

Friends of our family have been torn apart due to the "legal aftermath" of a family member with no clear will. :(

^^^ 1991 OMgosh! That's the stone age in estate planning circles. I recently worked with a 1997 joint will with a H&W revocable trust with credit shelter and marital trusts.... so totally outdated (and unnecessary in NJ), only the fact that wife survived saved them from estate taxes.

I guess people feel that if they spent a few grand having a lawyer draw up all these documents, they'll surely get their money's worth by keeping them around gathering dust forever!:D:rolleyes:
Nevermind that tax laws are everchanging.:o;)