Tag Archives: inheritance

Do I Really Need a Will?

last-willYes, you do.  A will is a legal document which ensures that your property is transferred according to your wishes after your death.

If you don’t have a will, here are five things that can happen.  We found this list at nerdwallet.com.

  • Spendthrift heirs – If you have heirs who aren’t equipped to handle a large sum of money, receiving it may cause damage.  Perhaps these heirs are bad at handling money or, maybe, they’re drug or alcohol addicts.
  • Unexpected or contested heirs –  There may be confusion about who the beneficiaries really are.  Sonny Bono, musician and politician, died without a will.  His ex-wife, Cher, and a man who said he was Bono’s son tried to claim part of his estate, which his wife, Mary, contested in court.  Prince’s estate is another classic example.  Many people came out of the woodwork claiming to be relatives, entitled to a piece of his assets.
  • Property (and probate) in multiple states – If you own property in more than one state, your estate will have to go thru the probate process more than one.  Probate is a costly and timely process, even if you just go through it once.  Image if you own property in four states and your heirs have to hire four attorneys and go through the whole process four times.
  • Fabricated wills – If you don’t have a real will in place, it’s possible for someone to create a fake one – especially if your estate is large.  A famous case involved the estate of tycoon Howard Hughes.  When he died, several supposed wills surfaced, and his estate spent millions of dollars defending against the false documents.
  • Beneficiaries don’t like the court appointed executor – If there’s no will, the probate court will appoint one.  It may likely be an experienced attorney but not necessarily one the family knows.  It may take a great deal of time for this person to take inventory, appraise assets and distribute the estate.  If you have a will and name a family member as executor, that person will usually do a much faster job, possibly because that person is also a beneficiary.

If you don’t have a will, you should prepare one now.  Otherwise, your assets may not be distributed the way you want them to and a lot of extra money will go to attorneys and the probate court and not to your heirs.

For more information about wills, trusts and other estate planning documents, go to www.diesmart.com.

My father left his home to his kids — my stepmother sold it for $1 million

moneyologistWe read this recent column from MarketWatch and found it interesting enough that we are repeating it in its entirety.  If you have step children or step parents, you should be aware of what might happen if proper planning isn’t done.

He made his wishes clear, but his second wife had other ideas

Dear Moneyologist,

My brothers and I are mentioned in our father’s will as what he “wishes to happen” with the house he purchased for his second wife. He put the house in her name, but stated that if he should die first, he would like the wife to live in the house till she dies, but wanted the house to be sold and the proceeds to be split among his children.

After he died, my stepmother has sold the house for $1 million. She bought a new house for $500,000 and kept the difference. She has not put all the children on the ownership of the new house. Also, she has children from her first marriage who might want a percentage of the estate, including the new house. The will was made in Taiwan. I live in Texas.

Where do I and my brothers stand in this situation?

Betrayed Daughter

Dear Daughter,

When it comes to family drama, stepmothers fare about as well as mothers-in-law. That is, they get a hard time. Sometimes, it’s deserved, other times I think they fall victim to negative stereotypes. In one case, the stepmother wanted to cut her husband’s children out of his life insurance policy. And another stepmother obsessed over her husband’s children and what might happen to his credit score should he die. It’s easy to come down hard on stepmothers, mostly because of Grimm Fairytales. This 2009 book “Stepmonster: A New Look at Why Real Stepmothers Think, Feel, and Act the Way We Do” tries to debunk that myth. On this occasion, the jury is out.

Your father can’t leave his children something that he no longer owns. That’s not how life or the law works.

Your stepmother has downsized and created a nice nest egg. That was her prerogative. Your father can’t leave his children something that he no longer owns. He put his house in your stepmother’s name and, judging by his will, it seems that he wanted her to give it back. That’s not how life or the law works. If you could prove undue influence, you might have a case. You would need to provide evidence that (a) your father was not of sound mind when he signed over the house and/or (b) your stepmother somehow did not have his best interests at heart and tricked him into signing over the home. That would be an expensive and difficult process.

It’s still unclear whether U.S. or Taiwanese law would apply here. According to Taiwanese law, “The making and effect of a will are governed by the national law of the testator [your father, in this case] at the time of the making of the will.” But that may prove fruitless. “If you can prove that the testator was the true owner, you can file a litigation against your father’s second wife,” says Ou Yang, Hung, managing attorney at Brain Trust International Law Firm in Taipei, Taiwan and adjunct assistant professor of law at Soochow University. “It will be very hard to prove that the testator was the true owner of the house.”

Put it in simpler terms: You may have to kiss that $1 million goodbye.

For information about estate planning, check out our website www.diesmart.com.

Want to avoid probate?

estateplanningYou may think that if you have a will and in it you name the person who should inherit your home, that’s all you have to do.  Yes, it is if you’re willing to have the home go through a probate process.  That probate process will cost the beneficiary a lot of money as well as time and will be a public record.

However, there’s now a way that many can avoid the whole probate process and that’s thru the use of a transfer on death (beneficiary) deed.

There are several states that have a similar law and California just joined their ranks in January of this year.

If you live in one of these states, you now have the option to complete a Revocable Transfer On Death Beneficiary deed and name a beneficiary for your home.    After your death, the beneficiary can directly claim ownership rights to the property without involving the probate court and paying probate fees.

The deed can be completed and filed without hiring a lawyer or paying a third party to record the deed with the county recorder.

For some homeowners, a TOD Deed can be a cost effective way to avoid probate on the death of the last owner.   If you own a home and have it listed in your will, you might want to consider this new option.

For more information about probate and estate planning, go to www.diesmart.com.

Are your beneficiary designations up to date?

k8758525Do you have a bank account?  What about a brokerage account or life insurance policy?  Have you set up an annuity  or a retirement plan?

You probably have a least one or two of these types of accounts.  When you set them up, you were asked to name a beneficiary for each.  At the time, the person you named was someone you wanted to receive these assets when you died.  It might have been a spouse or significant other.

It’s been several years since you named that person.  Have your circumstances changed?  Are you now divorced or no longer involved with him or her?  Have you remarried or had children you want to be sure are protected?

Most people name a beneficiary and then forget about it.  They never go back and update the information provided so it reflects their current wishes.   They figure it doesn’t matter because they have a current will that designates who should inherit what.  However, it does matter.  Whoever is named as a beneficiary receives that asset when you die, regardless of what it says in your will.   So your ex-husband or former girlfriend may receive a large sum of money that you didn’t want them to have.

Don’t let this happen.  Review your beneficiary designations whenever your circumstances change and be sure that your assets will go where you want them to when you die.

For more information about estate planning, go to our website www.diesmart.com.

You need a will. Why shouldn’t you write your own?

blended familyMost blank will forms are based on the assumption that you are part of a traditional nuclear family with a husband, a wife and a common set of children.  It will further assume that you wish to follow the traditional path of inheritance:  The surviving spouse will inherit the deceased’s assets and they will they pass to the children upon the second spouse’s death.

Instead, as is very often the case today, you may be part of a blended family.  If so, you should definitely see an attorney and prepare a will that will protect every member of that new family.

Let’s look at an example of what might happen if you don’t have a well written will.

John and Susan had both been married previously.  John had two children from his first marriage and Susan had three.   When they got married, all was well for several years.  Then John died suddenly.  Susan inherited all of John’s estate (which included assets he had brought into the marriage).

When Susan died, her three children inherited her assets; John’s children got nothing.  Why, because they were not Susan’s legal children and neither John or Susan’s will legally protected them.  A lengthy legal battle ensued with the biggest winner being the attorneys.

Although this blog is based on an article from the Sydney Morning Herald, it is critical for everyone in a blended family to take heed.

Make sure your legal paperwork protects your family and distributes your assets the way you want them allocated.  Don’t take a shortcut now that may result in unnecessary pain and suffering at a later date.

For more information about estate planning, check out our website www.diesmart.com.