Wednesday, March 29, 2017
Charles and Lois O'Brien of Arizona have arranged to donate their valuable collection and research to the University of Arizona. I'm sure whoever has been named as the executor of their wills is going to be deeply grateful for this. I suspect that most executors would look around at a million and a quarter insects and not realize their dollar value. I don't think I would have known without researching. To read more about the O'Briens and their collection, click here.
If you have an unusual collection or object, put some careful thought into where that should go after you pass away. The O'Briens found a university that is interested. I know of other estates in which collections have ended up in museums, libraries, galleries, and private homes. Not all collections are valuable in the monetary sense. Some items are just not going to be of interest to galleries or museums no matter how great you think they are. Maybe your items are best left to a friend or relative who shares your interests.
There's no point leaving items to institutions who really can't use them, so a bit of advance research and discussion is extremely valuable. You don't have to give up your beloved collection before your death.
The attached photo of Lois O'Brien accompanied the CBC article and is credited to Deanna Dent/ASU Now
Tuesday, March 21, 2017
1. The words "I'm adding you to the title of my house" should be replaced with "I'm giving you my house". No, I'm not exaggerating. Adding a name creates legal rights. You are actually giving away some or all of the ownership of the property. It's not a placeholder. The law doesn't care that it's "really" your house if the other owner doesn't want to sell or mortgage the house even though you do.
2. You can't take it back unless the person you added agrees. You've created the right of ownership for that person. Nobody can just toss you off the title to your own house, so why should you be able to do that to someone else?
3. Don't count on the person agreeing. People are human. They get greedy. They get manipulative (or their spouses do). In other cases, they do things they think are for your own good even if you don't want them to. In other words, you simply cannot control whether someone is going to co-operate with your plans for the property. You've given away legal control.
4. You could be creating a tax problem. Have you asked a lawyer or accountant about tax implications at the time you add someone, or in the future when the property is sold/distributed in the future? If not, why not? Is it because you're okay with you or your kids paying tax that wouldn't exist if you just left the title in your name?
5. You can't stop the other person from dealing with their part of the property. If you add someone as a tenant-in-common, that person can add other people to the title without your consent or even your knowledge. Now there's a surprise you could live without.
6. You can't use your will to untangle these arrangements.
7. The fact that it worked for your cousin's hairdresser's best friend does not mean it will work for you.
I'm not even going to go into the problems that arise in estates when a parent adds one or more of the kids to the title and doesn't clarify in writing what is supposed to happen with the ownership. That's something I've blogged about many times already. It 's an issue of its own.
Please get legal advice before "adding a name" to your title. There may be other ways to achieve what you're trying to do without all of the hassles and complications.
Thursday, March 16, 2017
"My dad died and left his estate to 4 beneficiaries. Myself, and my 3 nephews. One thing on the inventory is my dads house where I'm living for the last 3 years since he got really sick. Will just states that everything should be divided 4 ways. Me and one nephew don't want to sell the house, other 2 want to sell it. Executor of the will is the nephew that wants to sell. Will doesn't say to sell all the properties (4 million total value) and house worth is around 300k. What are my options here?"
The will appears to be set up to give flexibility. It does not give individual properties to individual people but simply says to divide the whole estate in four equal shares. This gives you options. Often executors think that when everything is to be split four ways, all four names have to go on each piece of property. That is flat out wrong. There is no reason whatsoever for all four of you to be put on the individual properties before they are sold. That is just an extra step, extra work, extra cost, and extra headaches.
A will does not have to direct the executor to sell the properties, and in fact most wills don't say that. It's understood, though, that items that are not being given directly to beneficiaries will be sold and the proceeds will be divided among the beneficiaries. The person who decides whether the house is to be sold or not is the executor. It doesn't actually matter whether everyone agrees or not. He still has the power to sell it.
I assume that when you say you don't want the house to be sold, what you really mean is that you want to own it yourself. Obviously it cannot stay in your father's name so it has to be given or sold to someone.
If the estate value is four million, and you are one of four equal beneficiaries, your share is going to be something under a million dollars. Taxes and expenses will come out first before your share is calculated.
One option is instead of taking a million dollars in cash, you receive the house and $700,000. In other words, you are taking the house instead of $300,000 (or whatever the final number turns out to be). The title would be transferred from your father to the estate, and then from the estate to you. You can suggest that to the executor.
If you choose this option, it would protect both you and the executor if he got a property valuation to place an accurate price on the house and for you to exchange funds equal to fair market value for the house. You don't want other beneficiaries complaining that you were given some sort of break that cost them money.
Another option is for the house to be listed for sale on the open market, and for you to offer to buy it. You can use some of your inheritance for that.
It sounds as if one of your nephews is also interested in the house. I do not recommend that you and he both own the house. That will work for about five minutes before it falls apart. Even if you could both happily share the occupancy of the house, there will eventually be a need for one of you to sell, move, re-finance, or leave it in your will, and you can't do any of that without the consent of a co-owner.
If both you and your nephew want the house, the executor is the one who has to decide which one get it, and he has to stay neutral between you. To do this, he can use any method that gives both of you an equal chance, such as flipping a coin or drawing numbers out of a hat. It would be nice if your nephew recognized that this house has been your home for the last three years, but that is not a legal matter. Being there while your father was alive doesn't give you any right to own the house now.
Remember that if you get the house - either by gift or by purchase - you do not get the contents of the house. That's completely separate.
We'll also cover topics about working with lawyers and using the legal system.
You can catch us on VOCM 590 am each Thursday at 11:30 a.m. (Newfoundland time). You will also be able to listen live by going to www.vocm.com. After airing, the shows will be available on VOCM's webpage to listen to later.
We're excited and proud to be working with this leading station! They have been so welcoming and so professional, we know we're in good hands.
Chelsea and I will be on every show and from time to time we will have guests on with us. The guests will usually be experts in the topic we're covering who will be on board to offer insights and information. Occasionally the guest will be someone with an estate-related story to tell. We have issued a few invitations already, but we welcome suggestions for guests. Email us at TheLawShowNL@gmail.com if you have a suggestion for a guest you'd like to hear.
We also want to hear your questions. If you'd like your question covered on our show, email us at TheLawShowNL@gmail.com. If it's a simple question, it could be answered quickly, though we expect the more complicated questions could take as much as one whole show to cover. Anything related to wills, estates, probate, trusts, elder law, etc is welcome. Once the show is on the air, we will be offering a prize to anyone who emails a question that is used on the air.
I'll keep you up to date as the first broadcast date approaches. And as always, feedback is welcome.
Wednesday, March 8, 2017
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