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wills

By Linda Toga, Esq.

Linda Toga, Esq.

THE FACTS: My mother’s will provides that her house will be sold and the proceeds divided equally between me and my brother. However, because she was concerned about needing long-term care, a few years ago she signed a deed transferring the house to my brother and retaining a life estate in her favor.

THE QUESTION: Am I likely to see any of the proceeds when the house is sold?

THE ANSWER: Unfortunately, if your mother has already passed away, it is unlikely that you will get anything when the house is sold unless your brother is willing to essentially gift you one-half of the proceeds. That is because a will only controls the distribution of assets that are owned by the decedent at the time of her death.

Here, your mother does not have an ownership interest in the house but simply a right to live in the house until her death. When she dies, that right dies with her. As such, the provision in the will pertaining to the division of the proceeds from the sale of the house will be ignored.

If you mother is still alive, competent and sorry that she transferred the house to your brother, she can remedy the situation in a number of ways. She can, of course, revise her will so that you receive a larger portion than your brother of other assets that may be passing under her will. She can also change the beneficiary on her nonprobate assets like IRAs, 401(k)s and/or life insurance. Neither of these strategies require your brother’s cooperation, but they will only work if your mother has assets worth about one-half of the value of the house.

If your brother is cooperative, your mother’ assets are limited and she is not already receiving needs-based government benefits, your mother and brother can sign a new deed either adding you as a co-owner or transferring the house back to your mother. The will would then control. This solution will require the preparation of a new deed and transfer of documents and the filing/recording of the deed but will not require your mother to change her beneficiary forms or her will.

If transferring the house again will put your mother’s benefits at risk, she and your brother can sign a written agreement in which (1) your mother states that it was not her intent in transferring the house to “gift” it to your brother and (2) your brother states that when he sells the house, he will split the net proceeds 50/50 with you.

If the agreement provides that you are an intended beneficiary of the agreement between your mother and your brother, and specifically states that it is binding upon the heirs, successors, assigns and executors of the parties signing the agreement, you will have an enforceable legal right to one-half of the proceeds.

It is important that any agreement that may be signed by your mother and brother pertaining to the house include the “heirs, successors, assigns and executors” language since, without that language, the agreement, like your mother’s life estate, will die with your mother.

Because there are so many issues to consider when deciding if and how to insure that you receive a share of the proceeds from the sale of her house, your mother should discuss this matter with an experienced estate planning attorney. The attorney can explain the pros and cons of each option that may be available to your mother so that she can make an informed decision. Only then can she be sure that her actions will not adversely impact her down the road and that her wishes will be honored.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate, estate administration, litigation, wills, trusts, small business services and real estate from her East Setauket office.

Wills kept in a safe deposit box are not obtainable to an executor without a court order.

By Linda Toga, Esq.

Linda Toga, Esq.

THE FACTS: I am trying to help my elderly parents organize their affairs. They want things to be as simple as possible for me when it comes time to handle their estates. My parents have wills and other advanced directives in place.

THE QUESTIONS: Other than their wills, are there other documents or any types of information that they should collect and organize now to make the administration of their estates easier?

THE ANSWER: You are lucky to have parents who seem to appreciate the fact that administering an estate is not necessarily easy and who are anxious to have everything in place. Having wills will certainly help you with respect to distributing your parents’ assets after they pass. However, distributing assets is often one of the last things that an executor must do.

Long before distributions are made it will be necessary to make funeral arrangements, contact life insurance carriers and banking and investment institutions, gain access to your parents’ safe deposit box, cancel credit card accounts, as well as all online accounts that your parents may have and locate documents relating to any real estate they may own or lease, to name a few.

While many of these things can be done before your parents’ wills are admitted to probate, you will not be able to marshal assets, close bank accounts or sell property until you are issued letters testamentary by the Surrogate’s Court. If your parents keep their wills in a safe deposit box, you will not be able to even get the will without a court order.

Although not exhaustive, the following is a list of the types of documents and some of the information that your parents may want to put together to facilitate your handling of their estates:

1. Deeds to burial plots

2. Documents relating to any preplanned or prepaid funeral arrangements, including military discharge papers if either parent was in the armed forces and wishes to be buried in a military cemetery or have an honor guard

3. Wills and any codicils to the wills and a list of the addresses of all of the people named in the will and/or codicil.

4. Trust instruments that name your parents as grantors, trustees and/or beneficiaries

5. Life insurance policies, including the beneficiary designation forms

6. Annuities

7. Bank statements and pins for use in ATMs

8. A list of bills that are automatically paid from their bank accounts or charged to their credit card accounts

9. Brokerage statements

10. Statements relating to IRAs, 401(k)s or any similar plans, including the beneficiary designation forms

11. Documents relating to pensions and/or deferred compensation plans

12. Deeds, leases and documents relating to time share properties

13. Loan documents, including mortgages, reverse mortgages, home equity lines, lines of credit (whether your parents are the lenders or the borrowers)

14. Credit card statements

15. Keys to safe deposit boxes and the combination to any safe they may use

16. Pins, security codes and passwords for online accounts, social media accounts and email accounts

17. Account numbers and log-ins for frequent flyer and other rewards programs

18. The names and contact information for their financial advisor, brokerage account manager, insurance agent, accountant and attorney

If your parents are able to gather these documents and provide the information set forth above, handling their estates once they pass should not be overly burdensome. The burden can be further reduced by retaining an attorney with experience in the areas of probate and estate administration. Doing so will ensure that the process goes smoothly and will give you the opportunity to deal with your loss without having to think about what needs to be done.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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