Category Archives: Old and the Frustrated

A Continuing Saga in the Life of the Old and The Frustrated

by Guest Author, Certified Paralegal, Robin Crouch

 

 

Scene 4:  “Silver Slippers” and The Gym

 

Having recently joined a local gym designed for women, like me, who may be intimidated by traditional gyms, I find the program interesting, and even fun.  This is the kind of place where nobody knows your name but everybody knows your game . . .

 

Dot and Hootie (so named for their exercise technique) were feeling pretty good about their regular workouts, about the weight they'd lost and the firmness they'd gained.  That is, until that pesky Flo bounced through the door, one more obstacle between themselves and thinner summer thighs of their dreams.  You see, Flo is planning her wedding, her THIRD:

 

The Casserole

Some months ago, Flo delivered her famous chicken casserole to a recent widower, Harry.  Flo was familiar with Harry and the lifestyle he and his wife had enjoyed together.  There was nothing Flo wouldn't do to have that same lifestyle, after all, she deserves it.  Flo is a two – time widow, with two children of her own.  Flo has learned the ins & outs of probate court, she knows her rights as a surviving spouse.  As it turns out, Harry is quite a bit older and Flo has the motivation, not to mention a great pair of active wear shorts that ride the great divide.

 

Harry accepted that casserole along with the casual drop-ins and the coffee cakes, and before long, a new life with Flo became very appealing.

 

Getting His Ducks in a Row

Unknown to Flo, Harry's desire for that new start did not diminish his capacity for thought, so he made that appointment with his Elder Law Attorney to “get his ducks in a row” prior to popping the question.  Harry also has two children, who are very happy that he has found new companionship, but were a little worried about “losing the farm.”  After the consultation with his Elder Law Attorney, about this new event in his life, Harry was able to preserve his children's inheritance and provide for his new bride.

 

Lesson 10:  A lonely person wearing clouded glasses can make poor decisions.

 

A little prevention — good planning, thoughtful choices and a clear discussion among family members — can sidestep an ugly aftermath.

 

If you are contemplating a new marriage, call us for a consultation with one of our attorneys.  We can add a “casserole provision” to your existing estate plan or customize a plan to fit your individual needs.

 

Next time, Hootie and the ruptured disc.

The Old and the Frustrated

 

Today, I offer you the first in a mini-series of legal soap operas. I hope to present a light-hearted but serious look at some of the problems I see every day in my office: with the best of intentions, trouble follows ill-advised and poor planning. Although the stories are fictitious, the situations are typical of those I see on a daily basis. Your charge is to read and learn. See how many problems and lessons learned you can identify.
 
 

Scene 1: The Beauty Shop

When Betty sat down in the chair, she really had a lot on her mind. Mable could not draw Betty into their normal conversation about the Smith twins or the Rader widow. Even tattoos and short skirts seemed lost on Betty that day. All that Betty could think about was what she was going to do about the farm. With her husband, Herman, gone now for a year, and Betty just recently diagnosed with Parkinson’s, it was time to get the farm out to her kids, Sally and Jim. But it wasn’t as simple as it seemed: Herman’s kids were grown-ups when she married him married 5 years ago, nice enough while Herman was well, but they didn’t even visit when he was sick. She did not want her 200-acre farm, that her dad gave her in 1950 to go to his kids. She had to find a way to make sure that Sally and Jim could keep the farm in the family.
Lesson 1: Gifting the farm may result in several needless tax problems, e.g.
(a) federal gift tax & penalties may be imposed depending on the value of the farm
(b) the children will receive the farm at a carry-over tax basis which results in capital gains tax when the kids sell the property after mom’s death.
(c) Betty will lose her $250,000 capital gains exclusion if she sells her home during her lifetime.
 
She finally told Mable the problem and Mable gave her the best advice that 22 years in the people business had taught her: “You want to give that farm to Sally and Jim right way, just like Esther Wright did years ago with her kids. Esther went to Joe Futz. He’s a great attorney, been in the business for years. My husband knows him from the Elks and he’s really reasonable. He’ll just do you want without asking a lot dumb questions. He’ll just get it done”.

Lesson 2: Betty loses control of her farm when she deeds the property outright to her kids.

 
It was a hard decision, but Betty decided that Mable was onto something so she set up a meeting with Attorney Futz. Betty told Attorney Futz that she wanted to deed over her farm to her kids now, so he prepared the deed, as Mable had promised, wiithout any fuss. She was so relieved that she was able to keep the farm in her family. She knew that she had done right by her kids.

Lesson 3: The farm is now subject to the children’s problems and liabilities, e.g. divorces & lawsuits.

Scene 2: Stuff Happens

Betty’s son, Jim, dies suddenly in a car accident.

Lesson 4: Jim had no pre-marital agreement with respect to inherited property.

 

 
Jim met his wife, Jessica, in high school. Jessica was married to Biff, the all-star, for a few years and they had 2 children. When they broke up, Jim decided that Jessica was for him and they were married. Betty was not sure she was so happy with the “woman with a past” but she was happy when little Jimmy Junior was born. Unfortunately, Jim’s death brought with it a whole new set of worries.

Lesson 5: Betty had no plan to exclude step-children, nor did Jim.

 
Jim always planned to take care of Betty, nothing more had to be said – no formal contracts or arrangements were necessary; it was safe with him. The problem was that Jim died before Betty leaving all of his worldly possessions to his wife, Jessica. This included Jim’s half interest in the farm his mother, Betty, deeded to him for safe keeping. Jessica also had other plans as time went on, including reuniting with Biff, who was working at the local feed mill. Biff was a great guy but no one had given him a chance to get ahead. Biff helped Jessica see the opportunity to help him fulfill his life-long dream to own a charter boat and be a fishing guide on Lake Erie. All he needed was money for the boat, a small office building, licenses, employees … and if Jessica used the money she was entitled to from Jim’s share of the farm, they wouldn’t even need a loan. Jessica knew that this was the right thing to do.

 

Lesson 6: Betty never planned for The “Law of Unintended Consequences”: Betty always though she would die before her son. Now her daughter-in-law, and not her son, owns half of the farm.

 

 
Jessica called Betty, very excited about Biff’s new company and the fact that he was willing to let her be a junior partner. With her money and his expertise they would be set. All Betty had to do was give her the money from the farm … and this is where the problems really began. Betty didn’t have $650,000 to buy Jessica out, nor did Betty want to sell the farm. The farm was her home and had been in her family for generations and she wanted it to go on with her family.

Lesson 7: Any co-owner of a property (Jessica) can “partition” or force the sale of the property.

 

 
Betty called Attorney Futz. He would know what to do, surely. Attorney Futz listened carefully and was very polite but had to explain to Betty that Jim’s share of the farm now belonged to Jessica. Jessica had the right to force the sale of the entire property in order to get her one-half share, even if Betty’s daughter Sally, the other half-owner, did not want to do so.

Lesson 8: Betty can be forced to move from her home and be “on the street”.

 
What should Betty do? Where could she turn for a friendly, and reliable opinion? She found herself back in the chair, seeking advice once again from her best friend and hairdresser, Mable.

Lesson 9: A good friend and advisor is hard to find.

 

There are ways not to end up like Betty. Every problem described above could have been avoided with proper legal planning and advice. If you have a home or a farm and would like to find out some of the possible solutions, call Lisa Nelson at our office. Lisa is one of our legal assistants. She will call you back, at no cost, and give you some general suggestions about how you might proceed, either with your existing attorney or with our office.



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