Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
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Sadly, my grandmother passed away early last week. It
was a very heart-wrenching time for my family and I. Luckily, we
are a close family and held together and supported each other
very well. My grandmother was eighty-four (84) years old when
she passed. An open-heart surgery went well, but she had
complications with her lungs and fluid from which she was not
able to recover. We will miss her dearly, and we will all thank
her for how well she raised us. Thank you, Granny.
Aside from all of the
grief and heartache and pain that goes along with a death in the
family, there are also financial considerations to be made.
Sometimes, it is just about how to pay for expenses related to
medical care and funeral arrangements. Both of these two things
can amount to thousands of dollars (rarely will it just be
hundreds anymore - the days of an old pine box are pretty much
gone). There will also be in most cases the distribution of
assets, and this might be just small personal effects or it
could even be substantial assets. In my case, my grandmother
left my mother (the oldest of five children) about fifteen (15)
acres of land and the house in which my grandmother lived plus
all of the personal effects. Now, this is considered by some to
be a substantial amount of assets. I consider it to be a
substantial amount of assets.
The land, fortunately,
was distributed years earlier so that it automatically went to
my mother upon my grandmother's passing. There was no probate
involved (probate is when the state or county or local
government has to step in and distribute the assets of the
estate). The house did the same thing. This is great as there
are no lawyers to worry about or consult. There are, however, a
few problems to consider.
Problem #1: The house and
land has to be maintained. The property taxes on both have to be
paid. Utilities must be paid. Landscaping must be continued.
Pest control has to be contracted. These things can add up to a
lot of money. The property taxes will go up substantially as my
grandmother had a senior citizen discount and a homestead
exemption. My mother will have neither of these on the house or
the land. The utilities will decrease a little bit as no one
will live in the house full-time. Pest control will not change.
Problem #2: My mother
wants to distribute the land to her children (me included as I
am the oldest) the same way her mother gave the land to her.
This presents some unique problems as I have three houses that
have gone back in foreclosure this year. I most definitely do
not want any of those mortgage companies coming after this
inherited land for any deficiencies against those houses. For
that reason, I cannot possibly put my name on the deed to the
land because the mortgage companies would see this as an asset
and force us to sell it. Being the oldest of four children, even
having my name as one of the four would be a problem - the
mortgage company would still force us to sell the land to settle
the debt. They would take my fourth of the proceeds and give the
other three fourths to my siblings. That would be good for my
brothers and sister, but we would all have lost the land and
house that my grandmother gave my mother.
To work my way around
problem #2, I really only have two options. One, my mother never
puts my name on a deed. The second option is to create a trust -
a legal instrument where an executor maintains an asset or
collection of assets for the benefit of one or more
beneficiaries. I would be one of the beneficiaries. My mother
would most likely be the executor. From my understanding, my
creditors can not come after the assets in a trust even if I am
the executor or the beneficiary. I will be contacting a lawyer
about this next week. I have already spoken with my lawyer who
is handling my current foreclosures, but he could do nothing
with the land my mother inherited as he is a Florida attorney
and the land is in Alabama.
I will get back with you
shortly on what I find out.
If you find yourself in a similar situation, seriously consider
getting yourself a local lawyer. If you have already been
through a similar situation, please email me what you did and
how it turned out. You can post a comment on the blog page, too.
I would really appreciate hearing how you dealt with it.
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