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Copyright 1996, Marc S. Weissman Certified Specialist: Estate Planning, Trust and Probate Law Certified by the California Board of Legal Specialization of The State Bar of California Weiss & Weissman, San Francisco, California (650) 574-0362 To Contact us: email Phone/Fax/Mail Homepage |
This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
The house on Main, and the BofA account were held in joint tenancy with his brother. The life insurance named his brother as beneficiary.
Who gets what? Despite the specific language and intent of Mario, brother inherits the house, the life insurance, and the BofA account. Joint tenency overrides a Will, as does a life insurance beneficiary designation. The widow got an unhappy surprise, and an eviction notice from Mario's loving brother.
Bob's Will said, "After paying my bills, I leave my Partner $15,000, plus a 6 months rent allowance, and everything in our apartment. My sister gets everything else."
Unfortunately, the stock accounts were owned in Joint Tenancy by Bob and his sister; she gets those automatically regardless of the terms of the Will.
She is also the Executor of the estate. She blames the Partner for her brother's death (of AIDS). The Estate has no money (the stock accounts do not belong to the estate - they belong to the sister automatically); medical and credit card bills need to be paid.
The sister is going to sell the furniture to raise money to pay the debts (including her own fee as Executor). The Partner gets nothing. No money, no rent, no contents of the apartment. He has to move in a hurry, because he cannot afford the rent at the apartment.
It's not fair. But it's the legal result of what the dead guy did. He sure saved some legal fees by doing it himself.
No, you don't need a lawyer to do a Will (or Trust) but it doesn't hurt.
Andy died in 1995. He had a Will. The Will said: "I leave $50,000 tax free to Bob. I leave the remainder to my brother Jay. All death taxes shall be paid from the remainder of my estate." Bob also inherited half a house held in joint tenancy with Andy; the half was worth $500,000 and is included in Andy's net worth of $1,000,000.
Bob gets the $500,000 house, plus $50,000. Jay gets the balance of $450,000. But IRS gets $153,000. [The first $600,000 is tax free; tax on the excess is $153,000.] WHO PAYS THE DEATH TAX?
Since Andy was explicit about the $50,000, Bob gets that tax free. What about the house? Who pays the tax attributable to Andy's share of the house?
Either Bob gets the house tax free (and Jay gets only $297,000), or Bob must cough up about $75,000 as his share of tax. Bob doesn't have $75,000. Bob will have to mortgage the house to get the money to pay the taxes, if it is his responsibility.
"All death taxes shall be paid from the remainder of my estate." This clause has been interpreted variously by the Courts in California. Sometimes Bob pays; sometimes Jay.
Now, the Court must decide what was intended by Andy. What did Andy want? We will never know - he's gone. Now it is up to Bob's expensive lawyer and Jay's expensive lawyer to try to convince the Judge. Of course, each lawyer is convinced of the validity of his client's position.
Andy saved some money by doing it himself. Actually he bought a book and computer diskette from Nolo Press, a reputable Berkeley self-help publisher.
Bob and Jay have each spent far more in legal costs than Andy saved.
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