By Tim Barkley. July 2016.
“My wife just passed away,” the client said, matter-of-fact mien betrayed by a moistening of the eyes. “She was my power of attorney and executor of my will. I think I need new papers.”
“I’m sorry to hear,” the lawyer replied. “When did she die?”
“Around Valentine’s day,” the client clarified. “The kids and I have been working through things and I think this is the last thing I need to do.”
“So was everything in joint names?”
“Yes, except her IRA and an annuity, and I was the beneficiary. We’ve taken care of those.”
“OK. Who is the backup for your power of attorney and will executor?”
“My oldest daughter.”
“She could still take care of things,” counseled the lawyer, “and would just have to present your wife’s death certificate to anyone she was working with. So the simple fact that your wife passed away doesn’t really necessitate redoing your documents – except that your backup might not have a backup now.”
The client nodded. “My daughter and her husband moved to California for work, too, so that would make it harder for her to take care of things if something happened to me.”
“Who else do you have?” queried the lawyer.
“I have two sons. One is in the military and always seems to be posted overseas. The other one is local.”
“Would you be equally comfortable with any of them as power of attorney or executor?”
“Probably, but the one in the military would have a hard time getting home to do anything longterm.”
“Well,” the lawyer pondered, “what about naming your daughter and the local son as what I call concurrent agents under the power of attorney. That means that either of them could do whatever needed to be done. For example, your daughter could pay bills online from California, while your local son could do things that required you to go to the bank or your broker.
“We’d name both of them as joint executors of your will, but provide that they could choose when you passed away who would actually serve – both of them or just one of them. Your son who is in the service could be the backup. I’m assuming that everything would just go to kids when you pass away?”
The client confirmed with a nod.
The attorney continued: “Do you have a medical directive? A ‘living will’?”
“Yes, but my wife is on that too.”
“We’d probably handle that the same way as the power of attorney.”
“OK, let’s do that,” the client agreed. “What about the deed? Do I need to take her off the deed to the house, or off the mortgage?”
“No,” replied the lawyer. “If you owned the house jointly when she was alive, it’s yours now and you don’t need to spend the money to change the deed. You can if you want to – some clients like to ‘tie up loose ends’ – but you don’t need to.
“The mortgage is just your responsibility. There’s no need to refinance or change that.”
“I’d wondered about that. So the mortgage company can’t make me refinance? We have a really good rate.”
“No,” assured the lawyer. “There’s federal law from the 1970s that prohibits lenders from accelerating a loan – making you pay it off or refinance it – just because your wife died. As long as you keep making the payments, they can’t do anything. Even if you weren’t on the mortgage, as long as the payments are made in full and on time, they can’t do anything.”
“Do I need to take her off my bank account?”
“The bank will probably do that as soon as they know she has passed away,” replied the lawyer, “but it can be convenient to keep her name on an account in case a check shows up payable to her. Technically you’re supposed to open an estate in her name, get a tax ID number for the estate, open an estate account and deposit the check into that account, but for little checks most people just deposit them into the joint account.
“So eventually you should take her name off the account, but there’s no rush.
“Let’s put a time on the calendar to review your draft will and powers of attorney so we can keep the process moving … “
Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
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