September 2024.
Q: I’ve signed a Life Estate Deed so that my children will receive full ownership of my house without probate. Is there anything else I have to do?
A: Yes. It is still your responsibility to pay the mortgage, taxes and insurance – believe it or not, clients have misunderstood this. If you sell the property, the buyer’s title company might want you to take the kids off the deed for simplicity. We can do that for you, at a reduced cost. Just call us. When you die, your children will be responsible for insuring the property and paying taxes. They should contact me to have me prepare a “confirmatory deed” reciting that you are deceased and they are the record owners. This will clean up the tax record. They can take that deed to their insurance agent to get coverage. Your insurance won’t cover the property anymore, since you don’t own it anymore. If one of your children dies before you do, you should visit with me to discuss the effect of that change of events on your planning. Your property might not pass as you intend without a change to the deed. Life Estate Deeds are not a “set it and forget it” planning tool. They need to be maintained.
Q: I’ve done everything you suggested so my family can avoid probate. How will my funeral and last bills be paid?
A: You can prepay your funeral, if you have the funds. This means that you control the end of your story. Or your children can “assign” life insurance coverage to the funeral home if they are the beneficiaries. If none of that works, they can all contribute to your funeral – and your last expenses as well. If you’re worried about “the responsible one” being stuck with the funeral bill and all the expenses, and don’t want to run a bank account through probate just so it’s available for your funeral and last expenses, and if you trust “the responsible one” to do the right thing, you can set up an account as “payable on death” to that child. That child will have funds for all these expenses, and can then split the remaining funds with your other children – or not, if you want them to keep the excess for their trouble. Either way, put your intentions in writing. Of course, if you want certainty, probate is the most certain – and most expensive – option.
Q: I’ve heard that I have to register my business with the feds this year. Is that true?
A: You might have to register with FinCEN, the Department of the Treasury’s Financial Crimes Enforcement Network. If you are required to register, you have to disclose information about the “beneficial owners” of your business. All businesses must file their “beneficial ownership interest report” or “BOIR” by (a) 90 days after initial formation if formed after December 31, 2023; or (b) December 31, 2024 if formed before January 1, 2024. The law imposes a penalty of $500 per day for late filing or nonfiling. If this has not already been done by or for you, you should view the legal requirements and determine whether you have to file by visiting https://boiefiling.fincen.gov/. Your accountant might be able to assist you in filing.
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Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
Mount Airy
Maryland 21771
(301) 829-3778
Wills & Trusts | Estate Planning | Probates & Estates
Elder Law | Real Estate | Business Planning