Tillem & McNichol

Len Tillem and Rosie McNichol

Dear Len & Rosie,

I have a half-sister in poor health.

She wants me to I get everything that is left in her estate when she dies. Her husband died and left everything to her and they had no children.

In addition to me, she has two half-sisters; one who is very elderly and ill and another who is quite well off.

She has listed my name only on her will and my name is on all of her bank accounts as a joint tenant.

She inquired about giving me a power of attorney, but her lawyer said that is was not necessary.

Is this going to work?

Joe

Dear Joe,

Everything that you hold in joint tenancy with your half-sister will become yours if she dies before you do.

You will need only to take a certified copy of her death certificate to each financial institution to remove her name from her accounts.

There won’t be any probate for these assets. Keep one account open with her name on it so you can deposit any refund checks that come in after her death.

If your sister has any life insurance policies or retirement accounts, she should make sure that she has named you as her pay-on-death beneficiary so that upon her death you may roll over her retirement accounts into Inherited IRA’s and stretch out distributions, and your income tax liability, over your own lifetime.

If there is no named beneficiary, her retirement accounts will pay into her probate estate and you will lose any opportunity to defer paying the income tax.

If your sister owns a home, she should see an attorney and create a trust or perhaps record a transfer on death deed.

We do not recommend joint tenancy deeds to avoid probate for homes and other land, because if you’re on your half-sister’s deed, she’s no longer in complete control of her home and her home could become subject to a judgment lien from your creditors.

Her lawyer may be technically correct in that she does not need a power of attorney to avoid probate.

But what if she becomes incapacitated?

If she’s ever unable to make decisions and manage her own affairs then a power of attorney is vital.

If you or another trusted person has her power of attorney, she will not likely need a court-supervised conservatorship if she ever becomes incapacitated.

Likewise, she also needs an advance health care directive so that you or another trusted family member or friend can make medical decisions if she’s ever incapacitated.

If your half-sister, or her lawyer, is concerned that giving someone a power of attorney means losing control of her assets now, suggest to her that she sign a “springing” power of attorney.

This is the type of power of attorney that takes effect only after one or two physicians certify that she can no longer take care of herself.

Consider it as a “just in case something bad happens” document.

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at 707-996-4505, or at LenTillem.com. Len has a new video channel on YouTube.

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