Monthly Archive for July, 2008

Reverse Mortgages, Probate Liquidity and Medicaid Eligability

Published on July 19, 2008 in Estate Administration, Estate Planning, SSI/SSDI/Medicare and Special Needs Planning. 0 Comments Tags: , , , .

One of my favorite bloggers, Joel A. Schoenmeyer of the Death & Taxes Blog writes here about “the reverse mortgage probate problem and liquidity.”

A reverse mortgage results from a home owner age 62 or older converting the equity in their home into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you. It can be especially useful for the home owner but, as Joel points out, a real headache for their heirs after they pass away. The payments can be used to support a standard of living – which is nice – but I think the most powerful benefit from the reverse mortgage is that the income stream is not necessarily a countable resource for Medicaid eligibility.

Joel writes:

I’ve encountered this situation in the probate context a few times recently: mom dies, reverse mortgage is now due, and guess what? The house can’t be sold because of the bad real estate market.

The bigger problem, of course, is one of estate liquidity. When a person dies, there are bills that have to be paid. Some of those bills are small, and some of them can be avoided. But certain bills can’t be avoided, and are going to cause a real headache for your survivors if you’ve left them with no liquid assets.

Which is all well-observed… Its a cost-benefit analysis really, done with the help of your financial planner and an attorney experienced in probate and Medicaid eligibility that can help determine if its a good fit for your situation. Its risky, but it may be worth it near the end.

Thanks Joel.

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Not T&E, but, SHOCKING: Cutting Taxes = Less Money To Government

Published on July 19, 2008 in Uncategorized. 0 Comments Tags: .

Forgive my sarcasm but I can’t abide our government’s woeful ignorance of history, especially economic history:

From Paul L Caron of the TaxProf Blog comes a report by the Center on Budget & Policy Priorities on their finding that That Tax Cuts Lose Revenue:

The claim that tax cuts “pay for themselves” — i.e., cause so much economic growth that revenues rise faster than they would have without the tax cut — has been made repeatedly in recent years and is one of the many tax policy issues that is likely to receive renewed attention in light of the upcoming election. This claim is false. The evidence shows clearly that tax cuts lose revenue.

Didn’t we try this in the 80′s?  “Trickle-down-something”?  “Voo-Doo-something-else”?  I know I was pretty young, but I seem to remember something about that.  Anybody else?

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A Piece of History From James Brown’s (messed up) Estate

Published on July 19, 2008 in Uncategorized. 0 Comments

I’ve written on Mr. Brown’s troubled estate before.  Mark Jakubik brings us the most recent update with news of the recently approved auction of his personal property.

A South Carolina judge on Monday cleared with the way for an auction of James Brown’s possessions to be held later this week, giving fans a chance to bid on more than 300 items that belonged to the late soul singer.

The ruling is the latest in the long-running fight over Brown’s possessions. Some of the singer’s adult children have been at odds with the trustees, claiming money has been mismanaged. And several people – including some claiming to be Brown’s unacknowledged children and at least two women who say they were married to him – have come forward wanting a piece of his estate.

Other items that will be sold to the highest bidder include supplies used to help Brown acquire his neatly cropped, glossy hair style, including 80 hair rollers, picks, combs – even cans and bottles of hair products.

Several of the singer’s signature outfits will also be auctioned, including a blue satin cape with “Thy Name is the Godfather of Soul” in rhinestone, sequin and metallic embellishments.

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Dr. Martin Luther King & Corretta Scott King Estate Litigation

Published on July 11, 2008 in Estate Litigation and Recent Cases worth noting. 0 Comments Tags: , , , .

From today’s CNN comes this distressing story…

Bernice King and Martin Luther King III, two of Dr. Martin Luther King’s children are suing their brother, Dexter, the Executor of their father’s estate, accusing him of wrongfully taking money from both of their parents’ estates.

They allege that Dexter took “substantial funds” out of Coretta Scott King’s estate and “wrongfully appropriated” money from their father’s estate.

Bernice King is the administrator of their mother’s estate. Dexter King, the suit says, controls their father’s estate, which is registered as a Georgia corporation.

All three children are shareholders in that corporation.

The lawsuit names Dexter King and the corporation as defendants. It alleges that last month, the defendants “converted substantial funds from the estate’s financial account at Bank of America for their own use.”

“I can’t tell you that he’s gone out and used corporate assets for his own living expenses,” the attorney said. “What I can tell you for certainty is that by not providing Martin and Bernice with information about how the corporation is using its assets, he is essentially using those assets, appropriating those assets for his own benefit.”

The plaintiffs’ attorneys would not estimate the size of either estate. But one, Jock Smith, noted that a collection of King’s manuscripts and other items was sold in 2006 for a reported $32 million.

I (and I imagine most of my colleagues) will be keeping an eye on this one. While not likely to produce any revolutionary precedent, its hard to argue against these estate’s notability.

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Not T&E Law: Blogger’s Guilt

Published on July 4, 2008 in Uncategorized. 0 Comments Tags: .

Having happily emerged from my Catholic sarcophagus a mere 17 years ago, I found this subject intriguing. This post provides the verbose definition of Blogger’s Guilt:

“A fit of guilt, physical discomfort or dysphoria that occurs when one is too busy with an actual social or professional life to properly update one’s livejournal. Particularly prevalent in those who use weblogs as coping mechanisms, artistic or creative outlets or routine social tools. Popular sister terms are “blog guilt” or “livejournal guilt.”

Paul Horwitz of the PrawfsBlog adds the following insights:

My own take on it is that blogging is like exercise: once you get out of the habit, it’s very difficult to get back into it. The common complaint about blogging, most pertinently about blogging by scholars, is that it can be a thoughtless, trivial enterprise. It may thus be appropriate that the key to being a blogging regular is: don’t think too much. Once you start pondering and mulling, by the time you’re ready to blog you’ll either have missed the boat or will become convinced that the enterprise is so trivial that there’s not much point in sharing your thoughts in the first place.

I can really relate to blogging being like exercise… I also usually do feel better after having done it. It remains to be seen whether I’ll have the time in the next few months to avoid a crippling amount of this new-found guilt though some of it is inevitable… Trying to sell my house (which involves remodeling a bathroom), buy another house and change firms all in the same 45 day period (don’t forget billing time in there somewhere) will probably leave only a few hours in the month (if that) to do this, but I promise to try… I say that as much for you as for myself.

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All About Me!

Published on July 4, 2008 in Uncategorized. 0 Comments

My new bio is up at the new firm. So far everyone has been great, from the IT staff to our new office manager. It feels like a good fit and, despite the few unavoidable hiccups, things are going very well so far.

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