A plethra of questions...

[SarahJ]

What is the name of your state? California

My mother passed away. She was very ill for some time. She took my name off of a living trust because she needed to re-finance the house. My lawyer is seeking to petition the court to put my name back on the will because my mother obviously forgot to put it back on. She had liver problems, which caused her to forget. She also had Pulmonary Hypertension which made her extreamly tired. We have no doubt that she did not change the Trustee back, in time.

My question is, if we get the petition approved...Does that mean we avoid probate? My mother has $17,000 (or more) in credit card bills and I have yet to determine what she owes in medical bills. Can we use her car, which is paid for, to pay off the credit cards? Can we use a consolidation company to negotiate with the credit cards, or should we negotiate with them ourselves?

I lived with my mom (I'm 26) and I don't want to sell the house. It holds too much sentimental value for me, and all of those emotions. Eventaully I will go off to Graduate School, but I'm too wrapped up in this to think about applying before next Fall. I've heard they can put a lean on the house. Does this hurt your chances of selling in the future? My mom owes 280,000 on a house that is worth 400,000. The houses aren't moving in California. The house across the street has been ont he market for a year. If we try to sell the house quickly, at a reduced price of 300,000 what happens to the rest of her medical/credit card if the car and equity of the house cannot pay it off? Do they go after me...

My mom and I have the same name with the exception of my middle name. I have had creditors go after me, because they "mistakenly" don't look at our social secruity numbers. Is there anything I can do to prevent creditors for going after me, JUST because we have the same name (with the exception of the middle name, social and DOB). They've done it before...

 

[FlyingRon]

What do you mean she "took you off the trust?" A living trust is a revocable trust in presumably her name alone. You would have been the alternate/successor trustee. The trustee has nothing to do with the availability of financing.

All your other questions are further muddied by what assets are in the trust. The stuff in the trust doesn't need to be probated, the trust lives on automatically after her death. Other estate issues: debt unrelated to the trust assets and other assets not in the trust, are handled through the estate (not the trust) which will require probate for any asset distribution other than things like funeral expenses and taxes.

 

[Dandy Don]

What assets are in the trust and what is its total value? You avoid probate only if all of the assets were put into the trust--if there was anything of value left out of the trust, it will need to be probated. Did she leave a will or not?

She may have taken your name off of the trust because there may not be much left in the trust to distribute. Are there other beneficiaries besides you? Is it worth even fighting for?

You can't assume that the house won't sell--selling it is the best option and probably the only way to gain any type of profit after the mortgage is paid off.

DANDY DON IN OKLAHOMA ([email protected])

 

[SarahJ]

What do you mean she "took you off the trust?" A living trust is a revocable trust in presumably her name alone. You would have been the alternate/successor trustee. The trustee has nothing to do with the availability of financing.

All your other questions are further muddied by what assets are in the trust. The stuff in the trust doesn't need to be probated, the trust lives on automatically after her death. Other estate issues: debt unrelated to the trust assets and other assets not in the trust, are handled through the estate (not the trust) which will require probate for any asset distribution other than things like funeral expenses and taxes.

Well, according to our lawyer, Banks won't lend to houses that are Trusted. She was coming out of a fixed rate mortgage and it is possible that she took my name off, temporarily, to refinance the home. I am the only living relative, all of our family is in Ireland. I also lived with her (too scared to death to leave her). I am sure it was a living trust., but I'm not sure. My mother had transplant in 2004, and she told me she had everything taken care of, including the trust and a power of attorney. The only liquid assets she had was a car and her house. She refinanced the house, took extra money out to do renovations around the house. The car she owned wouldn't be enough to pay off all of her debt, so I imagine the banks would put a lean on the house.

I guess I don't understand the difference between the "what assets are in the trust" and the estate. If you have a trust, does that mean that creditors cannot collect those assets?

Getting more confused,
-Sarah

 

[SarahJ]

What assets are in the trust and what is its total value? You avoid probate only if all of the assets were put into the trust--if there was anything of value left out of the trust, it will need to be probated. Did she leave a will or not?

She may have taken your name off of the trust because there may not be much left in the trust to distribute. Are there other beneficiaries besides you? Is it worth even fighting for?

You can't assume that the house won't sell--selling it is the best option and probably the only way to gain any type of profit after the mortgage is paid off.

DANDY DON IN OKLAHOMA ([email protected])

She did leave a will. If I recall, she stated that we were to use the assets to pay off any debt. I had a really hard time reading the will. The assets in the trust were her house, and a car, but the car information was out of date. She wrote notes to me, some of which are out of date informing me of stocks, bank accounts, and retirement plans. Are those all liquid assets a bank could go after? Are there reputiable companies/or ways to negotiate with the banks/credit card/medical bills to reduce the debt? I'd like to keep the house, for a year maybe. At least for emotional purposes, ya know?

There is no other beneficiaries besides me. I'm the only living relative. My dad was murdered when I was 13 and my mom's family lives in Ireland. (Translation: This sucks) Houses in the area have been on the market for a year...it's california... It's probably irrational and emotional of me, but I feel that if we sold the house, we'd loose more money than if we kept it.

If we need to sell the house in a hurry, and we reduce the price of the house to an attractive figure, will we still be expected to pay any remaning debt that wasn't covered in the liquid assets?

And folks, don't name your children after you. Especially if they live in your home after 18 years old. Within the past 3 months (I check my FICO regularly) somehow my mother's social secruity # is on my credit report....I'm just waiting for the credit cards to come after me....Ugh.....This is such a freaking mess! I imagine that willmake the probate issue even WORSE....uggggh

 

[Zigner]

You really need to consult with a probate attorney. Take all of your documents in for a consultation.
You sound very confused as to what plans your mother may have made. You say your mother left a will, but she had a trust. Generally, a will used in conjunction with a trust will simply transfer in to the trust any items which are not already in the trust. Then, the trust is used for distribution of said assets.

Also, as was said earlier, a house that is in a living trust can be re-fi'd...

 

[FlyingRon]

Well, according to our lawyer, Banks won't lend to houses that are Trusted.

Untrue. Get a better lawyer.

She was coming out of a fixed rate mortgage and it is possible that she took my name off, temporarily, to refinance the home.

Took your name off what? The trust? That doesn't change the ownership of the property? She can't take your name off the deed if it were there.

I guess I don't understand the difference between the "what assets are in the trust" and the estate. If you have a trust, does that mean that creditors cannot collect those assets?

You need a lawyer or at least an estate planner who has a clue what is going on.

A trust is essentially an entity that can hold property (similar to a corporation). There are different kinds of trusts, but the common one used for estate planning are the revocable living trusts. Essentially it's one big grace is that it lives on after the death of the person who created it. This means that you don't have to go through probate (a court proceeding where estate issues are settled). You can also appoint multiple trustees (which I suspect is what you were) who can act either now or in the case of death or incapacitation of the other trustee (your mom).

The estate is essentially all the assets and liabilities of a deceased person. The probate court names an executor to handle distribution of these.

If your mother pulled the property out of the trust. Then it is part of her estate and has to be probated.

The trust isn't however so independent of an entity that it provides much protection against creditors going after personal assets transferred there.