Should mom do a formal Estate Plan, or put everything into Joint Tenancy?

Dear Len & Rosie,

Mom is 78. She has some money, a little over $100,000, in a certificate of deposit and her checking accounts. She has put me on as a signer on all of her accounts. She lives in a trailer park. She owns her trailer, worth about $75,000, but pays rent on the pad. She wants to put me on the trailer so I could sell it if she got sick or worse. Can she do that? Would it accomplish her goal?

Lyn

Dear Lyn,

Your mother is trying to do her estate planning on the cheap. This isn’t such a bad idea, because she hasn’t got a lot of money, but it’s important for both you and her that she does it right.

If your mother gave you signature authority on her bank accounts, you will have access to her money, but only until her death.  If upon her death her accounts are worth less than $150,000, you can collect them 40 days or more after her death using a form provided by the bank or a declaration under California Probate Code section 13101. If the accounts happen to be worth more than $150,000, then her estate will be subject to probate in the courts. This would be expensive and time-consuming.

To avoid probate altogether, your mother can put her bank accounts and her mobile home in joint tenancy with you. It’s easy to do at the bank - the teller will do all the work for her, but it’s more difficult to transfer the mobile home. She will have to get transfer forms from the California Department of Housing and Community Development at www.hcd.ca.gov or have a title insurance company do the paperwork. But before she does this, she should check with the mobile home park. Many parks will not allow owners who don’t actually live there.

Putting you on title to her mobile home will make it easier after her death, but you wouldn’t be able to sell it without your mother’s signature unless she also gives you a Durable General Power of Attorney. She needs one, and she also needs an Advance Health Care Directive. If she should ever become incapacitated, there are all sorts of legal, financial, and medical decisions you may have to make on her behalf. Without a DPOA and AHCD, it could become necessary for your mother to be placed into a conservatorship, just to allow you to conduct business on her behalf. You can download a free Advance Health Care Directive at  www.lentillem.com.

Finally, if you are not the only child and your mother really wants to leave everything to you, then forget everything we said about your mother doing it herself. If your mother is planning on disinheriting her other children, she needs to see a lawyer, without you being there, to create a will to back up her putting everything into joint tenancy with you. If you were to get sued by vengeful siblings after your mother’s death, you’ll have a much better chance of winning if you’re not the only voice trying to convince the judge that your mother wanted to all to go to you. The lawyer and his or her staff will be neutral witnesses who can testify as to your mother’s wishes.

Len & Rosie