A Continuing Saga in the Life of the Old and The Frustrated

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by Guest Author, Certified Paralegal, Robin Crouch

Scene 4:  “Silver Slippers” and The Gym

Having recently joined a local gym designed for women, like me, who may be intimidated by traditional gyms, I find the program interesting, and even fun.  This is the kind of place where nobody knows your name but everybody knows your game . . .

Dot and Hootie (so named for their exercise technique) were feeling pretty good about their regular workouts, about the weight they’d lost and the firmness they’d gained.  That is, until that pesky Flo bounced through the door, one more obstacle between themselves and thinner summer thighs of their dreams.  You see, Flo is planning her wedding, her THIRD:

The Casserole

Some months ago, Flo delivered her famous chicken casserole to a recent widower, Harry.  Flo was familiar with Harry and the lifestyle he and his wife had enjoyed together.  There was nothing Flo wouldn’t do to have that same lifestyle, after all, she deserves it.  Flo is a two – time widow, with two children of her own.  Flo has learned the ins & outs of probate court, she knows her rights as a surviving spouse.  As it turns out, Harry is quite a bit older and Flo has the motivation, not to mention a great pair of active wear shorts that ride the great divide.

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The Old and the Frustrated

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Today, I offer you the first in a mini-series of legal soap operas. I hope to present a light-hearted but serious look at some of the problems I see every day in my office: with the best of intentions, trouble follows ill-advised and poor planning. Although the stories are fictitious, the situations are typical of those I see on a daily basis. Your charge is to read and learn. See how many problems and lessons learned you can identify.

Scene 1: The Beauty Shop

When Betty sat down in the chair, she really had a lot on her mind. Mable could not draw Betty into their normal conversation about the Smith twins or the Rader widow. Even tattoos and short skirts seemed lost on Betty that day. All that Betty could think about was what she was going to do about the farm. With her husband, Herman, gone now for a year, and Betty just recently diagnosed with Parkinson’s, it was time to get the farm out to her kids, Sally and Jim. But it wasn’t as simple as it seemed: Herman’s kids were grown-ups when she married him married 5 years ago, nice enough while Herman was well, but they didn’t even visit when he was sick. She did not want her 200-acre farm, that her dad gave her in 1950 to go to his kids. She had to find a way to make sure that Sally and Jim could keep the farm in the family.
Lesson 1: Gifting the farm may result in several needless tax problems, e.g.
(a) federal gift tax & penalties may be imposed depending on the value of the farm
(b) the children will receive the farm at a carry-over tax basis which results in capital gains tax when the kids sell the property after mom’s death.
(c) Betty will lose her $250,000 capital gains exclusion if she sells her home during her lifetime.
She finally told Mable the problem and Mable gave her the best advice that 22 years in the people business had taught her: “You want to give that farm to Sally and Jim right way, just like Esther Wright did years ago with her kids. Esther went to Joe Futz. He’s a great attorney, been in the business for years. My husband knows him from the Elks and he’s really reasonable. He’ll just do you want without asking a lot dumb questions. He’ll just get it done”.

Lesson 2: Betty loses control of her farm when she deeds the property outright to her kids.

It was a hard decision, but Betty decided that Mable was onto something so she set up a meeting with Attorney Futz. Betty told Attorney Futz that she wanted to deed over her farm to her kids now, so he prepared the deed, as Mable had promised, wiithout any fuss. She was so relieved that she was able to keep the farm in her family. She knew that she had done right by her kids.