December 2021 Newsletter
Posted on December 2021
Dear Clients and Friends,
In the Office this Month:
Worst Assets to Inherit
Shortly after receiving last month’s newsletter, I received an email from Steve, a longtime client. He sent me an article from Kiplinger’s entitled “5 of the Worst Assets to Inherit” and suggested that I include the article in an upcoming newsletter. I do not have permission to use the article plus the article does not distinguish between assets that go through the Probate process and those assets that pass to heirs without going through probate. Going through probate is often what puts the asset on the worst list. Therefore, I decided to share my own version based upon my many years of handling estates both in and out of probate. In no particular order, her are the worst assets to inherit:
Stock Certificates. In years gone by, when you bought shares of stock, you received a paper stock certificate indicating the name of the corporation and the number of shares. I have seen certificates from 1 share to 10,000 shares. In recent years, these paper stock certificates have been replaced by “book” shares meaning the corporation (or its transfer agent) is keeping track of your shares. In the 1970s and 1980s, many insurance companies transferred from being a mutual corporation to being a stock corporation. To accomplish that, they issued stock shares to all the policy holders. Just this week I opened an estate to deal with 63 shares of Prudential stock. Last week, it was shares of Met life stock. If the person whose name is on the stock is alive, it is relatively simple to sell or transfer the stock. If the person whose name on the stock dies, without a co-owner or beneficiary, then we would need to open a probate to have a personal representative named to sell the stock. Remember, opening a probate leads to a process costing $2,000 and more. This is a real problem when the value of the stock is small. One of my clients was to inherit two shares of a corporation and one share of a second corporation. To transfer the shares, we needed the signature of a personal representative and the only way to get that was to file a petition with the court and the filing fee is $174. The total value of the 3 shares was $36. Sometimes the answer is to just abandon the shares as too expensive to probate. Remember, there is no cost to transfer or sell shares you own while you are alive.
Time Shares. There is probably no other asset that such a large percentage of the clients wish they didn’t have. Some clients love them; many wish they could get out of them. For those who want to get out of them, I am currently doing research on the various companies that claim to get you out of them for a fee. Most of them are a scam. You pay a fee but never get results. These time shares are often for decades and the contract you sign may run past your death. In many cases, your children may not want to inherit this asset since it requires an annual payment. This was the case of Christopher and Karen. I advised them not to add their children to the time share deed. That way they would not inherit the time share and therefore would not be responsible for the payments. If there was a probate of assets, the children could file a disclaimer stating that they did not want to inherit the asset. The disclaimer should be sent to the Personal Representative of the estate and to the time share company. It is highly unlikely that the time share company would file suit against the estate. They cannot file suit against the children who refused to inherit. If you have any experiences with time share companies in getting out of your contract, I would like to hear from you.
Guns. While the Army declared me to be an expert with the M-14 I am not an expert on guns. They only come up about once a year in an estate where the Personal Representative is not a gun person. Guns are highly regulated and the law varies depending on the type of gun. Some must be registered and others not. A Personal Representative may be committing a crime just to transport a gun in the trunk of their car if they are not properly licensed. My advice is to consult a respected and licensed gun dealer who can explain the various laws for all the different types of guns.
Collectibles. Most of us have collected something in our lifetime. I would have long ago retired if my mother had not thrown out my baseball card collection. And then there were those blue books with holes for all the pennies, nickels and dimes we could find for the right holes. As a result of time that I spent as Chairman of the Board of a charity doing work on the Navajo Indian Reservation, I began collecting American Indian art and artifacts. My collection’s value, like so many others, is known to me but not my family. They would not have any idea of the value of the collection or how to sell it on my death if I did not have a plan for that. Often collectibles end up in estate sales and sold off for pennies on the dollar of their real value. It is a good idea to have your collection valued while you are alive. One client, Bill from West Bloomfield, had a collection of Inuit statues that appraised for over $250,000. We arranged for it to be donated to a museum on his death. I have also had a lot of coin collections and stamp collections appraised. I still remember the stamp collection of US commemorative stamps and none were worth more than the amount of postage on the front of the stamp. If you have a family member who shares your love for your collection, designate them to receive the collection on death. If there is no one in the family who appreciates what you have collected, leave detailed instructions on how to determine its value and how to sell it.
Heirlooms. Many families have a one of kind heirloom that has been passed down for generations. My family is from the mountains of North Carolina and the heirloom is a double-barreled muzzle loading shotgun that was used in prior centuries to put food on the table. More often, it is a decorative item, a kitchen item or a piece of jewelry. You can designate a beneficiary in your will or trust or give it away before you pass. Otherwise, you set your children or other heirs up for a fight over a one-of-a-kind item. Sometimes these disagreements lead to siblings never speaking to each other again.
Around the Office
The office has been decorated for Christmas once again. Thanks to my wife’s large collection of Santa Clauses, decorating has been easy. Melissa and I were going to have a Secret Santa for the office but could not figure out how to make it work with just two people.
Seminars are currently schedule to begin in Mid-January. I am returning to Northville, Plymouth, Westland and adding Dearborn Heights. Please see our website, www.gfalawfirm.com, to view our updated list of seminar dates and times.
We are so pleased to help you with your estate planning needs. The best way to receive new clients is through referrals from you. In addition, there are people out there searching for someone to help them. They feel comfortable calling an attorney that has a 5-star rating and details of client experiences. If I may, I will continue to ask all of my clients who have not done so yet, to provide a Google Review for me. Not only will it give me more positive reviews, it may help someone out, that doesn’t have a referral available, find an excellent resource...me! It is easy to do and takes very little time.
Simply type “Gary Allen attorney” and hopefully my information should pop up (if it doesn’t, call me).
On the right of your screen are gold stars and the number of Google reviews I have. Click on the google reviews and it will take you to my reviews.
Then in the top right corner it says in blue “Write a review”. Click on that to provide a review.
(It may have you sign into your Google account if you haven’t already. Thanks!)
Please feel free to share this newsletter with your friends and family.
Very truly yours,