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SURVIVING WIDOW QUESTION


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First, just let me say, while I give my clients general advice about estates and trusts, I don't do estate and trust returns.

My client's spouse passed away 5 years ago. Her house and the related mortgage still has both her and her deceased

husband's name on both the property and the mortgage. Now she is trying to refinance and it's creating some issues.

What should have done after her husband passed away?

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Likely sign and submit a simple document to the county (or whatever entity handles the property records).  Probably a net zero taxes and all other issues.

Dealing with two estates at present.  Title of property has one name, passed away in '71, the other passed away about 5 years ago...

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I think sometimes it is just more work for the loan underwriter and they make a big deal, I have gone through four loans myself in the last 10 years and something always comes up.  One year, they wanted a CPA letter for my personal tax return which I prepare myself 🤬   Have your client send them the death certificate and to remove the deceased spouse with the refiance.

 

 

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2 hours ago, cbslee said:

First, just let me say, while I give my clients general advice about estates and trusts, I don't do estate and trust returns.

My client's spouse passed away 5 years ago. Her house and the related mortgage still has both her and her deceased

husband's name on both the property and the mortgage. Now she is trying to refinance and it's creating some issues.

What should have done after her husband passed away?

She should have re-titled the property.   It should be done now.   Go to the county records department with the death certificate and do this now.   It needs to be done.   Then try to figure out the step up in basis for future sales purposes.

Any other joint property (bank accounts, CDs, Brokerage Accounts, rental property, etc) should be retitled immediately as well.   If there were any stocks in a joint brokerage account, there is a step up in basis as well.

Not enough info to talk about an estate return, but since there is a refi in progress, I am guessing they probably did not have enough assets to worry about death taxes.

Hopefully, a tax return was filed in the year of death indicating the spouse died, so the IRS records are clean.   Even if there was no filing requirement, I always advise my clients to file a return in the year of death to make sure the IRS records are updated (fraud?).

Just my thoughts and what I share with my clients in this situation.

Tom
Modesto, CA

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In Virginia, this is normal for the real estate not to be re-titled on the death of the spouse.  When my mom passed away, all of the real estate held personally was still in joint name with my dad and I don't recall any issues with selling the property.  We did not have to deal with any mortgages as they had no debt to speak of.  I think mortgage originators are either lazy or just looking for something to question so they can "demonstrate" they are doing their job of checking everything thoroughly. 

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On 11/7/2020 at 9:42 AM, Gail in Virginia said:

 I think mortgage originators are either lazy or just looking for something to question so they can "demonstrate" they are doing their job of checking everything thoroughly. 

Yes Gail - they are looking for ironclad documentation that will save the egg on their face if something doesn't work.  Even if there is no possibility of that happening.  One of the things that has surfaced in the last 10-12 years in Tennessee is the idea of a "medallion notary."  Whereas the signature of a notary would be sufficient, now this "medallion" notary is bonded, insured, and has to large fees to cover liability insurance and other increased costs.

Compared to 30 years ago, administrative work is five times as more necessary, staffed by low-paid personnel who are not accountable for performance, and generally part of a morass of sludge and inefficiency.  It's no wonder that in the skilled trades, those people are plenty busy, hard to find, and are now making a ton of money because of the law of supply and demand.

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  • 2 weeks later...
On 11/7/2020 at 7:42 AM, Gail in Virginia said:

  I think mortgage originators are either lazy or just looking for something to question so they can "demonstrate" they are doing their job of checking everything thoroughly. 

Sometimes you have to put yourself in other peoples shoes.  Substitute 'Tax Preparers' for ' Mortgage Originators'.   Think of the clients that come to you with an easy return and then get annoyed because you ask so many questions.

 

On 11/9/2020 at 9:52 PM, Corduroy Frog said:

Yes Gail - they are looking for ironclad documentation that will save the egg on their face if something doesn't work.  Even if there is no possibility of that happening.  One of the things that has surfaced in the last 10-12 years in Tennessee is the idea of a "medallion notary."  Whereas the signature of a notary would be sufficient, now this "medallion" notary is bonded, insured, and has to large fees to cover liability insurance and other increased costs.

 

We live in a highly litigious society where law suits are filed at the drop of a hat.  Ironclad documentation is not to prevent having egg on the face, but to prevent being sued.

When you criticize something, maybe you should be better informed on what you are criticizing.  There is no such thing as a 'Medallion Notary', but there is a Medallion Signature.  It is only used in the special circumstance of transferring some brokerage held assets.  The signature is not a notaries signature, but the legal owner of the assets.  This usually comes about when the assets have previously been transferred to accounts at different brokers, or when the street name has changed due to marriage, or some other circumstance.   

BTW, Medallion Signatures are not limited to your state, but are nationwide.   There has been no change to the traditional notaries and FYI in TN they Are bonded.

 

 

 

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On 11/22/2020 at 1:46 PM, Max W said:

When you criticize something, maybe you should be better informed on what you are criticizing. 

Max, if you've followed me, you know I'm outspoken.  I will not hesitate to present something fuzzy if it invites clarity. 

So in this situation, thank you for your opinion, and presentation of factual information.

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Notary, Signature Guarantee, Medallion. 

As far as I'm concerned, they're all variations on a theme and I couldn't for the life of me tell you the differences and legal requirements without looking them each up at that moment.  The only thing I know is that they have different requirements, serve similar but non-identical purposes, and you get them in different places for different fees.  I do wish they'd consolidate to something that everyone would accept.  

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On 11/6/2020 at 11:45 AM, cbslee said:

First, just let me say, while I give my clients general advice about estates and trusts, I don't do estate and trust returns.

My client's spouse passed away 5 years ago. Her house and the related mortgage still has both her and her deceased

husband's name on both the property and the mortgage. Now she is trying to refinance and it's creating some issues.

What should have done after her husband passed away?

@cbsleeThis post got off track somewhere.   Were you able to help your client with their issues?

Tom
Modesto, CA

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Just now, BulldogTom said:

@cbsleeThis post got off track somewhere.   Were you able to help your client with their issues?

Tom
Modesto, CA

We started the refinance process back in early September. I think we finally have all the documentation submitted that the mortgage company wants.

Now it's just waiting for them to grind thru everything.

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