Transfer of property might draw creditors' attention

DEAR BRUCE: My mother has dementia. She and her credit cards have been taken advantage of by a family member whom she does not want to press charges against. All the cards are now overdue. The creditors are calling and I am trying to settle with them. The problem is my parents are on a fixed income, they own two old cars and their home is paid off. Their ages are 90 and 80, so we're really not worried about their credit. If these cards are not paid off, can they come after their house, or cars? I have power of attorney, and after they are gone I will be given the house and cars. Can they expect me to sell the house and pay? We also went to a bankruptcy lawyer and he said they have too much equity, and suggested that I put the house in my name now. Thank you for your assistance. — P.S., via e-mail

DEAR P.S.: Since your mother has dementia, it may be too late to press charges even if during a lucid moment she chose to do so. Since she is no longer able to handle her affairs, however, and you have power of attorney, you could press charges if you wish. Whether that would be worth it to you is another matter. Your parents are safe from having their property taken away from them, but the credit card companies could certainly get a judgment and lien placed against the family, which would be exercised upon your parents' deaths. Transferring the house to your name would clearly be an action to protect their assets, though such a move could bring its own complications. If the amount of money owed is small, the credit card company would probably write it off, but they would very much pursue a larger amount. I would contact an attorney and find out if the property can legally be transferred to you and how that would be accomplished given your mother's condition.

DEAR BRUCE: I have a checking, savings and a CD account, all in a trust for a beneficiary. I am told (not by a lawyer) that the only thing my son has to do to get this account transferred to his name is to show a death certificate and identification. I've talked to several attorneys from different senior groups and did not get an answer. I am not sure if the teller or the bank manager has the right answers. I am a widow, 84 and live in California. I have a will and a living trust for my home. I don't want the hassle or expense of changing the information in the trust. I hope you have an answer for me. I am assuming each state has different laws. — P.W.

DEAR P.W.: You can easily have regular checking and savings accounts and CDs, and have your son be the joint owner, with the funds payable entirely to him upon your death. It would appear that you are trying to avoid probate, and I see no reason for that. By the same token, what compelled you to put your home in a living trust? If your son is to be the beneficiary, have a properly drawn will, and, upon your demise, the home will belong to him (assuming there is no mortgage in place). Unless there are huge amounts of money that you have left unmentioned, simply putting your son's name on all of the accounts and designating him the sole owner of those funds upon your demise, along with the house and any other assets properly mentioned in a legally drawn will, should be enough. Why make it any more complicated than that?

DEAR BRUCE: I have two credit cards that I can no longer make payments on due to the loss of my part-time job and some serious health issues. I am 73 and have been a widow for 33 years. I live in an apartment and exist on Social Security plus a very modest savings. The credit card companies call almost every day. I explain that I neither have the resources to make a payment, nor do I anticipate that my circumstances will improve. One of the cards has a balance of $4,000, the other almost $6,000. I feel ashamed that I can't pay off these debts. The credit card companies keep telling me that if I do not make arrangements for payment, my credit history will suffer greatly. What kind of final outcome can I expect for this dire situation? — Reader, Green Bay, Wis.

DEAR READER: At your age, it's very unlikely you're going to find future employment. Obviously having no assets to speak of, bankruptcy could be an alternative. You might wish to talk to Consumer Credit Counseling Service. Upon examining your situation they may be able to negotiate an extended and far lower payment. I doubt seriously if you'll ever be able to pay this off. Your credit reputation is really not critical given I don't see any possibility that you will be granted more credit.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

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