Estate planning in the Trailerhood needs help
September 1, 2018
I liked Max Gruenberg.
Max was a lawyer, and a long-time legislator. I did battle with him in both venues; as a trial lawyer, when we had cases against each other; and when he was in the State House of Representatives, and I was nominated to sit on a commission (Max grilled me for 45 minutes in committee, to the point that other committee members were asking him to hurry it up and finish, but then when my nomination came to the floor, he spoke in favor of it).
Max was a sincere guy. Even though I didn’t necessarily agree with his political philosophy, he was the kind of fellow who was always looking for common ground.
Max died a member of the House minority. It’s not easy being a member of the minority party in a legislative body. Any bill you introduce is dead on arrival. Max was an expert, though, at playing small ball. Sometimes he would persuade a member of the majority party to join him in support of a good idea, and that gave it a chance. He did that in 2014, when he convinced another legislator to sign on to a bill allowing for transfer-on-death deeds. That led to major changes in estate planning, since a person who owned real estate could record a deed which automatically transferred ownership when he or she died, thus avoiding probate.
When Max died, he had several more good ideas in the hopper. In his honor – since he had been in the legislature a long time and was well-respected – they decided to pass one of his bills. The one they passed allows a judge to consider the best interest of a pet, when deciding who gets the pet in a divorce.
Speaking as someone who once handled a divorce in which they were fighting over who got the dog, I was all for that. But I was hoping for a different bill.
Max had sponsored a bill allowing transfer-on-death provisions on a vehicle title. It didn’t pass. So you can put a TOD provision on your home, your other land, and of course your financial accounts, but not on your car.
At this point, if you are knowledgeable about estate planning, you might say “big whoop-tee-doo! There’s an easy solution for that, isn’t there? Alaska allows for a simplified procedure for very small estates, and that includes estates with vehicles up to $100,000 in value. So just put who gets the Toyota in your will, and your loved ones can still avoid full-scale probate by using this simplified procedure. Unless of course you have more than $100,000 in vehicles, in which case you can probably afford a living trust to avoid probate”.
And that’s true. Except for mobile homes.
Because mobile homes (technically called “manufactured homes”) aren’t registered vehicles. And the small estate procedure only allows the $100,000 limit for registered vehicles. Mobile homes are titled with DMV, but not registered. And they’re not real property, they’re personal property, so you can’t use a TOD deed.
This puts mobile homes under a different category for the small estate procedure. The law allows for the simplified procedure when “all other personal property” is less than $50,000.
That covers most mobile homes. I looked online recently, and most mobile homes in Alaska are safely under $50,000. That is, unless the underlying land comes with it. There is a process, by the way, to have the mobile home become real property by permanently attaching it to the underlying land, but your mobile home park owner might have an issue with that.
But if it’s under $50,000, that isn’t the end of the issue. It’s not that each individual asset has to be under $50,000, it’s the sum total of those assets that has to fit within the limit. So if you own your mobile home worth $40,000, but also have more than $10,000 in furniture, jewelry, tools, guns, and so forth… you’re over $50,000.
And that means, unfortunately, either probate, or a living trust. Neither of those options is very desirable for a small estate like that, because of the cost.
A law allowing transfer-on-death provisions on vehicles, including mobile homes, would make a lot of sense. I avoid getting political in this column, but perhaps in this campaign season, you candidates who have mobile home parks in your district – you know who you are – might pick up the torch Max left behind, and push this issue.
They’ll thank you for it in the trailerhood.
(Much thanks to Senior Voice reader Betty Springen for reminding us of this problem).
Kenneth Kirk is an Anchorage estate planning lawyer. Nothing in this article should be taken as legal advice for a specific situation; for specific advice you should consult a professional who can take all the facts into account.