Law Offices of RL Johnson’s Blog

CLIENT INQUIRY RECEIVED – Thursday, February 07, 2008 7:17 AM

They gave us this info through the church we are going to, think it sounds shady or no? They’re really trying to press people to donate money when they do this, plus, the software costs $3500. They’re telling us that we can have our house payed off in 4 yrs. Sounds too good to be true!

ST

ATTORNEY RL JOHNSON’S REPLY – Thursday, February 07, 2008 10:47 AM

My suggestion is this: If you have $3,500 to invest: (1) payoff your high interest credit cards, (2) buy some cheap term insurance, and (3) start planning for the following: (a) disability insurance for Rob (which he can probably get along with term-life insurance cheaper through a trade or business association); (b) start a retirement account(s); and, (c) open 529 (i.e., college savings) plans for the kids. Oh, give a little to the charity of your choice and claim the donation on your income taxes.

Most importantly, DO NOT waste your time money and/or energy with MMA. Here’s seven (7) reasons:

§ MMA is built on the idea that having a mortgage is a bad thing: This is simple not true! Here’s a link that explains it better than I can. http://www.ricedelman.com/cs/education/article?articleId=232 . In fact, I highly recommend this website for all of your financial planning questions.

§ You must have equity in your primary residence and that home equity line of credit (“HELOC”) that you’re required to take out must be a “revolving account.”

§ MMA completely ignores that fact that whatever amount you apply to your principal mortgage payment is ineligible for annual tax deductions (note that tax the deduction on mortgage interest payments is about 35 cents on the dollar!)

§ MMA ignores the importance of paying down high interest credit cards (some 18% or more). Compare 18% to the 5 – 8% you pay on your mortgage.

§ MMA won’t tell you that paying off your house sooner won’t increase its value.

§ MMA ignores the fact that if your (“HELOC”) is adjustable you could easily start loosing money if you don’t have a lot of disposable income each month or you spend more than you make.

§ MMA won’t tell you that a borrower with financial discipline who wanted to pay down principal could do so on her own, without a fancy product that charges a premium rate!!! Just make 2-3 extra mortgage payments each year and direct that they be applied to the principal. No big deal! Why do you need their software?!?

I trust that this message finds you well.

Take care,
/s/Rod

CLIENT INQUIRY RECEIVED – Saturday, April 26, 2008 2:50 AM

Rod,

Thanks for looking into that for me i appreciate it very much. So She is going to have to stay until we get her next green card. Is she going to be able to come and go to thailand as long as i work here? Is there anything I can do from here to try to help this thing along. So if I sign the form and send it to her She can start this thing 90 days from expiration? If they where going to make problems why didn’t they just send here back to Thailand? But I now the goverment is screwed. Is there a way from me to rectify or try to explain what has happend so we do not have problems down the road?

Rod I don’t understand one part of you letter. If she told them that she stays in the US for me this is a violation of her visa? She wants to be where ever I am at and vice versa for me. I really wish things could be easier.

JT

ATTORNEY RL JOHNSON’S REPLY – Saturday, April 26, 2008 4:57 PM
JT,

Following are my attempts to answer your specific questions:

1. “She is going to have to stay until we get her next green card. Is she going to be able to come and go to thailand as long as i work here?”

ANSWER: No and yes. Travel outside the U.S. is one of her rights as a “conditional” resident. I have attached a document that explains a conditional resident’s rights and responsibilities. However, as I indicate in my last email, the term “resident” suggests that she is expected to make the U.S. her home. You write that WT was told “if she wants to keep her green card she has to stay in the US.” I suspect that “stay” means she must make the U.S. her home. If WT leaves the U.S. with the intention of living in Thailand she forfeits her green card upon departure. Stated differently, if upon reentry WT communicates or gives a border officer reason to suspect that she has made her home outside the U.S., she could be prevented from reentering the U.S. for five years. Consequently, remaining outside the U.S. for six months or longer—while not prohibited—raises suspicion of non-U.S. residency.

WT can make her reentries easier by bringing documents that show that her home base is still in the U.S. These documents could include U.S. tax returns, a home lease, evidence of employment, or other relevant documents.

2. “Is there anything I can do from here to try to help this thing along[?]”

ANSWER: You have to wait until you’re within the 90-day window to submit your I-751 petition to remove the conditional status: However, you could complete the form per the instructions and begin collecting the “Evidence of the Relationship” documents that you must send along with your application (see I-751 Instructions, page 2). This way, everything will be ready once the 90-day window arrives.

3. “[I]f I sign the form and send it to her She can start this thing 90 days from expiration?”

ANSWER: Yes (see my response to question #2, above): However, because it is a joint petition I suggest that—to the greatest extent possible given your distance—you complete the petition together. This way both of you will be fully aware of what’s in the petition just in case WT’s called in for an interview.

4. “If they where going to make problems why didn’t they just send here back to Thailand?”

ANSWER: We can’t know what was in the mind of the border officer. Indeed, we don’t know that there will be a problem. However, I think that it’s fair to conclude that the officer didn’t want to make a snap judgment that would negatively impact you and WT for the next five years.

5. “Is there a way from me to rectify or try to explain what has happend so we do not have problems down the road?”

ANSWER: Let’s not get ahead of ourselves. We don’t know that there is or will be a problem. In fact, if there’s a problem USCIS should let you know in writing. Similarly, if a USCIS officer tells you or WT that there’s a problem with WT’a status, you should ask for a written summary so that you may respond precisely. When dealing with government agencies, it’s usually best to await a written request for information otherwise you risk needlessly offering information that could raise questions that didn’t exist previously.

6. “If she told them that she stays in the US for me this is a violation of her visa?”

ANSWER: No: Not in and of itself. The crucial issue upon reentry after a prolonged stay outside the U.S. (six months or more) is whether the green card holder has made her home outside the U.S. The border officer will ask the green card holder a series of questions designed to get at the truth of the matter. E.g., when she left, what she was doing while away, and where she makes her home. If upon reentry WT communicates or gives a border officer reason to suspect that she has made her home outside the U.S., she could be prevented from reentering the U.S. for five years.

I only mentioned a potential violation because you write that the border officer “[t]alked about some fine.” If the Service intends to fine a person, it does so because it suspects a violation of U.S. immigration law. Again, we don’t know that the Service intends to fine you.

I hope that this was helpful.

Please let me know if I may answer any question(s) that you may have.

I trust that this message finds you well,
/s/ Rod

Rod.

The wife has went back to the US. She said that they gave her a hassle about staying out for 6 months. Something about a fine. I called previously to her leaving and they said it would be no problem as long as she was back in time to renew her card. Next month she will be 6 months out from her green card expiration and we have to renew for the ten year. I could use a little help.

They treated her rather badly but then let her back in anyway. She said that they guy typed a whole bunch of stuff in to the computer. Talked about some fine. Told if she wants to keep her green card she has to stay in the US. The only reason she stays there is for me. I would much rather live in Thailand but it is just not possible right now. No money there. I just got back to Iraq from RR with WT I have to go to a meeting right now I will get back with you later. Could you give us a little guidance. I would appreciate whatever help you could give me.

JT

ATTORNEY RL JOHNSON’S REPLY – Thursday, April 24, 2008 8:00 AM

JT,

The following is in response to your requests.

1. WT ’s Green Card: You write, “Next month she will be 6 months out from her green card expiration and we have to renew[.]” You both must petition to remove WT’s “conditional status” within 90 days of her expiration date. Once WT’s within the 90-day period, you need to submit Form I-751, which I have attached along with the instructions.

JT , note well that you must sign the petition. If you don’t sign the petition, WT must request a waiver. Consequently, if you’re going to be away before and during the mandatory 90-day filing period, it’s probably best to complete and sign it on your end and mail it to her. Additionally, you must send the form with a money order or certified check for $545 (i.e., $485 + $80). Finally, pay special attention to the “Evidence of the Relationship” requirement of the petition (see Instructions, page 2), which lists documents that you must submit along with your petition. You should submit as many of the items from this list as you can.

2. WT’s Poor Treatment Upon Reentry: First, it’s important to note that border officers have enormous power. For instance, they carry the power of “expedited removal,” which means an officer can deny a green card holder reentry in to a U.S. if the officer spots a reason that the holder should not have been given a fiancé visa. If this happens at the border, the green card holder has to find transportation back to their home country and will be barred reentry into the U.S. for five (5) years.

Second, whenever an immigrant stays outside the U.S. for six months or more, the Service may challenge whether the immigrant has abandoned his/her U.S. residency. Consequently, border officers are trained to be suspicious of and question immigrants who have remained outside of the U.S. for six months or longer (in fact, staying away for a year or more guarantees that the immigrant will have to go to immigration court before s/he gets his/her green card back).

3. Potential Fine: Whenever the Service has reason to believe that any person has violated any of the provisions of the Immigration and Nationality Act, they will serve the person with a “Notice of Intention to Fine, Form I–79.” If you’re served with this notice, you’ll have 30 days to submit

“a written defense, in duplicate, under oath setting forth the reasons why a fine should not be imposed, or if imposed, why it should be mitigated or remitted if permitted by the Immigration and Nationality Act, and stating whether a personal appearance is desired.” 8 CFR § 1280.12.

If the border office mentioned a fine, then he suspected a violation of the Immigration and Nationality Act. In WT’s case, it’s possible that the border officer became suspicious of WT’s answers to his questions. For instance, if WT inadvertently communicated to the border officer that she plans to live in Thailand and the “only reason she stays [in the U.S.] is for [you]” the officer may suspect that WT should not have been given a fiancé visa. Be that is it may, you needn’t worry about a fine until and unless you’re served with a Notice of Intention to Fine, Form I–79.

However, whatever that officer typed could come back to bite you guys when your I-751 petition is reviewed by the Service. Remember, if WT does not plan to live in the U.S. permanently, the Service will not give her a green card.

I hope that this helps.

Please let me know if I may answer any question(s) that you may have.

I trust that this message finds you well,
/s/ Rod

CLIENT INQUIRY RECEIVED 2/7/2008 @ 08:13

Rod,

Bob died without life insurance. He left us about $50 in debt. I didn’t see any reason to probate his will, there wasn’t any money. He had a small (under 5K) retirement fund that he hadn’t cashed yet (he was 69 when he died). Well, now the fund wants him to start drawing a regular amount out. I called them and told them he was deceased. They want me to send a death certificate and then to roll the money into one of my retirement accounts.

There is also a small amount of Honeywell stock. I can’t find the stock, but I get $3 dividend checks every 3 months.

I don’t have any more death certs (I can get one if I have to).

I sold his van, refinanced the house in my name, paid off about 1/2 of the debt, and am chipping away at the remainder. Our son (age 19 and very stable) is living in the house (in Oklahoma) and I am working here in Detroit to make enough money to pay for the house and the credit card bills.

I need to know what kind of mess I’ve gotten myself into by my avoidance behavior and how to get out.

Thanks,

MS

ATTORNEY RL JOHNSON’S REPLY – 2/7/2008 @ 13:26

MS,

Following are some general comments respecting issues evident in your last email. The comments are general because—absent more information and a full document review—I am unable to respond to your overarching concern (i.e., how you best escape whatever “mess” your avoidance may have wrought). With that in mind, here are some thoughts regarding the visible issues.

1. Choice of Law

Generally, the state law of a person’s domicile controls the disposition of the wills or estate. A person’s domicile is the place s/he physically resides and for which s/he evidences a present intention of making a permanent home for an unlimited or indefinite period. It appears that Bob resided in Oklahoma. Consequently, rules particular to Michigan would be inapplicable. However, while each state has its own law governing the disposition of wills and estates, they generally follow a similar pattern.

2. Consequences of Failing to File Bob’s Will

Generally, the holder of a person’s will is required to promptly file it with the court having jurisdiction over the testator. I would have to consult Oklahoma law to let you know whether there’s a statutory penalty for avoiding probate.

a. Property that Passes Outside a Will
First, it’s important to note that there are categories of property for which a will is ineffective (e.g., houses, retirement accounts, proceeds from life insurance policies, and even brokerage and bank accounts can all pass to others outside of whatever a will says).

Second, jointly owned property is inherited automatically. For instance, if you own a piece of property jointly with another person, then that property isn’t governed by your will; it passes to you automatically at the other owner’s death by right of survivorship (the van you sold may have been such an item). I assume (I didn’t check Oklahoma law) that your home was held jointly with a right of survivorship. As such, probate was unnecessary.

To sum up, in the foregoing kinds of cases—while there are forms that must be filed—there’s no need for a probate court proceeding to transfer ownership of the property to the survivor.

To find out whether Bob had any other property with a right of survivorship, take a look at the deeds, titles, and account statements. Look for the abbreviations listed—usually at the top of the statement, after your names—to decipher what you find. If the property was owned as community property (CP), separate property (SP), or tenants in common (TI C), it does not carry a right of survivorship, and it would have had to pass pursuant to Bob’s will.

Having said that, the biggest consequence of avoiding probate is that creditors may not get paid because they received no legal or constructive notice of Bob’s death. This is the subject of the next section.

3. Creditors and Taxes Get Paid First

Naming a beneficiary for retirement or stock accounts doesn’t change a thing when it comes to the rights of creditors or the IRS. That is, even though Bob’s property has new owners, Bob’s executor is going to have to pay his estate’s outstanding debts or expenses (I note that you have already assumed this duty relative to the credit cards and the mortgage, which you re-fi’d). However, there remains a chance that Bob had other debts about which you don’t know. Indeed, this is one of the functions of probate.

The other function is to assess estate tax liability. The good news here is that most families aren’t subject to the estate tax at this point, anyone who dies with more than $2 million will owe some and transfer-on-death (“TOD”) and payable-on-death (“POD”) accounts count toward that total.

Again, I would have to consult Oklahoma law to let you know whether there’s a statutory penalty for avoiding probate.

4. Mandatory Distribution of Retirement Assets

Regardless of what Bob’s will says, Bob’s retirement accounts passes outside of his will and probate is unnecessary. Moreover, all financial services companies (i.e., insurance companies) require an account holder to name a beneficiary.

I am unclear as to the kind of account Bob owned. In your email you write that the fund now wants “him” to start drawing a regular amount. This sounds like an annuity. Conversely, you write that the fund wants to liquidate the account (i.e., wants you to roll it over). Not only does this suggest that you are the named beneficiary, it appears that Bob owned mutual funds. Thus, in order to assist you in this matter, I would need to see the most recent quarterly statement.

Finally, if you are the named beneficiary you will need to provide the fund with a death certificate and proper identification.

5. The Honeywell Stock

Bob’s stocks are probably held in a brokerage account; thus, more than likely he never held actual stock certificates in his possession. Every state but Louisiana and Texas has now adopted a law (the Uniform Transfer-on-Death Securities Registration Act) that permits TOD registration. (It’s also sometimes called “beneficiary registration.”) TOD registration provides for an automatic transfer without probate, directly to the beneficiary. The $3 dividend checks that you receive should provide you with the firm’s contact information. Again, a death certificate and proper identification will be required.