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IT WAS 1982 OR thereabouts. After attempting to be a landlord for several years, I decided it wasn’t for me. I sold the house and the four-family apartment building I’d been managing.
The final task in closing out this adventure would come at tax time. Keeping the books was the one aspect of being a landlord that I didn’t mind. I understood how accumulated appreciation would be recaptured and how capital gains tax would affect that year’s taxes.
Off to Sam the CPA I went, with my carefully prepared handwritten ledger of debits and credits. After a few anxious weeks, I finally received a call from Nancy, Sam’s administrative person. Great. My taxes were finished and ready for pick up.
Whoa, my balance due was $1,000 more than I’d calculated. In 1982, that was a formidable amount of money. As I reviewed the return, however, I realized Sam had made an error. My crude number-crunching turned out to be correct. This was the moment I learned an inconvenient truth about the tax prep business.
Most CPAs are up to their eyebrows in tax returns more complex than the Form 1040. The preparation of simple individual tax returns is often completed by an assistant or less experienced seasonal worker, whose work often isn’t even reviewed by the CPA.
What the heck? I was paying for Sam the CPA to do my taxes, not his secretary. That’s when I decided that I didn’t have to pay someone to screw up my taxes when I could mess them up myself for free. Twenty years later, Dan’s Tax Prep was born. But that’s not what I’m here to talk about today.
We last updated our wills seven years ago, after Chris and I got married. Marriage introduced new complexity to our estate plan, especially regarding beneficiaries. The attorney we hired interviewed us to understand our intentions and to offer suggestions.
One of our ideas was to file a transfer-on-death affidavit with the county to keep the house out of the probate court. Our attorney thought that naming two unrelated families—mine and Chris’s—on the affidavit could lead to differences of opinion when the time came to sell the house.
On the one hand, that made sense to us. On the other hand, it went against our desire to avoid probate. Still, we decided to take the counselor’s advice and not file the affidavit.
When we received a draft of our new wills for review, they were riddled with typographical errors affecting our names, address and other contact information. The meat of the wills was fine, which led me to a couple of conclusions.
First, a careless employee using a boilerplate software program prepared the documents. Second, it was never reviewed by the attorney. Sound familiar?
We recently moved into a new home. I brought up the idea of revisiting the transfer-on-death affidavit. Chris suggested that we file the affidavit naming only my daughters as the beneficiaries, thus avoiding the problem of unrelated parties fighting over the house’s sale.
Keeping in mind the lackluster job done by the attorney seven years earlier, and the fact that I’m pretty darned good at filling out forms, I researched the process involved with filing an affidavit. It didn’t look difficult. I purchased WillMaker software, which includes the transfer-on-death real estate affidavit tailored to Ohio.
I simply followed the prompts in the program. I had to make a trip to the county recorder to obtain a copy of my deed, along with a reference to the prior deed on the property. With the finished affidavit in hand, I made another trip to the county where it was reviewed and filed.
Now, all of our financial accounts and the house will pass to our beneficiaries via payable-on-death or transfer-on-death affidavits. All that’s really disposed of by our wills is the stuff inside our home. I suspect some of our stuff will be taken by the kids and some donated to those in need. I have every reason to believe that this will be accomplished without conflict and without the need to involve the probate court.
With the filing of the affidavit, however, the house will not pass via our wills. This means that our wills need to be updated again. Since there’s not much in the wills, I’m taking a stab at them as well.
I’m using the WillMaker program to complete our updated wills. I carefully compared the new wills with the old ones, and found all of the elements of each to be in agreement. The software allowed us to divide the property into unequal shares, to name each grandkid in case their mother has passed, and to name a custodian for any minor children.
In addition to documents like health care directives and powers of attorney, the software also has a template for letters to survivors. I’m enjoying writing mine. My hope is to leave ‘em laughing.
I probably wouldn’t have attempted this project if the software didn’t come with a money-back guarantee, but it seems to work well. I do have the added advantage of having a son-in-law who worked as an estate attorney in Ohio before taking a job with his alma mater in Indiana. He’ll grade my homework.
How did the review by my son-in-law work out? He caught a glaring error that could have affected my well-laid plans. When my oldest daughter married 22 years ago, she kept the name Smith. After 22 years, and with everyone referring to her by her husband’s surname, that little factoid was so far back in my mind that I never thought about it.
I’ve corrected our wills. I’ll also need to fix the error on our account beneficiary designations, as well as the real-estate affidavit I filed with the county. Everything else was in order. But it illustrates the importance of having a professional examine your will and similar documents.
For 30 years, Dan Smith was a driver-salesman and local union representative, before building a successful income-tax practice in Toledo, Ohio. He retired in 2022. Dan has two beautiful daughters, two loving sons-in-law and seven grandchildren. He and Chris, the love of his life, have been together for two great decades and counting. Check out Dan’s earlier articles.
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You highlight a very interesting point about using any professional firm–the difference between the titular leader and the actual performers. But I certainly find it hard to find the good performers in this mess.
Great article. Good reminder that we are ultimately responsible for our documents. Trust, but verify. I’ve never heard of a transfer on death affidavit. All attorneys are pushing trusts.
To be sure, trusts are a good tool for estate planning in many instances, but our situation is pretty basic, so I’m comfortable using TOD and POD. I set my folks up the same way and it worked flawlessly.
And for what it’s worth, WillMaker does trusts too.
Now that I’m older and retired, I find I have to proofread everything at least 5 or 6 times. If there’s a word the local spell checker is having a problem with I’ll highlight, right click, do an internet search, and usually the word I’m looking for will pop right up. Thanks for the tip on WillMaker, I’ll have to check it out.
I do the same thing when I’m righting……. Writing that is.
And a proofreader for less important documents. We know what we mean when we write and re-write things so we often miss the typos. Lots of good ideas in this article, Dan.
Indeed Linda. I try to keep in mind that the friendly tone in mind may not be the same tone being conveyed to the person reading my stuff.
I’m an Ohio attorney. I’m sorry that our profession failed you. The only solace I take is that our profession has fared no worse than all of the others that have failed us over the recent years, i.e. politicians, doctors, health professionals, military, government employees, etc.
Ben, I know many incredibly talented lawyers and accountants. I hope my attempt at humor doesn’t feed into a negative stereotype.
Dan, sounds like you did a great job and were wise enough to get a second set of eyeballs to review your work.
The truth is, we all need proofreaders and/or editors. I take pride in being careful with my writings, but it always puts a big smile on my wife’s face when she reviews one and finds a big mistake. She smiles a lot.
Same here Andrew, JC doesn’t get my articles before being scrutinized by my Chrissy.
If only a professional had examined your tax return and your original will. It sounds like you and your son-in-law make a great team.
It was an embarrassing error that went undiscovered in earlier docs. Even the daughter who was wronged by the error hadn’t noticed my screwup.