Q: My aunt, age 83, has no other living relatives than my sister, my two brothers and me. She is reluctant to make out any of these documents: a last will and testament, a durable power of attorney, a power of attorney for health, a living will (advanced health-care directive) and a power of attorney for financial matters. I believe she should have them all. Could you tell me the consequences of not having each one of these? I’m fearful that when she fails, or is debilitated, it will make it even more difficult for us to do the right thing. Maybe, if she sees your answer, it will get her to make a decision.
A: You can lead the horse to water, but you can’t make it drink. You can make recommendations to your aunt, but only she — assuming she is competent — can make the final decision.
Let’s take each document:
Will: If your aunt dies without a last will and testament, the laws in your state (called “intestacy”) will dictate how her assets will be distributed. That can lead to family fights, and the distribution may be contrary to her wishes. But unless she reduces her desires into a will, the probate judge will have to be guided by the laws of your state.
Living will: We all remember the Florida fight over whether the life support systems for Terri Schiavo should be removed. If your aunt should be determined to be brain-dead, but still alive, her doctors need guidance. In the absence of a living will, they may have to ask the local court for assistance, and this will cost money and may end up wasting your aunt’s assets.
Durable powers of attorney: Who will be able to sign checks to pay any of her bills?
Every American should have these documents. Contrary to what many of us believe, we are not invincible.
Q: This happened to a friend of mine. A condo listed for $725,000. He offered $650,000. The seller countered with $705,000. The same day, my friend countered with $670,000. The seller countered with $697,000. My friend thought about it overnight and decided to look at some different properties. Later that day, his agent called and told him that the seller had now decided to accept his offer of $670,000. Is this legal? What if my friend would have placed an offer on a different property and it was accepted?
A: It’s a buyer’s market nowadays, and your friend probably got a good deal. The seller obviously wanted to sell and did not want to lose your friend as a buyer.
Who is bluffing? In my opinion, both parties were playing poker, and the seller “blinked” first. This should be a good lesson for every potential home buyer: Negotiate price with the seller. Typically, the buyer makes an offer and the seller has three choices: accept, counter or reject. If the seller counters, then the buyer has those same three choices.
In good market conditions, buyers were so anxious to get the property that they submitted escalation clauses — “I will go up higher so as to beat any other offers the seller receives.”
But when the market slows down — as it is currently — sellers who want to sell will reduce their price so as to go to contract.
You raised an interesting question. If the buyer made an offer that the seller subsequently accepted, unless the buyer withdrew his offer, a strong argument can be made that they have a binding contract.
In your case, however, the seller countered the buyer’s $670,000 offer. That counteroffer legally eliminated the buyer’s offer, so had he gone with another property, he would not be liable to this seller.
