Widows Experience High Foreclosure Rate

One of the lingering twists to the real estate recession of the past five-years is that widows over the age of 50 are experiencing drastically increased foreclosures according to the AARP.  This glitch in the foreclosure crisis arises due to the prevalence of mortgage notes obligating husbands-only; when they die, their widows often do not qualify to refinance the mortgage note.  

According to the AARP study, the mortgage foreclosure rate for persons over 50 rose by 23% between 2007 and 2011.  The causes are believed to be the surviving spouse's fixed income, the increased cost of needed medication, and the small print on the couple's mortgage note.

Our rapidly aging population is also to blame.  This demographic has produced a disturbing Catch-22: to stay in the home, the widow must take over the mortgage payments; but in order to do that, the payments must be up-to-date.  In many cases where the wage-earning husband dies, especially following a long illness, the unsuspecting widow finds that the mortgage is already significantly behind.

Add to his dynamic the fact that, in general, elderly Americans are saving less and spending more.  Our elders between the ages of 65 to 74 are becoming indebted at the fastest rate of any other age-group.

In the case of a widow in poor health, the application process alone can be hazardous to one's health.  As veterans of the process can attest, the process features unanswered phone calls, and repeated requests by loan servicers for the same documentation.

The lesson implied in this ominous trend is to get your house in order, literally, prior to the death of one of the spouses.  This means that a married couple should make every attempt to place both spouses on the mortgage note so that refinancing the marital home is not necessary following the death of one spouse.

Another "best practice" is to have each spouse participate in paying the bills and managing the mortgage when one of the partners attains age 50.  Traditionally, one spouse takes primary responsibility over the bill-paying tasks.  Familiarity with the process will reduce stress levels when, for example, a widow finds herself as the only one left to keep the mortgage on track.

Finally, having an executed estate plan will reduce stress when a spouse dies.  Consult with an estate planning attorney in your  community to learn more about your options.  Good luck out there; if you don't look out for yourself, no one else will.

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SCOTUS Reprise: Stripper's Estate Gets Second Oral Argument

Money isn't everything, right.  Yet here is SCOTUS, taking a close second look at the money.

A case involving a Texas Billionaire's massive estate and a washed-up model turned stripper is on the SCOTUS docket for oral argument today, for the second time.  You recall this case.

The estate of former Guess Jeans model whose, er, "married" name was Vickie Lynn Marshall, and who worked under the name Anna Nicole Smith, has carried on the lawsuit she filed shortly after J. Howard's death in 1995 at age 90.

Plenty of eyebrows were raised and family feathers ruffled in 1994 when Mr. Marshall took Smith as his third wife.  Then he died and the lawsuits began.

And these lawsuits have just not stopped, despite (and perhaps because of) the fact that all the litigants have died.  Anna Nicole Smith died in a drug overdose in 2007, shortly after the U.S. Supreme Court reversed an unfavorable decision for Smith issued by the U.S. Court of Appeals for the Ninth Circuit.

The case involves the scope of federal jurisdiction, eventually engulfing three separate court systems. At his death, Marshall had long established a trust estate plan leaving everything to his son, E. Pierce Marshall, who was also named trustee of the trusts.  Smith contested the trust plan, asserting that Marshall told her he would leave a portion of his estate to Smith.

What would have been a simple, although large, Texas county probate tussle went federal when Ms. Smith was hit with a default-judgment for, of all things, sexual harassment.  She filed for bankruptcy in California and her deceased husband's trustee-son claimed non-dischargability along with libel for statements Smith allegedly made against the decedent.  Smith counter claimed in the bankruptcy court for interference with her husband's estate plan.

Now hang with me on this....

The federal bankruptcy court not only dismissed the trustee's claim, it awarded Smith nearly half a billion dollars on her counter claim, finding that Marshall's son did interfere with his father's testamentary wishes.  This ruling was taken to the U.S. District Court where Smith's award was reduced to a paltry $88 million.

In the meantime, in an entirely separate proceeding, a Texas probate jury found that the decedent's estate plan was valid, ruling against Smith.  These decisions were then considered by the Ninth Circuit who invalidated the federal district court's award to Smith, holding that the Texas probate court had exclusive jurisdiction over such matters.

SCOTUS disagreed back in 2006, reversing the Ninth Circuit and holding that some issues tainted by state probate court could legitimately find their way into federal court via a properly raised bankruptcy-related issue; i.e. Smith's counterclaim.  The High Court then remanded the case back to the Ninth Circuit for a determination on the merits of that claim.

On those said merits, the Ninth Circuit again ruled against the stripper.  Again, the stripper, this time through her estate because she had died, appealed to SCOTUS who once again granted certiorari.  Responding to her claims is the estate of E. Pierce Marshall, who died shortly after Smith.

And now, viola, oral argument, chapter two is here today.  Stay tuned for the result.

This time, the issue concerns the very nature of federal jurisdiction; delving even deeper into that subject than the first go around.

Regardless of how the High Court rules, the lesson we take away from this suit is that money drives the bulk of all litigation.  Sometimes justice is just roadkill along side the road.

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