Heir must be careful when preparing will for out-of-state parents

Older homeowners often ask their grown children to help draft a will or living trust, but problems can arise if parents live in one state and the kids live in another.

Q. I live in Texas, but my parents retired to Florida several years ago, and their home and all of their other assets are there. I am not a lawyer but I have helped a few of my neighbors prepare their wills, and now my parents have asked me to prepare one for them. If I help, would the will have to conform to the laws of my home state of Texas or to the state laws in Florida?

A. You can live anywhere in the world when you prepare a will of your own or put one together for someone else. The key is that it must conform to the state laws where the people who agree to the will reside - in this case, the Sunshine State, where your folks live now.

Though it's certainly generous of you to consider helping your parents devise their will, expect to spend countless hours researching Florida law to make sure you do it correctly. The very fact that you needed to ask this question suggests to me that your folks might be better served if they were to bite the bullet and pay for the help of a Florida-based lawyer or estate planner to create their will or, even better, an inexpensive living trust that will allow their property to pass quickly to their heirs instead of the long and costly probate process.

There also are some good will-making and trust-making computer programs available online or at most big-box retail stores. Some of my favorites are published by Quicken (www.quicken.com) and legal-publishing giants nolo.com and legalzoom.com.

Most of these programs are easy to use and sell for less than $50. Equally important, the software you buy or the online form you fill out will be tailored to the laws that govern wills or trusts in your parents' home state of Florida, even though you'll prepare it in Texas.

Q. We have been shopping for a new homeowner's insurance policy, because our premiums keep rising even though we have never filed a claim. All five of the insurers and brokers we have contacted quoted even higher rates. Four of them were evasive when we asked why they were quoting such high prices, but one finally told us that we'd need to pay more because our credit score dropped after we were late on a few mortgage payments and credit-card bills. Is it legal for insurers to consider our credit score to determine how much we have to pay?

A. Yes. Few homeowners realize that insurers in most states can use credit scores to help determine the rates that are charged, or even to adjust a policyholder's annual premium. Only California, Maryland and Massachusetts ban the practice.

A key reason why many insurers are worried about credit scores is that low scorers have, statistically, filed claims more often than those whose scores were higher. Desperate for money, some folks on the bottom rung of the FICO scoring system sometimes fabricate claims, inflate damage estimates or even set their own homes on fire in an attempt to collect insurance proceeds.

You were wise to contact several insurance companies and brokers to look for a better deal on your current policy. Supplement the search now by checking the numerous online sites, which may help you find even better coverage at a lower rate.

Many states operate websites that include estimated yearly premiums from several different insurers, based on the size of the home and other factors: Find links and lots of other valuable information at the site published by government officials who belong to the nonprofit National Association of Insurance Commissioners (www.naic.org).

If your sleuthing can't uncover any insurance savings because of your banged-up credit record, you should keep your current policy. Re-establishing a good history by making your monthly debt payments promptly could lead to future discounts, whether you stick with the insurer you have now or start shopping for a different policy in the future.

Also remember you can slash $100 or more from your annual premium by raising your deductible, which will save you money in the years ahead if it discourages you from filing smaller claims for, say, a windowpane that gets broken by a kid's errant baseball throw or a neighbor's dog that decides to dig up the daffodils in your garden.

Insurers don't like to pay such pesky claims, however small, and often will raise your rates sharply or cancel your coverage if you file a few of them within two or three years.

Q. Can I get a low-down-payment loan backed by the Federal Housing Administration to buy a new manufactured home, or does it only finance the purchase of traditionally built houses?

A. The FHA will finance manufactured homes - which often are prefabricated in a factory in several components and then transported to its permanent site for final assembly - provided that the house meets the government's Manufactured Home and Construction Standards. You can tell if these complex standards are met if there's a red certification label on each component that is shipped.

The FHA is part of the larger U.S. Department of Housing and Urban Development. To get more information about its various mortgage programs for homes of every sort, call the FHA Resource Center, (800) 225-5342, or visit the agency's website at www.hud.gov.

Real estate trivia: About 55 percent of all American adults don't have a will, a study by Harris Interactive found. The top three reasons respondents cited is that they believe the document would be too expensive to prepare, they don't have a house or a lot of other assets to leave behind, or they're just too lazy to fill out the paperwork.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2014, Cowles Syndicate Inc.