You Can Have Your Cake & Eat it Too (Part 4: The Story of Two Friends)


Part 1, Part 2, Part 3

What about a Trust?

Marge and Elizabeth’s friend Betty lost her husband about a year ago. Like Elizabeth, Betty didn’t struggle with probate after her husband, Frank, died. In fact, she spent very little time settling Frank’s affairs, other than marking their joint income tax return as “final.”

Then, when Betty died two years later, her 3 children got together, expecting a hassle. But what they soon found out was that, like their mother when their father died, they had very little to do. Betty and Frank’s oldest, Michael, was able to take charge, sell the family home and cars, pay a couple of bills and then distribute all the remaining cash and investments equally to all the siblings. 

Although Betty’s youngest daughter, Vivian, desperately wanted her siblings to hold off on selling the house as she tried to convince her husband to move their family into the home, she wasn’t able to hold up the process. Everything was distributed as per Betty and Frank’s instructions in less than 4 months’ time. The family incurred less than $2,500 in expenses settling their mother’s (and father’s) affairs.

Betty and Frank used a living trust to avoid all of the problems that plagued Marge and Elizabeth’s families’ estates experienced at each generation. 

You can think of a trust as a container for holding assets. You carry the container (your trust), and then when you can’t handle your finances yourself, you hand off the trust to a person you chose ahead of time—called your successor trustee. 

Your successor trustee can manage your assets for you while you’re alive but unable to handle things yourself and can also take over after you pass away.

Your trust doesn’t require probate court involvement, and your successor trustee has the final word about management, which means your family won’t run into a situation where one siblings holds up sale of a house or other property. 

Trusts also protect beneficiaries against themselves. In Betty’s case, her second daughter, Lucy, is terrible with money, still overspending despite having filed for bankruptcy twice. If a share of Betty and Frank’s money had simply passed to Lucy, there’s no doubt she’d have spent it within six months. But instead of cutting a check to Lucy when the kids were receiving their shares, Betty’s successor trustee held onto Lucy’s share, distributing it only as instructed in Betty and Frank’s trust.

If this story has created a need to learn more about Trusts and whether your or your loved one's estate planning is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assessment. We can be reached at or 937-985-1843.

Selling Your Childhood Home (Part 3: The Story of Two Friends)

The Downside of Transfer on Death Designations

Part 1, Part 2

Let’s change Phil and Marge’s situation and assume that, in addition to recording a joint and survivor deed, they also recorded a Transfer on Death Affidavit naming their children as beneficiaries on their house. Now, after Phil and Marge both pass away, their children own the property together—each is 50% owner. 

Great, right? Phil and Marge planned ahead, avoided probate, and their bank accounts have been split evenly between their children, who are equal owners of their home.  

Marge and Phil's children get together a few days after the house is transferred to them. Amy, the older of the two talks to her younger sister, Fran, about some minimal upgrades they can make to the property to increase its value. Fran, who spent her entire childhood in the house, is uneasy with the idea of selling and talks in general terms about buying her sister out. 

Unfortunately, Fran’s credit is bad after her divorce and subsequent foreclosure, so she can’t get a mortgage to buy out her sister. Amy insists on a sale. The sisters’ relationship deteriorates over the next six months and they spend their first Thanksgiving apart since Fran was born.

As you can see in this instance the problem with Transfer on Death designations is that there’s no one left to manage your assets after you die. Without centralized management of your property, beneficiaries who receive property together all must agree before any decisions can be made about the property—selling, updating, renting all must be approved by all the owners, whether there are 2 or 5.

Amy’s insistence on the sale isn’t going to get her anywhere. Fran can obstruct a sale as long as she’d like, forcing the property to sit empty. 

When one beneficiary will receive real estate, a Transfer on Death Affidavit may be an efficient mechanism for passing property after death. For two beneficiaries, the arrangement can result in a statement. And for three or more beneficiaries, a Transfer on Death Affidavit nearly guarantees problems for the beneficiaries.

The other problem with not having centralized management is that there’s no one left to pay your debts.

There are fewer problems when bank and investment accounts are transferred to beneficiaries through a Transfer on Death designation, since accounts are split between the beneficiaries. But other problems can develop. For instance, if all of a person’s assets are distributed Transfer on Death, there is not a pool of assets that can be used to pay the deceased person’s debts. 

Your creditors can go after the assets you passed to your beneficiaries. If a creditor can’t find one or more of your beneficiaries, the remaining beneficiary or beneficiaries will be on the hook. Your beneficiaries can, in essence, take the money and run. 

If this story brings up questions about what your beneficiaries will get, when they will get it, and what they will have to do to get it, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assessment. We can be reached at or 937-985-1843.


Transfer on Death Designations (Part 2: The Story of Two Friends)

Part 1

What about Transfer on Death Designations to Avoid Probate?

Let’s assume that Marge and Phil’s deed was joint and survivor. 

When Marge passed away many years after Phil’s death, her children got together to figure out what to do about her things, including the house. It turned out that, apart from recording an Affidavit of Surviving Spouse, Marge didn’t take any other action regarding her house. 

Her children discovered that, because Marge died without a living joint owner, her home (and other assets) could only be distributed to her children through probate.

Marge wanted to avoid probate, knowing it was a tedious process, but she wanted all three of her children to share equally in the house after her death, and didn’t want to make all three of her children joint owners of the home with her.

Was Marge’s only option to avoid probate to make all three of her children joint and survivor owners of her home with her? No. Marge had another option.

If you name another person as joint owner of your real estate, you can’t take that gift back. They are owners of the property with the same rights as you! And this doesn’t just apply to real estate; it works that way with bank accounts as well. Parents often name one or more children as joint owners of their home (or bank account) in the hopes of simplifying their lives avoiding probate, but what they don’t realize is that their “gift”—whether they intended to make a gift or not—can’t be taken back, and the child named as co-owner of the home or account has no obligation to share the property with anyone else. It doesn’t matter what your will says. When you pass away, your joint owner gets the real estate or account.

What about Real Estate?

For real estate, you can sign a Transfer on Death Designation Affidavit, naming your desired beneficiary or beneficiaries. Then, after you pass away, your designated beneficiaries take over ownership of the property without having to deal with the tedious probate process. And a Transfer on Death Designation Affidavit doesn’t transfer anything to anyone until you’ve passed away. Unlike a deed, you have a right to change your Transfer on Death Designation Affidavit at any time before you pass away.

In Marge’s case, there were two options:

1. Marge and Phil could have signed a TOD Affidavit while Phil was still alive, naming their three children as beneficiaries of the property. Then, after Phil passed, the survivorship deed would have passed the property to Marge, and then on Marge’s passing, the property would have passed to their three children through the TOD Affidavit. No probate. No mess.

2. Marge could have signed a TOD Affidavit naming all three children as beneficiaries of her house after Phil passed away. Then, after Marge passed away, her children would become equal owners of the property.

The same principle applies to bank and investment accounts. Rather than naming children or other intended beneficiaries as co-owners of an account, you can name your children as Transfer on Death Beneficiaries of your accounts. And accounts are even easier to deal with than real estate. Your financial institution will provide you with a form for naming beneficiaries.

If you are unsure of your options and whether your or your loved one's estate planning is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assessment. We can be reached at or 937-985-1843.


The Story of Two Friends (Part 1)

Myth Buster: My House Will Have to Go Through Probate When I Die

Robert and Phil are brothers. Both are married and have 3 children. Both own a home worth about $150,000 and both have about $125,000 in savings. 

Robert and Phil died within 3 months of each other. 

Elizabeth, Robert’s widow and Marge, Phil’s widow got together about 3 months after Phil’s death. 

Elizabeth was confused and unsure what to do next. “I figured that since we were married, everything would be taken care of after Robert died. But I’m spending hours a day trying to get everything figured out. I couldn’t believe it when I found out that I had to go to court to get our house put in my name. How did you handle it all?”

Marge was a bit unsure how to respond. Her experience was nothing like Elizabeth’s. 

It turned out that Elizabeth had hired an attorney, spent thousands of dollars and now, six months after her husband’s death, it looked like the process was just winding down.

Marge’s experience after Phil’s death was quite different than Elizabeth’s experience after her husband died. Although she did hire an attorney to make sure she didn’t miss anything, she spent hundreds and not thousands. And settling her husband’s affairs had taken about a month instead of six.

Why the disparity between Marge’s and Elizabeth’s experiences after their husbands’ deaths?

The difference came down to planning. Both Marge and Elizabeth grieved. But during the grieving process, Elizabeth was embroiled in months of unnecessary hassle and spent thousands of dollars in fees because her and her husband hadn’t spent a little time and money putting a plan in place while they were able. Remember, Probate Courts oversee the administration of a deceased person’s estate. By keeping your house out of your estate you can avoid probate.

What about Joint Ownership with a Right of Survivorship? Will that avoid Probate?
When Marge and Phil purchased their home 10 years before Phil’s death, they both signed a deed that included their names, “Philip C. Black and Marge E. Black, a married couple.” 

About a year before Phil’s death, Marge and Phil went to their attorney’s office to review their estate plan and were informed that their deed was not a “Survivorship Deed.” Their attorney explained that a Survivorship Deed must include some “magic language” in addition to their names: “Philip C. Black and Marge E. Black, a married couple, and to the survivor of them.” 

Unfortunately, without the magic language “and to the survivor of them”, when one spouse passes away, the other does not automatically receive ownership of the deceased spouse’s part of the property. If that language is included, as it was in Marge and Phil’s deed, the surviving spouse receives the property without probate court intervention. A simple document called an Affidavit of Surviving Spouse must be filed with the county recorder, and the surviving spouse is recorded as the sole owner of the property.

The deed for Elizabeth and Robert’s home was either owned by Robert alone or it was owned by both spouses, and the deed did not include survivorship language. In either case, Elizabeth’s only recourse was to ask the probate court to transfer the property into her name alone. 

Any time a court is involved in any process, there are going to be delays and significant expenses. We won’t get into the intricacies of probate here—they’d require a 500 page book. The important thing to note is that the 6 or so words were of survivorship language missing from Elizabeth’s deed cost her thousands of dollars and 6 months of unnecessary stress. 

But what about the couples’ bank accounts? 

As with a home, joint ownership with a right of survivorship prevents a bank or investment account from passing through probate as long as the other joint owner survives the other owner.

This section is titled “Joint Ownership with a Right of Survivorship Avoids Probate… Sometimes” because of the final clause in that last sentence. If neither joint owner is alive, the survivorship language does nothing, and the property will become part of one (or both) of the joint owners’ probate estates. That’s the downside to joint ownership with a right of survivorship. It only avoids probate for so long. 

If this story brings up uncertainty whether your or your loved one's estate planning is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assessment. We can be reached at or 937-985-1843.

Does the "P" in your Problem stand for Probate?

What’s Probate?
When you pass away, your county Probate Court oversees the gathering up of your assets, payment of your bills, and distribution of anything left over. 

Why is Probate a Big Deal?
Probate is a problem because:
1.    The process is public. Anyone can see the court files and figure out how much you had and who it's going to. Do you want the public to know how much your spouse and kids are getting when you're gone?
2.    Probate is expensive. The fees and other expenses of probate typically come to between 2% and 5% of the value of your assets! Put another way, if you have $1 million in savings, your home equity, and a business, your estate will pay between $20,000 and $50,000 in expenses after you're gone!
3.    Probate is long. Probate takes no less than 6 months and the process often extends over a year. Your loved ones will have to wait to receive your gifts until the process is over. 

How can you avoid Probate?
Probate Court only oversees property you owned in your individual name. Jointly owned property, property with a living beneficiary named, and Trust property won’t go through Probate. So naming beneficiaries on your accounts will keep those accounts out of Probate. You can even name a beneficiary/beneficiaries on your house using a document called a Transfer on Death Designation Affidavit. 

Accounts are easy enough to deal with; they get split evenly between the named beneficiaries, but real estate is another matter. Each of the named beneficiaries owns an equal share of your real estate. And that means that your beneficiaries must agree unanimously before anything can be done with the property. A resistant beneficiary can hold the other beneficiaries hostage until they agree to sell out to the trouble-maker at a bargain price. 

How does a Trust help?
A Trust does the same two basic things a Will does:
1. It appoints someone to handle your property (called your "Trustee")
2. It gives that person instructions for how to handle your stuff.

A Trust is also like a legal "box" that you put your stuff into (your house, accounts, and personal property) to avoid probate. However if you leave something out of the Trust, it’ll have to go through Probate.

Assuming you’ve put everything you own in your Trust, because there's no Probate, your affairs will be kept private. There's no public record of the Trust and no one must know anything about what you own and who’s going to get it after you're gone.

Also, the cost of "settling" a Trust after you die is significantly lower than for administering an estate through Probate, and the process can be streamlined significantly. That way, your loved ones aren't spending tens of thousands of dollars and waiting a year or more to receive what you've given them.

If you're unsure whether your or your loved one's long-term care plan is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assement. We can be reached at or 937-985-1843.

You Can't Do It All

Staying Sane When Mom or Dad Needs More than You Can Give

I sat in the community room at the nursing home next to someone I love very much. His wife sat at my other side, a look of fear and confusion in her eyes. She'd been at the facility for rehab--a short term stay intended to get a person back on their feet after an illness or injury-but it wasn't looking like she was headed home anytime soon.  A move to the long-term care side of the building was imminent. 

"Don't leave me."

That's not something anyone is prepared to hear the first time; and when you can't stay, when a lack of sleep will affect your ability as a caregiver, when there just isn't any energy left to give no matter how much you want to help, you just have to walk out the door and head to your bed for a few hours rest.

Sure, you could have an orderly drag a cot into the room--and there may be nights where that's exactly what you do-but you can't do that every night.

What should you do when you've hit your limit, when you just have to walk away for a few hours?

1. Don't beat yourself up.  You're human. 

2. Take care of yourself. You aren't going to be any good to anyone if you aren't sleeping, if you aren't eating, if you're so run down you start to wonder if you're losing your mind.

3. Delegate. Don't try to do it all yourself. You can't. You're strong, you're capable of doing more than anyone else to help your parent, but you have to face the fact that you can't do it all. You're also not the person best able to care to all of your parent's needs. It's hard to hear, but there are professionals that can manage parts of your mom or dad's care better than you can. It's hard to hear, but it doesn't have to be you.

4. Do what you do best. But there are some things you can't, and shouldn't, delegate, to professionals. Even the most empathetic doctor, the kindest CPA, the most genuine attorney can't love your parent like you can. The bond you have is deeper than anything that'll form in the months (or even years) they're working with your mom or dad. Sure, they'll form tight bonds, and they may even have a lot of affection for your mom or dad, but you and your siblings are the only ones who can love him or her like a child. Don't skimp on being your parent's child to be his or her caregiver. 

5. Call someone. You could use a kind ear right now, and there's no shame in that. If you're angry, if you're scared, if you're sad. Talk to someone about it. Vent.

6. Take a deep breath. Seriously. Stop and take a deep breath-eyes closed. Now do the same thing a few times  day. You're doing everything you can, and your worry isn't going to help anyone, especially not yourself. At the risk of going new age on you, your breath is your connection to yourself, to your body. Don't take it for granted.

Starting Hard Conversations about Long-Term Care During the Holidays

Photo by monkeybusinessimages/iStock / Getty Images

The holidays are upon us! Time sure flies, doesn’t it?

One of the joys of the holiday season is family get-togethers. As technology has ”shrunk” the world, we’ve moved further from our families, leaving the holidays as one of the precious few times we have with extended family members.

Most of us prefer to spend these times enjoying our loved ones’ company, leaving serious business to the rest of the year, but family get-togethers offer an opportunity many of us won’t have at any other time of the year. Whether we’re keen to admit it or not, we’re all aging, and the younger generations play a crucial role in ensuring that we remain independent and happy  as long as possible.

The unfortunate fact is that most families doing “long-term care planning” are in a crisis situation. While we can make last minute, emergency decisions about where we and our loved ones will live during our golden years, outcomes are always better when we plan. They say you can’t plan for everything, but I believe that we can come pretty close if we act in time.

Planning six months ahead can make a huge difference, and a 5-year plan changes everything. Without advanced planning, many seniors end up in a nursing home long before it’s otherwise necessary or end up losing everything they’ve worked a lifetime to accumulate.

With a plan developed well in advance of long-term care needs, at-home care options as well as independent living and assisted living options that reduce the level of intervention and increased quality of life may be an option. Waiting until the last minute often ensures institutionalizations at a skilled nursing facility.

So what does it take to put a long-term care plan in place? The task can appear daunting, so we’ll break it into 7 steps.

1.       Have the conversation.

The first step is to have the conversation. You won’t know unless you ask. Would your loved one prefer to stay at home as long as possible, or would her or she prefer to move into a smaller living space like an independent living apartment? Does your loved one want to take steps to protect his or her assets from long-term care costs?

2.       Assess where things stand.

Another important step is to assess where things stands now. Have you noticed mom or dad slowing down? Have there been any cognitive changes since last year’s gatherings? It’s the last thing we want to consider, but 1 in 9 Americans age 65 and older has Alzheimers, and 3 in 9 age 85 and older have the disease. Early intervention makes all the difference.

3.       Put a written plan in place.

Putting a comprehensive written plan in place can be overwhelming. Most families don’t know where to begin or even which questions to ask. Professional help from an elder law attorney who is willing and able to put together a comprehensive long-term care plan will remove the uncertainty and get everyone on the same page. Many attorneys offer only documents even if they claim to do “planning.” Be sure your attorney is looking at the big picture.

4.       Visit facilities well in advance of need.

There are a huge number of options for long-term care. Your elder-law attorney should have the experience to steer you toward facilities that will  best serve your needs—and budget. In our experience, last-minute decisions rarely result in optimal living conditions.

5.       Review the plan regularly.

Everyone should understand their roles and its overall objectives. We recommend reviewing your plan at least every three years, but in many circumstances, an annual review is necessary.

6.       Update your plan.

Circumstances change, and your plan should keep up with your evolving family dynamic.

7.       Follow your plan.

If you’ve followed the prior six steps and have a caring advocate at your side, your plan should unfold with minimal confusion and discomfort. You’ve done the hard work ahead of time. It’s time to focus on what’s most important… your FAMILY.  

If you're unsure whether your or your loved one's long-term care plan is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assement. We can be reached at or 937-985-1843.