I know. It really should be an easy estate for the daughter although there is farm property involved (of which I have less knowledge than the daughter). I think the problem is that my friend thinks the daughter will have to do a lot of things that the lawyers will do. I have suggested that the estate be made a trust (or at least check into that) since there is only one kid.
If the daughter happens to be only heir (or would be inheriting the farm) AND she lives in one of the states that allows Real Estate TOD, that could simplify things. It may not be appropriate here, but thought I’d post since I’d consider it myself someday if widowed.
NOTE: Doing this does disqualify you from applying for Medicaid if needed someday.
While Michigan isn’t on the list, they allow a transfer upon death through a LadybBird Deed. This type of deed is allowed in a couple other states, I believe.
Why does establishing real estate TOD disqualify you from Medicaid if needed?
the short answer, from Google - When a Colorado property owner executes a TOD deed, the property is “considered a countable resource,” even if it would not otherwise be countable. That means that—for most practical purposes—anyone who records a Colorado TOD deed is disqualified for assistance under Colorado’s Medicaid program ."
More details Beneficiary (transfer-on-death) deeds & Medicaid eligibility | Chayet & Danzo, LLC
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The person still owns the property in a TOD deed. It doesn’t transfer until they die, so the asset is still owned, and thus the value would be considered for medicaid qualifications (although medicaid is mostly an income based program and some assets are allowed).
Good to know! I will send this to her. Wisconsin is on the list.
If you are looking for books on the topic, try your library. I was surprised to find a full shelf of them in our local library. I thought the NOLO books metioned above seemed good.
You can also buy them used on Thriftbooks… just be careful to get one from a recent year.
I heard a sad tale recently, where kids thought their parent had all their affairs in order. But after Alzheimer’s started to kick in, the step-parent took advantage and arranged new paperwork. Never told the kids (including one who was executor) and grandkids they were totally out of the picture. They found out after the parent died. So sad.
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After a parent died is NOT too late for the children to challenge the will. Especially if the executor has an earlier copy- which was signed when the parent was healthy and able to make decisions-- showing that the kids were supposed to inherit.
Good example of when getting a lawyer involved is worth it. Maybe the step-parent was within rights. Maybe the step-parent took advantage of someone who was no longer able to make decisions on their own. Maybe the parent changed his/her mind before Alzheimer’s. But that’s for the lawyers to untangle.
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My neighbor’s SIL just died rather suddenly. She never married, and she named the youngest of her three nieces/nephews (her godson) her sole heir. Unfortunately, he passed away in July. It looks like his stepdaughter will inherit, based on our state laws. The thing is, he married her mom when she was already on her own, and he really didn’t have much of a relationship with her - he & her mom were estranged, as well, when he died. The aunt wasn’t close to the stepdaughter or her mom. The surviving niece & nephew are meeting with a lawyer to determine whether contesting makes sense. We knew the aunt, and we definitely think that she is turning over in her grave because of the situation … but she should have changed her will as soon as her nephew passed. My own niece knows all about that , because my brother neglected to remove his many years-ex fiancée as beneficiary of his $150,000 life insurance policy before he died. Please remember to review & update heirs, beneficiaries & contingents!
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My mother died and her only asset was her car. Now we have to probate the will just to transfer the car. We thought we had this all down but now it is a mess!
I’ve been to the bank twice and called them twice and they kept saying “Oh, our team will call you, nothing to worry about” but then they send credit card statements saying she’s delinquent and canceled her line of credit. Gee, she probably doesn’t need that since she’s dead!
I am motivated to get all my stuff in order so my kids don’t have to do this. I’m going to make a ‘death file’ with my account numbers, titles, things to cancel, and anything else I can think of. It took me about a week just to cancel my mother’s doctor appointment and one office kept rescheduling and calling her, and I didn’t even know it because they kept sending her texts. My mother didn’t DO texts!
And I’m making my brother do it too as he has about 8 cars and 2 homes that have titles, and I’m sure all kinds of old bank accounts he never closed out.
I don’t want to do this again!
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I’m not an attorney, but check the probate laws in your state. In mine they have a simplified version of probate for small estates, and also the DMV in some circumstances can allow for a transfer just by affidavit (without probate).
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Any experiences with something called QTIP trust? I saw it mentioned on a website for a credit union’s financial planning services, new term to me.
There really is nothing to worry about. By federal law, interest compounding stops on day of death upon a death cert. The computers just keep sending bills, yes, but just stick them in a drawer for the Executor.
(pro-tip: credit card companies know that they are near last in line to get paid, so maybe willing to give the Executor a discount to pay off the balance.)
I am new to this thread and have not been in the situation, so do not have any experience about it.
I have a living trust, do I need to have a will too ?
I have a living trust and all my assets are in the trust except for one, while refinancing one of the property the mortgage company refuse to use the trust, now I am struggling to put that in trust, do I need to hire a lawyer and pay them $500 to do it or can I do it myself. I have tried to search the answer but could not find the steps easily and have been debating on how to handle this.
QTIP trusts were popular estate planning devices in the 70s and early 80s when the amount that could be given to heirs without large inheritance taxes was much lower (like $1 million). Now that each spouse can leave over $5 million, it’s not as popular.
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Reading more closely, QTOP is irrevocable. OK in many cases but probably a risk in others.
Our trusts and estates profs confided that they were just giving everything free and clear to their surviving spouse, never mind tax consequences and potential savings. I found that illuminating.
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Interesting.
That’s pretty much what we’ve done (via joint ownerships and Wills)… though our nest egg is small enough (under current rules) to not be subject to federal estate tax. And no CO estate tax. The inheritance step-up basis for investments is helpful.
When the financial planner has explained possible trust setups that could perhaps have tax benefits to the kids when we are both gone (if rules change), we’ve declined. Having them possibly taxed on “bonus money” seems OK, especially when I appreciate that my mother benefited from decades from Section 8 housing subsidies.
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