Estate planning attorney of Legacy Assurance Plan of America for Wills,Trust & Avoid Probate


Tuesday, November 29, 2016

Estate Planning | Being Vigilant in Maintaining Your Plan in Order to Keep Control and Achieve Your Goals

Summary: In a recent judicial ruling, a court gave a man's stepchildren the proceeds of two of his non-probate accounts even though the man had recently cut the stepchildren out of his will and had told a friend that that the friend would receive the entirety of the man's wealth. The man's plan did not achieve this goal of giving the friend "everything" because the man did not do the proper upkeep on the beneficiary designation forms tied to the non-probate accounts. This case serves as clear illustration of just how important proper estate plan maintenance is to the overall well-being of your plan.

The story of a Lexington, Kentucky man and the post-death transfer of his assets played out in the Kentucky courts recently. The distribution of this man's wealth potentially serves as yet another example of why estate planning maintenance is SO important. The facts of the case raised the distinct possibility that the man changed his estate planning goals but, because he did not do the proper maintenance work, he left behind a situation filled with uncertainty... which ended up requiring the involvement of the legal system and produced an outcome that may not have matched his true intentions.

In the case, the deceased man had no children of his own. He did, however, have two stepchildren. The man's wealth included both probate and non-probate assets. The man created a will that left everything to his wife if she survived him, otherwise everything went to his stepchildren. He also had an Individual Retirement Account and another non-IRA account with Vanguard Group. The beneficiary designations on both accounts mirrored the distribution plan of his will.

The wife died before he did. Initially, the man engaged in careful plan maintenance. He updated his will to name his stepchildren as the beneficiaries of his estate. Additionally, he contacted his IRA institution and obtained (and completed) the necessary paperwork to update the death beneficiary designations of those accounts, naming the two stepchildren as co-beneficiaries.

Sometime after engaging in this maintenance, the man decided that his estate planning goals had changed. He created and signed a new will. This will left his entire probate estate to an unrelated friend. The stepchildren received nothing. He spoke to his friend about this change in his plan. He indicated that the friend would receive "everything" from him. What he didn't do, however, was update his beneficiary designation forms with Vanguard. Once a year, Vanguard contacted him to inform him about the status of his beneficiaries. The provider told the man that, if the names were not correct, he needed to update the designations by going online or by calling the provider.

The man died without ever making this change on his accounts. Ultimately, the friend and the stepchildren ended up in court, battling over who was the rightful recipient of the death benefit payouts on the two Vanguard accounts. Both the trial judge and the appeals court sided with the stepchildren. The mere fact that the man informed his friend of his intention to alter his plan was not enough. The law required something called "substantial compliance," which in this case, meant updating the beneficiary forms. Not only was this true in the case of these accounts, the outcome would have been the same if the asset in dispute had been an annuity or a life insurance policy.

It is not 100% clear what the man's true goals were. If, however, he DID intend for his friend to get everything, including the proceeds of his non-probate accounts, and for the stepchildren to get nothing, then his plan did not achieve this goal and it failed to do so solely because he did not do the required maintenance on all of the parts of his plan. 

Friday, November 25, 2016

Revocable Living Trusts | More Than Just a 'Will Substitute'

Summary: Living trusts are sometimes called "will substitutes" because they can accomplish many of the same objectives as a will when it comes to distrbuting your assets when die. A living trust, however, can do much more than that alone. A properly created and funded living trust can also help you plan, not just for asset distribution upon death, but also for the possibility of mental incapacity during your lifetime. Your living trust can help you make sure you have a seamless system in place for the management of your assets should your health dictate that you are no longer able to make those decisions yourself.  

You have many options when it comes to creating your estate plan. Each options has certain benefits, and each has its limits. As you contemplate how to go about constructing your plan, it is important to understand what each estate planning tool can, and cannot, do for you.

One example of this is the revocable living trust. Many people may be familiar with the benefits and uses of this legal document when it comes to avoiding probate. The reality of that benefit is true. A properly crafted and funded living trust may help you distribute your wealth to those you wish to receive it while avoiding the costs, delays and stresses that can be associated with the probate administration process. Because your trust can accomplish this goal of wealth distribution upon the occasion of your death, similar to how a will distributes your assets when you die, that's why living trusts are sometimes referred to as "will substitutes."

However, calling a living trust a "will substitute" misstates, in some ways, exactly what a trust's benefits and limits are. If you engage in the proper sort of estate planning, your trust's benefits may not be limited simply to accomplishing the objectives otherwise available using a will. Potentially, your trust can do much more. An area where this clearly true is protection during your lifetime. Your will does not take legal effect until you die; it can do nothing for you while you're still alive. A living trust, though, has the possibility to be vitally important to you during your lifetime if you should lose your mental capacity (a/k/a your mental ability to make decisions for yourself.) 

If this should happen to you, your properly funded trust can direct what will happen with regard to the management of your assets. When you establish a living trust, you will name someone (often yourself) to serve as the trustee of the trust initially. You will also name the person (or people,) called a "successor trustee" or "successor trustees," whom you want to take over the management of these assets when you either die or are otherwise unable to make those decisions for yourself. So, if you become mentally incapacitated, and you have funded your assets into your trust, then the process of dealing with them transitions seamlessly from you to the person or people you named in your trust document.

Without this type of planning in place, it may be necessary for your loved ones to go to court and ask a judge to appoint what's known as a "conservator" to manage your assets. This process, which is sometimes known as "living probate," has the potential, just like any legal proceeding, to be time-consuming, expensive and stressful for you and your family. By planning to avoid the negative impacts of living probate, your living trust can be a lot more than just a will substitute.

Tuesday, November 22, 2016

Estate Planning | Don't Delay, Plan Today... To Keep Your Estate in Order

Summary: Whether it is your marriage, your health, your car, your home, your boat or your estate plan, all of these have some things in common. One of them is that all of the hard work you put into acquiring and building these things up end up being lost if you allow them to fall into disrepair due to neglect. With regard to your estate plan, one of the best ways to avoid this state of disrepair is through regular maintenance. By resisting the urge to put off periodic estate plan reviews, you be certain that you have a plan best suited to carry out your wishes and your goals, and reflect both the state of personal affairs in your life and the state of the laws where you live. 

When it comes to estate planning, it can be easy to procrastinate. There are dozens of different reasons people put off getting an estate plan in place. For those that clear this hurdle and get a complete plan put together and executed, this is not the end of the process. Many people know that they need to be pro-active in ensuring that their plan remains up-to-date. However, just like making an initial estate plan, maintaining an estate plan can be easy to put off. And just as with initial estate planning, it is imperative not to fall into this procrastination trap. 

Procrastinating the completion of your estate plan maintenance essentially creates a minefield of possible harms that can blow up all the careful planning you've done. One of these mines is a change in your personal situation. Life events that can cause this include divorce, marriage, a birth or a death, among others. A man in Virginia ended up leaving his ex-wife (instead of his current wife) a $124,558 death benefit payout from his life insurance because he did not do proper estate plan maintenance and, specifically, did not update the death beneficiary form on his life insurance after he divorced the previous wife and later married the subsequent one.

Another potential problem possibly awaiting your estate plan is a change in your state's laws. If, for example, you have a former spouse whom (unlike the man in Virginia mentioned above) you do wish to include in your legacy, and you have not updated your plan since before your divorce, your goals could be thwarted. Some (but not all) states have statutes saying that a divorce automatically invalidates any estate plan provision created to benefit the now ex-spouse. If your state didn't have such a law but then decided to create a new statute and adopt such a provision, then this person to whom you made a conscious and intentional decision to leave a distribution could end up getting nothing as a result of your plan not being updated to address this legal change.

Your estate plan "check-up" can serve other goals, too. It can allow you and your team of estate planning professionals to contemplate many questions, like whether a change in your amount of wealth might warrant additional planning steps, such as the additional of additional trust(s)... or whether you still have sufficient resources to pay for your final expenses and the other costs of carrying out your final wishes. 

Whether taking inventory of your assets, taking inventory of the changes in personal life or taking inventory of the changes in the law, your estate plan review can give you the confidence that you have a plan in place that is optimized to deal with circumstances as they exist now, not as they existed when you signed your original set of plan documents. 

Friday, November 18, 2016

Creating an Estate Plan | Don't Delay, Get Your Estate in Order

Summary: Most everyone considers themselves very busy with their day-to-day lives. Whether it is work or family or something else, chances are you have something (or some things) in your life that keep you daily schedules filled up. In the crush of addressing daily responsibilities, it can be easy to lose sight of things that may not seem like immediate priorities. Estate planning can be one of those things, making it easy to put off. Don't fall into this procrastination trap. Failing to take the steps necessary to get a plan in place is a serious risk and this gamble can proven extremely costly to you and your loved ones.

If you don't have a valid will and/or living trust, both your loved ones and the legal system may not know how you'd want your assets divided after your death. When this happens, the courts will classify your estate as "intestate" and will distribute your wealth according to certain laws passed by your state's legislature. Leaving your plan up to the laws of your state, instead of taking control of it yourself, can risk leaving nothing to cherished loved ones and also possibly leaving significant portions of your wealth to people that you did not want to receive it.

Should you want to avail yourself to the potentially time, money and stress-saving benefits of avoiding probate, you need to create a plan. There are many options available for avoiding probate, including living trusts, transfer-on-death deeds, pay-on-death accounts and other tools. Without a plan, your wealth must, as mentioned above, be distributed using the rules of intestate estates, which means going through the probate court process.   

If you want to make sure that you are best positioned to avoid (or at least minimize) death taxes, you need to have an estate plan. While the current exemptions values under federal estate tax laws are very high, the numbers when it comes to death taxes under the laws of certain states are less forgiving. Regardless of the state in which you reside, incurring both state and federal death tax obligations can be easier than you think, especially if you are a small business owner or a farmer. Your estate plan allows you utilize all the tools available, including gifting strategies, trusts and insurance products, to put your family in the best position possible.

Additionally, if you have minor children or children with special needs at home, you have extra incentive to plan. With a properly drafted and executed will, you can name the person or people you want to serve as the guardian(s) of your child. If your child has special needs, your plan can include special trust planning elements that will allow you to leave part or all of your wealth to your child with special needs without risking your child's eligibility to continue receiving essential government benefits.

Your planning process can make sure that you have a genuinely complete plan in place. This can include powers of attorney and trust planning that may protect you in the event of incapacity, as well as advance directives to protect your desires in terms of end-of-life planning. 

In addition, this process can be your opportunity to address other planning issues that you may not have even thought about. For instance, do you have a plan to cover your final expenses and the other costs of carrying out your estate planning wishes? If not, you may want to consider the options available to you in terms of life insurance and other insurance products, which can offer important assistance in achieving this goal.

Tuesday, November 15, 2016

Estate Planning For Smaller Estates | Why You Don't Need To Be a Millionaire To Need An Estate Plan

Summary: A lot of people think that estate planning is something that is only necessary if you have large amounts of wealth. This thought is wrong in almost all cases and, for some people, clinging to this thought can be a damaging mistake. Sometimes, people with extremely modest estates have circumstances in their lives that cause them to have a great need for extensive estate planning. 

A popular cable TV home channel broadcasts several shows dedicated to finding inexpensive properties on the beach or a lakefront. The shows’ openings proclaim, “…and it’s only for the rich… or so you thought!” For some, estate planning can like that. Too many people live under the mistaken thought that estate planning is only for the rich. Nothing could be further from the truth. 

A case that went through the Michigan courts recently provides a clear example. Emil Awad, a man from Bay County, Michigan, had what could be described as an incomplete estate plan. He had no will or other estate documents, but he had structured several assets to pass outside probate through the use of transfer-on-death designations. When he died in 2009, he had a probate estate that, all totaled, consisted of only about $50,000 cash and the contents of his home. He left behind no surviving spouse but he had three daughters that survived him. As his intestate estate worked through the probate court process, Awad’s creditors began making claims and, eventually, his debts were $18,000 more than his probate assets.

The daughters fought bitterly with each other over the distribution of the estate. The case went back and forth between the trial court and appellate court. In fact, the Michigan Court of Appeals ruled on matters related to this modestly insolvent intestate estate three times! The last decision, made this past winter, related to the personal representative’s efforts to pull certain non-probate assets into the estate in order to cover the estate’s unpaid debts. In the end, it is possible the personal representative and the daughters spent more in attorneys’ fees than the entire value of the estate.

All of this could possibly have been avoided through implementing a careful and complete estate plan. With an estate of only $50,000, Awad may not have needed a plan that included a trust. (Some families, however, might have a need for a trust, even if their assets are as small as Awad’s, if they have special circumstances, such as a child with special needs at home.) Regardless, Awad, like almost everyone, probably could have benefited from a plan that included a will, which would have given him the ability to clearly direct how he wanted his cash, his furniture and his other personal belongings divided up between the daughters and others. 

A complete plan could also have included powers of attorney and an advance directive, which can provide you with the ability to decide who makes decisions on your behalf when you cannot make them for yourself. These parts of a complete plan can benefit you significantly, regardless of how small or large your “bottom line” is. Just because you don’t have tens of millions of dollars to your name, don’t make the mistake of thinking that you don’t need a plan.

Friday, November 11, 2016

Estate Planning For Farmers | The Importance For Both Farm and Family

Summary: Family farmers, like other small business people, have some of the greatest needs for careful and complete estate planning. A proper plan can help you provide for your family and for the seamless transition and continued operation of the farm. This way, you can have the peace of mind knowing that you’ve provided for both the loved ones and the land that you’ve dedicated your life to.  

Family farmers represent the backbone of the American agricultural economy. They are hardworking and family-oriented. They may also, however, come from humble backgrounds and may not realize that the success of their family farming business gives them a great need for detailed estate planning, even though it definitely does.

Estate planning for a farm family can achieve many benefits. One of the chief benefits is to ensure the continued and uninterrupted operation of the farming business. To accomplish this goal, it is important to identify who you want to take over the farm after you die, and also make sure that the person you’ve identified is interested in taking on that responsibility. That’s why, with farm families, as with so many families, detailed and honest communications between you and your loved ones is a necessary precursor to estate planning. With proper communication, you can make sure that everyone is on the same page when it comes to handing down control of the farm’s operations.

Once you’ve decided on the “who” part of your plan, you and your estate planning attorney can get to work on the “how” part. Working with a knowledgeable attorney is important, because there are lots of varieties of estate plans that can be dangerous for farming families. For example, let’s assume that, as one of your goals, you want to save your loved ones the time, stress and expense of probate. One strategy that can avoid probate, which some people use, is to deed over the farm to the person who will to take over, while retaining a life estate for yourself. This probably will succeed in avoiding probate but, if your farming business has been successful enough that avoiding death taxes is another necessary goal, this plan may come up short. Using this plan will place the full value of your farm in your gross estate for Federal Estate Tax purposes and, depending on your circumstances, may leave your loved ones with a huge tax bill. 

You may be thinking, “The Federal Estate Tax exemption is so high, surely I don’t need to worry about that.” This can be a mistake, especially if you own a large farm. Depending on your acreage and the quality of your soil, your farm, if it is large, could by itself realistically have a value that clears the current exemption levels. What’s more, if your neighbors succeed in selling their farmland for high amounts, that may raise the “fair market value” of your land and make the FMV of your farm jump by millions of dollars very abruptly. In other words, it is important to create a plan that takes the potential risk of death taxes into consideration and, once you’ve put that plan together, to review and update it regularly to factor in any changes in death tax laws.

Another plan that some farmers might use to avoid probate is to “add” to the farm’s property deed the name of the child whom they want to take over upon their death. Again, this can avoid probate but potentially opens up many other risks. That child is now a full and current co-owner, which means that, if he becomes liable for a court judgment (such as an auto accident or a divorce,) the farm could be taken away from the family in order to satisfy this legal judgment. A proper plan can give you benefits of probate avoidance while also ensuring that you do not open yourself up to other pitfalls.  

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)

Tuesday, November 8, 2016

Estate Planning For Blended Families | Why Careful Planning Is So Important

Summary: Almost everyone has a high need for an estate plan. For some groups of people, this need is especially high. One of these groups is people who have blended families. If you have remarried but have children from a previous marriage or relationship, a well-crafted and executed estate plan can allow you to take control and leave the legacy you want for each of the loved ones in your life, as opposed to leaving the determination of these distributions to the prefabricated solutions of your state's statutes. 

Today, many older individuals have blended families. Whether you are a widow/widower or a divorcee, it is not uncommon to find a new partner and decide to marry that person. If you are a part of one of these ever-more-common families, your estate plan can offer you very substantial benefits. Without a plan, your legacy may be determined by your state's statutory laws, such as the intestacy laws and the spousal share laws. With a properly constructed plan, you can be in control. 

A case decided by the Kansas courts earlier this year offer a clear example. Charles Cross married his first wife and had three children with her. In 1983, he married his second wife, Marilyn. In 1992, the husband created an estate plan. His will stated that, upon his death, Marilyn got the couple's home, along with their furniture, jewelry, houshold items and personal effects. The will also gave Marilyn any autos the couple possessed. Everything else went to the man's three sons.

Cross didn't stop there, though. He named the wife as his death beneficiary on his life insurance and his IRA. He also created a revocable trust. The trust's income went to Charles during his lifetime, then (after his death) to Marilyn during her lifetime and the remaining accrued income to Marilyn's estate upon her death. The husband's estate plan went one step further. The husband secured Marilyn's signature on a document that officially announced that she declined her legal right to take her statutory spousal share of his assets, instead electing to receive the distribution laid out in the husband's plan. (In Kansas, as with all states, a surviving spouse generally has the legal right to choose to receive the distribution established in the deceased spouse's estate plan or else to take a specific portion of the deceased spouse's wealth that is defined in the statutes; however, a spouse can create a written document that waives the right of receiving the spousal statutory share, as Marilyn did in this case.)

After the husband died, the wife tried to challenge his plan. She argued that, because Kansas changed it spousal statutory share laws after she signed her document waiving her spousal share rights, she should not be bound by that document. The courts ruled against her. When she signed the wiaver document, she knew that her husband's plan left her with the income from the trust, the life insurance benefits, the retirement account benefits and the property listed in the will. She also knew that, by signing, she was accepting the distribution Charles created in his plan, and declining any distribution created by Kansas's spousal share laws. Because she signed the document voluntarily and knowingly, she had no basis to ask the court not to enforce the agreement. The wife's challenge failed and the husband's plan was carried out as written.    

In many situations, court cases involving estate planning tend to track a circumstance where the deceased person didn't plan, or didn't plan properly, and things went very wrong as a result. In this man's case, the opposite was true: he engaged in very extensive, detailed planning and, when the court case was over, his plan functioned as intended. Cross's plan is a prime example of how engaging in planning, especially detailed planning that goes beyond simply creating a cookie-cutter will, can give you and your family immense benefits.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)

Friday, November 4, 2016

Estate Planning | Unique Family Circumstances

Summary: Family circumstances are more varied than they were generations ago. Many states' intestacy laws, which take control when you have no estate plan, were drafted at a time when the model represented by the Cleaver family (of "Leave It to Beaver" fame) was the dominant norm. Today, families have more diversity and, if your family does not match the model of the Cleavers, you should give very serious consideration to ensuring that you have a well-crafted and detailed plan in place. Your estate plan can ensure that you are in control of the legacy you leave behind to each of your loved ones.      

When you have a family dynamic that is outside the traditional one, you may face many challenges. One important challenge is in the area of estate planning. If you do not create a plan, your state's intestacy laws will take control. Intestacy laws were meant to mirror the predominate family dynamics. In other words, these statutes are often a poor fit for dealing with families like yours. Creating a plan can avert these potential pitfalls. and put you in control. 

Take these two examples, one from fiction and one from real life, that both involve non-traditional families. First, in a popular television drama, a man learned that he had a daughter only after the child's mother was killed in a bombing attack. Upon discovering this child, the man promptly quit his highly dangerous job in law enforcement so that he could be best positioned to parent his newly-discovered daughter.

Second, in North Carolina, a 21-year-old man's estate received a jury award of one-half million dollars due to his tasering death at the hands of police. (As a quick note, this man's sad death contains multiple estate planning lessons, including that: (1) you are never too young to create an estate plan, especially if you have (or may have) children, and (2) you should never dismiss creating a plan under the mistaken notion that you lack sufficient wealth to benefit from planning. Although this man may not have been wealthy in his lifetime, it is clear that his estate had a value of at least $500,000.)

After the North Carolina man's death, the mother of an infant child went to court claiming that her son was the deceased man's sole heir.  The man's parents, who were the co-administrators of his estate, fought this in court, denying that the infant was their son's child. Under North Carolina's intestacy laws, if the man had no children, his parents would be his sole heirs, since he also had no surviving spouse. If he had a child, then the child would be his sole heir. The court eventually sided with the parents, because no DNA testing had ever been done and the father had filed none of the paperwork required by North Carolina law to have the child legally declared his. 

These two examples represent nearly polar opposites but both have one thing in common: they clearly indicate the advantages of estate planning. With a plan, there is no need to deal with issues of paternity in the probate courts in order to distribute your assets after your death. With a carefully and properly drafted plan, you can make sure that your wealth will be distributed your way. You can include provisions that expressly leave a distribution to a child born out of wedlock. This can be extremely important because, if there is no legal documentation to establish you as a parent, this child may be legally considered to have no relationship to you and no right to inherit from you. On the flip side, planning is just as important if you wish to disinherit a child. Whether you wish to exclude a child that is yours, or avoid the risk of court battles related to children who aren't your offspring, your plan can do this. Your documents can name the specific individuals and entities whom you want to take from your estate, and state that all others receive nothing. Other than state laws blocking the disinheritance of a surviving spouse, you generally have wide flexibility in the people you include in, and exclude from, your plan. 

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)

Tuesday, November 1, 2016

Estate Plan Gifting | The Pros and Cons

Summary: Each person's set of estate planning goals can be as unique as the person creating a plan. How you utilize gifts as part of your overall estate planning, or whether you will use them at all, can depend on a wide array of considerations that are a mixture of the legal and the personal. For those that may desire to include gifting in their estate planning, there are many possible benefits that they can realize, but there are downsides as well, if the gifting plan is not carried out carefully.

When people start to consider an estate plan, some approach this prospect with the idea that the best use of their assets is to save those assets during their lifetimes, or use them themselves, and then distribute what remains upon their death. For others, though, the greatest enjoyment of their wealth is derived from giving a portion of it away during their lifetimes. You can realize substantial benefits from using gifting in your estate planning, but it is essential to make sure that the gifting plan you undertake does not entrap you in one or more of the potential pitfalls that exist.    

One of the first things to consider is making sure that your gifting plan doesn't create negative tax consequences. Federal tax law sets the annual gift tax exclusion at $14,000. This means that you can give up to $14,000 to as many people as you want and those are not considered to be taxable gifts for purposes of federal taxes. If you give somebody more than $14,000 in a year, this generally constitutes a taxable gift for federal tax purposes. There are certain exceptions to this, though, like tuition or medical expenses, or gifts to a spouse.

It's important to be aware that you do not have outright give an asset to someone for free for it to qualify as a gift under the federal law. For example, if you sell your SUV that has a fair market value of $40,000 to your daughter for $20,000, the federal tax laws view this as a $20,000 gift to your daughter. This is, of course, more than the $14,000 limit and would be a taxable gift for federal taxes. Another thing that can trigger a "taxable event" is adding someone to your deed. Say, for instance, you decide, as a means of avoiding probate, to alter the deed on your $250,000 home by "adding" your son, making the two of you joint tenants with right of survivorship. In this example, let's also assume that you receive no money from your son for this transaction. One of the consequences of this is that you have, under federal tax rules, made a gift to your son in an amount equal to 1/2 of the value of that home, or $125,000. (There are, of course, potentially less pitfall-filled ways to deal with this home and still avoid probate, such as a revocable living trust or a transfer-on-death deed.)

If you are also planning for Medicaid eligibility, it is vital to be especially careful. While the IRS allows you (as mentioned above) to make as many gifts in a year as you want so long as each one is $14,000 or less, the rules for Medicaid qualification are more strict. Even those gifts that are covered by the federal gift tax exclusion may possibly lead to a period of Medicaid ineligibility (a/k/a a transfer penalty) depending of the specific details of that asset transfer. 

If you want to engage in the gifting of assets as part of your estate planning, be sure to work with an experienced estate planning team, who can help guide you through the process and make sure that your generosity in the present term will not cause you or your loved ones problems in the future.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)