Examples of Estate Planning Mistakes
By: Dennis R. DeLoach, Jr.
1. The Case of the Long-lost Heirs.
About twelve years ago an Englishman came to the City of Clearwater to retire. He was unmarried, had no children, and made the big mistake of not preparing a last will and testament. When he passed away, we were asked to handle his estate.
It was necessary for us to do a lot of research to ascertain his heirs. Eventually, his heirs were identified and located. Affidavits, death certificates, and birth certificates had to be obtained and presented to the Court with a Petition to determine heirs. His approximately $160,000.00 was divided between seventeen beneficiaries.
Most likely, this was not what the gentleman would have intended upon his passing, but, due to the fact that he did not have a last will and testament, extended time and costs resulted.
2. The Case of the Twenty-Eight Year Relationship.
A man and a woman they lived together twenty-eight years. All of the assets were titled in her name only. Upon her death, the assets passed to her heirs at law. They did not pass to her significant other. How unfortunate.
3. Crossing out and Initialing.
A gentleman had a will and, in his will, he specified a $35,000.00 devise to a female friend. He subsequently had a falling out with his friend, and on the original of his will, he crossed out the paragraph and initialed it.
The question was whether or not that was a sufficient revocation, and the answer is that it was NOT. The person with whom he had the falling out received the $35,000.00.
How simple it would have been for him to add a codicil to the will or a new will written to exclude this person from his estate.
Long-Term Care Admission Agreements
By: Dennis R. "Rep" DeLoach, III, Esq.
When a loved one is being processed for admission into a long-term care facility, either a nursing home or assisted living facility, the family typically goes through a great deal of anxiety. One of the many confusing issues involves the facility admission agreement. Facility admission agreements tend to be quite lengthy and have many potentially confusing clauses or provisions. When reviewing these agreements, please consider the following:
- The elder should sign when possible. If the elder is deemed competent, this should be the first choice.
- The attorney-in-fact should sign when the elder is unavailable.
- The attorney-in-fact should sign for the elder, not as the responsible party. Generally speaking, it is preferred to legally bind the elder to payment, not the person signing the agreement, for any bills from the facility.
- The arbitration agreement, if present, should be crossed out when possible. Most facilities do not object to this action.
Of course, when you are looking at moving your loved one to a facility, we can help you choose the correct placement and review the facility agreement, among other legal matters.
Advantages of a Lady Bird Deed (Life Enhanced Deed)
By: Dennis R. DeLoach, Jr.
A Lady Bird deed, or enhanced life estate deed, allows property to pass automatically to one or more designated recipients at death without the need for Florida probate. The process begins by a grantor signing a deed to a grantee, but retaining the right to sell, use, and otherwise manage the property during the grantor's lifetime. Upon the grantor's death, the grantee files the grantor's death certificate in the land records, serving as proof of death, and the property then passes directly to the grantee without the need for probate.
Advantages of Lady Bird Deed:
A major benefit of using a Lady Bird deed rather than a traditional life estate deed is the retention of authority over the property during the life of the grantor. While a traditional life estate deed allows the grantor to use the property during his life, the grantor loses the option to change his mind. Once a traditional life estate is conveyed, the grantor may not sell, mortgage, convey, gift, or otherwise terminate the interest of the remainder beneficiaries without the consent of the grantee.
While a Lady Bird deed is similar in the sense that it allows the grantor to convey a future interest in the property and maintain a life estate, the Lady Bird deed also has the added benefit of maintaining complete control of the property during the grantor's lifetime. The grantor may sell, use, and mortgage the property during his lifetime without requiring consent of the remainder beneficiaries. Also, while the grantor of a traditional life estate deed may have to pay gift taxes for transferring the remainder interest, the grantor of a Lady Bird deed does not. This is so because the grantor retains the right to cancel the remainder interest conveyed to the beneficiary.
Maintaining eligibility for Medicaid Benefits:
It is also important to note that, generally, a traditional life estate deed triggers a five year waiting period for Medicaid benefits. However, an added benefit of using a Lady Bird Deed is that the execution of such a deed may not be considered a transfer of ownership for purposes of applying for Medicaid benefits. Using a Lady Bird deed in combination with the grantor's expressed "intent to return" to the property after being taken to nursing home, or the retained residence by their spouse, can have the advantage of avoiding the five year penalty period.
The law firm of DeLoach + Hofstra, P.A., does not specialize in tax law and any individual seeking to employ the above property conveyance methods should seek professional advice pertaining to tax ramifications.