Monday, March 27, 2017
Monday, March 20, 2017
A woman, “Joan”, recently came into our Oakland office to talk to us about adding the names of her longtime partner and her daughter to the Deed for her home. As with many of our clients, health issues had caused her to think about succession planning. Joan had recently had a heart attack, and while she was recovering, it had been a sobering experience, and she was making lifestyle changes now to avoid further stress on her heart.
Joan was 72 years old and the home in which she and her longtime partner, “Jim”, lived was completely paid off. The title was in her name only, and she wanted to add Jim and her married adult daughter, “Claire”, so they wouldn’t have to go through Probate if something happened to her. Her neighbor had told her about revocable transfer on death deed. California offers this option so that real estate can bypass Probate. Joan would retain ownership of the home until she died, at which time it would pass to the people she designated in the death deed.
Bequeathing a home to two people who aren’t related: proceed cautiously
People should be thinking carefully about bequeathing a home to two people two who aren’t related or married. In this case, there are several things to be thinking about. Joan might have intended for Jim to stay in the home until he died, when he would pass it on to Claire. Relationships change when there’s money involved. The daughter, for instance, might have other intentions. She might have been more interested in the money she would make from the sale of the house in today’s inflated real estate market than Jim’s wellbeing. There are other issues associated with dual ownership. Maintaining a home is expensive. If Jim continued to live in the home and it required expensive repairs, such as a new roof, would Claire be responsible for half the costs?
A better way to avoid Probate: A Living Trust
A better way to avoid Probate is to create a Living Trust that identifies the process for the home’s succession. A Living Trust details the distribution of all assets, along with other items that may be of monetary or sentimental value. Joan would be able to specify that Jim would live in the home until he died, at which time the property would transfer to Claire. The home’s Deed would be moved into the Trust.
For Joan, our Living Trust package provides other benefits and some peace of mind that she needs at this point in her life. Our Trust package includes a Power of Attorney and an Advanced Healthcare Directive. In this way, Joan would be naming Jim or Claire to make decisions for her in the event she became incapacitated and no longer able to do this herself.