A Deed can seem like an insignificant document, but without it, you can’t buy or sell a property. In the following example, the buyer hadn’t recorded the Deed, and the title remained in the owner’s name for nearly two decades.
Nearly 20 years later, an unrecorded Deed surfaces
This case study comes from a property manager colleague, Jack, who got a call from Sally, a realtor who wanted to list one of his properties for sale. One big problem—this was a property that Jack had sold way back in 2000. According to public records, that property was still in Jack’s name.
Jack checked with the county recorder, and sure enough, Sally was absolutely right. Public records showed that Jack still owned that house. The buyer had not recorded the Deed and the title was still in Jack’s name. If Jack were dishonest, he could sell that property again and skip town with the illegal second profit. Given the inventory issues of the Bay Area real estate market, this transaction would have represented a significant windfall!
Despite Jack’s efforts to contact the buyers to understand why the deed was unrecorded, he has been unable to locate them. Possible reasons may have included avoiding property tax reassessment or liens on the newly acquired property. What this means for Jack: Without a clear title, he can’t sell this property. Now that he’s re-inherited his own property, he has to assume the responsibilities of ownership, including maintenance and property taxes.
Something that may surprise you: Unrecorded deeds are not uncommon
There are potential liability issues for both buyer and seller. If the title remains in the seller’s name, he could be named in any lawsuit involving the property.
If someone is injured on the premises and the buyer’s insurance policy doesn’t pay the claim, the legal title owner would likely be named in a lawsuit.
It is very unwise to become involved with a property without securing a title search and title insurance. Unfortunately, there are many people who try to save a few dollars by skipping a title search and not buying an owner’s title insurance policy.
Another cautionary note about Deeds: Remember the wild west refi market of pre-2008?
Think back to the environment of the mortgage industry before it crashed in 2008—these companies couldn’t process refi’s fast enough. Many of us were eager to refinance to leverage lower interest rates. The lenders were eager to help people take a property out of their Trusts, but in some cases, there was little regard to whether or not it ever got transferred back into that Trust via a Trust Transfer Deed. This might be a good time to check on the whereabouts of your Deed.
“Medicare policy has not kept up with the times.” This, according to Oregon Senator Ron Wyden, one of the authors of bipartisan legislation advocating expanded services through Medicare Advantage. California seniors who qualify will be able to get additional services such as help with chores, safety devices and respite for caregivers through private “Medicare Advantage” insurance plans.
Patients remain in their homes; costs are reduced
The change reflects the realization that simple home aid will not only impact patients’ wellbeing but will reduce costs for taxpayers. A couple of hundred dollars to install grab bars in the shower can prevent a fall that results in a broken hip, which can become a life-changing injury. For seniors who may be too old or frail to sustain hip replacement surgery, this gets complicated very quickly.
IHSS services include, but are not limited to:
Domestic and related services: Meal preparation, cleaning, laundry and taking out the garbage.
Personal care services/non–medical care: Bathing, feeding, dressing, grooming and toileting.
Paramedical tasks: Assistance with medications, injections, bowel and bladder care.
Protective supervision: Monitoring persons with cognitive or mental impairments to prevent injury.
IHSS is a statewide program administered by each county under the direction of the California Department of Social Services. It provides in-home care services to those over the age of 65 who are disabled or blind or have limited incomes. The program is designed to help these seniors remain safely in their homes.
Stepping up to address the healthcare needs of an aging baby-boomer generation
It begins to break down the wall between long-term care and Medicare–with very few exceptions, has never paid for long-term care.
There has to be a health-related reason to qualify, and costs will vary among plans. In some plans, there’s no added cost.
Limits do apply. For example, a plan may cover one day per week at an adult daycare center.
Nearly 23 million Medicare beneficiaries, or more than 1 in 3, are expected to be covered by a Medicare Advantage plan in 2019.
The private plans generally offer lower out-of-pocket costs in exchange for limits on choice of doctors and hospitals and other restrictions, such as prior authorization for services. It’s a growing business for insurers.
Insurance providers are following Medicare’s lead
Insurance providers are responding by addressing the many factors that affect the health and wellbeing of beneficiaries. Anthem offers different packages that include alternative treatments, including acupuncture, adult daycare center visits or a personal helper at home.
According to Medicare, 12 insurers will be offering expanded supplemental benefits in 2019 through 160 plans in 20 states.
In four other states and Puerto Rico, such benefits may be available to seniors with certain health conditions.
Medicare estimates that some 780,000 beneficiaries will have access to the new benefits next year.
In-home helpers and support for caregivers are the most popular.
Seniors should carefully consider if Medicare Advantage is best for them
Many people still need long-term care coverage for at least part of their lives, and it remains prohibitively expensive. Seniors trying to get long-term care through Medicaid, the program for low-income people, must spend down their life savings.
Consumer advocates recommend that seniors carefully weigh whether Medicare Advantage is best for them. If they don’t like it, they can go back to traditional Medicare, but those with preexisting conditions may not be able to buy a “Medigap” policy to help cover out-of-pocket costs. They can also switch to another Medicare Advantage plan.
Many of our Living Trust clients are either retired or thinking about it
This is the time of year when we see a lot of new clients who are following up on their New Year’s resolutions to create or update their Living Trusts.
But when was the last time you checked to see whom you named as the beneficiary on your retirement account, life insurance policy, or annuity? You’d be surprised at the number of people who have prior spouses or deceased relatives still named as beneficiaries on retirement accounts at former employers, or on life insurance policies purchased long ago and forgotten.
Updating a beneficiary designation: It supersedes your Will or Trust
The beneficiary designation is a legally binding document that supersedes your Will or Trust; neither will override the person you have named as your beneficiary in a life insurance policy, annuity or retirement account.
If something had happened to our client, his ex-wife would have inherited most of his assets
This story, unfortunately, is not that uncommon. It illustrates the importance of periodically reviewing your Trust allocations. Our client hadn’t reviewed his Trust in more than eight years, and he was shocked to discover that if something happened to him, all of his assets, exclusive of the home he held with his current wife, would go to his ex-wife, who was still identified as his Successor Trustee, his Power of Attorney and Agent for his Advance Healthcare Directive. We scheduled an appointment to completely rewrite his Living Trust.
A forgotten 401k plan beneficiary update results in husband’s receiving all of wife’s assets
Another client’s wife had worked for a large multinational for many years. It was a second marriage, and when she became seriously ill with cancer, she created a Living Trust. She wanted her two children and husband to each get one-third of her assets. However, she failed to update her beneficiary designation for her 401k plan, so that sizeable account went directly to her husband. He wanted to honor her wishes, but if he cashed in the 401k and paid it to the kids, he would have taken a huge hit on his taxes.
He and the kids set up an IRA in his name, and the kids were named as the beneficiaries. They agreed that, with each distribution he made to them, he would withhold enough to cover the taxes. While this ultimately worked out, it would be an ongoing administrative hassle. It could have been avoided by updating the retirement plan beneficiary form at the wife’s employer. When identifying your primary beneficiary, you should also name a contingent beneficiary. In this way, if the primary beneficiary predeceases you, you have already specified who should inherit the account.
Eileen Kobrin was 71, lived in New York City and led a busy, active life, but like many seniors who live alone, she worried that an accident would compromise one of the things she valued most–her independence. Two years ago, while on vacation, Eileen tripped and fell, breaking her ankle in several places.
The Caring Collaborative rallied to support Eileen
Thankfully, this Kaiser Health News story has a very happy ending. Eileen belongs to a Caring Collaborative Network, and the women in her group sprang into action to care for her. One member recommended an excellent ankle surgeon at the nearby hospital, who successfully operated. Once Eileen returned to her apartment with instructions to stay off her feet for two long months, other Network members brought over a wheelchair, a bath chair and an elevated toilet seat.
Every single day someone from the group arrived with lunch or dinner; some members just checked in to keep her company. “It was a tremendous outpouring of support–one of the most wonderful experiences of my life.”
Bringing senior women together to help with short-term illness or disability
The Caring Collaborative program originated a decade ago in New York City and has spread to Philadelphia and San Francisco. It brings senior women together to help one another when short-term illness or disability strikes. It fills a need that our healthcare system and other organizations don’t provide.
Most Caring Collaborative members are like Eileen—senior women who live alone and worry about finding this kind of support in the event of illness or accident. Many of them don’t have a strong support system, and their families are scattered around the country. In many cases, their friends have died, developed dementia, or become otherwise incapacitated. An estimated 35% of women 65 and older fall into this category. For those 75 and above, the number is higher, at 46%.
In a different time, these women might have relied on nearby family, neighbors, or their churches for support. But today’s families are dispersed, neighbors are often strangers and churches reach fewer people than in the past. Caring Collaborative is, at its core, a networking group, a way to meet new people and form relationships.
The Caring Collaborative has three core components
Information exchange. Members share information about medical conditions and medical providers.
Service corps of women who volunteer. This group provides hands-on assistance to other members.
Small neighborhood groups. These women meet monthly to discuss health topics and share personal concerns.
In New York City, many members are retired professionals who want to make new friends and explore activities after leaving the workforce. They often have similar interests and experiences to share.
Focused on her career at the expense of relationships
Barbara Alpern is the current chair of New York City’s Caring Collaborative. She joined four years ago after retiring from a long career in employee benefits consulting and becoming ill with complications from diabetes. Unmarried, she lives alone and had focused on work at the expense of friendships. “I realized I had nobody I could easily count on.”
Within months of joining the organization, Alpern sent out a request for somebody to pick her up from a colonoscopy and escort her back home. The woman who responded invited her for breakfast; over bacon and eggs they discovered a mutual love of theater. Several gettogethers followed and a new friendship was formed.
One loner forms her own neighborhood group
Naomi Goodhart, 64, who also lives alone, became a member after stepping down from a longtime position as a corporate executive assistant. “I’ve been a loner my entire life and have found making friends extremely difficult.” Since getting involved with the Caring Collaborative, Goodhart has formed a new neighborhood group in her area. She now describes herself as “the happiest I’ve ever been” because of a satisfying sense of purpose and the relationships she’s developed.
For emergencies, it’s still best to call 911
Responding to emergencies is not part of the Caring Collaborative’s mission; instead, it recommends that people still call 911.
“Help insurance”. Plan for it before you need it
Can the Caring Collaborative’s “mutual support in aging” program be replicated in other communities? Senior centers, aging organizations, senior housing complexes and other community groups could implement this information exchange component. One longtime health care executive and prior chair of New York City’s Caring Collaborative calls this “help insurance.” Unpaid, informal and essential.
Many of our Living Trust clients are retired or thinking about it