There are numerous ways to accomplish distributing property, according to specific wishes. A woman with three grown daughters faced a problem about passing down the family home. She wanted to give it to the youngest daughter, who has taken care of and is closest to her. However, she also wanted to be sure that, if something happened to this daughter, the house would go to her two other daughters and not the close daughter’s adult children, her grandchildren.
With proper planning, this can be done, as described in the article “Mom needs contingency plan to pass house title” from mySanAntonio.
One way is to rely on a last will and testament. The will would state that she leaves the house to the youngest daughter, under terms of a testamentary trust inside the will. The daughter is permitted to use, enjoy, and live in the house during her lifetime, as the beneficiary of the testamentary trust.
The two older daughters would be named as the secondary beneficiaries of the trust. When the younger daughter dies, the trust distributes the house to the older daughters, instead of the grandchildren.
The plan will need to be prepared by a qualified estate planning attorney and it will likely be probated. This is not a terrible process, if the will is professionally written, properly signed by the mother and two witnesses, includes an executor and a trustee and clear instructions about her wishes. An estate planning attorney can prepare it correctly.
If the goal includes avoiding probate, there are other options. One is by deeding a life estate and another is using a living trust. The deed for a life estate specifies that the woman is retaining a life estate, that is, the right to use, enjoy and occupy her home, for the rest of her life and then will pass down to daughter. The living trust could also specify that when she dies, the home goes to her youngest daughter. A living trust provides the detailed control allowed in a will, but the trust, which must be properly created and funded, avoids going to probate. The trust would let the mother live in the home, and when she dies, the title to the house stays in trust with her youngest daughter, who is able to live in the house. However, she never becomes the owner of the house. The trust would continue to own the house. The trust would specify that when the daughter dies, the house goes to the two older daughters, instead of grandchildren. To be extra safe, it should also specify what she would want to happen, if one or both of the older daughters dies.
This approach avoids probate. However, if there are concerns about not being able to financially afford long-term care, then elder law planning should be done. By working with an experienced and qualified elder law attorney, asset protection planning can be done to make sure the home isn’t lost to the devasting costs of long-term care.
None of these are simple, but they are all feasible. Speak with an experienced estate planning attorney or elder law attorney.
Reference: mySanAntonio (June 8, 2020) “Mom needs contingency plan to pass house title”