FAQ

I have a Transfer on Death (TOD) or Payable on Death (POD) beneficiary on all of my assets, so I’m covered, right?

Having a TOD or POD beneficiary on an asset, such as a bank account, vehicle, or real property, ensures that the asset avoids probate. However, it does not protect against the 5 year look back for Medicaid or Medicaid Estate Recovery. Additionally, it does not offer any protections for the beneficiary, such as if your beneficiary has a creditor when you pass away or if they are receiving means tested government benefits. Furthermore, if the named beneficiary passes away before you do and you don’t update the beneficiary, a probate estate will need to be opened in order for anyone to receive the asset.

How can I protect my beneficiaries after I pass away?
By having a Trust (Revocable or Irrevocable), inheritance shares for your beneficiaries can be protected for several different reasons. First, if a beneficiary is a minor, their share can be held until they are 25 years old, or even longer if that is what you would want. The Trustee would be able to give distributions for things the Trustee finds to be reasonable, such as education, living expenses, buying a car, etc., but the beneficiary wouldn’t be in charge of their share until they turned at least 25. We can also protect the share of a beneficiary who is going through something bad, such as a lawsuit, divorce, bankruptcy, or if they have creditors. The share can be held in trust until that bad event passes so that they don’t lose their inheritance to whatever is going on. Lastly, if a beneficiary is receiving means tested government benefits, such as SSI or Medicaid, their share can be held in trust and given to them as they need it, so they don’t lose their inheritance or their government benefits.
My spouse can receive my vehicle without a Transfer on Death (TOD) on it, right?

Yes and no. There is an affidavit through the BMV that can transfer up to $65,000 worth of vehicles and one boat and motor to a surviving spouse. However, this affidavit cannot be used for ATVs, golf carts, trailers, mobile homes, multiple boats/motors, or vehicles totaling more than $65,000. Having titled assets Transfer on Death to a beneficiary can ensure the assets avoid probate, provided the named beneficiary is still living.

I’m married so our house will automatically go to my surviving spouse, right?
It depends. If the property is jointly owned and there is survivorship language, the property will pass to the surviving spouse through an affidavit. However, if the property is only owned by one spouse or jointly owned without survivorship language, there is a good likelihood the property will need to go through probate in order to pass to the surviving spouse. It is always good to double check your deed for survivorship language to avoid this hassle for your surviving spouse.
I have a will, I’m covered, right?

It depends on what you want to be “covered” from. Do you want to avoid Probate? If so, no, a will is a one-way ticket to the Probate Court. The Wills job is to tell the Probate Court where you want your assets to go when you pass away and who you want as your Executor, or the person who is responsible for distributing your assets pursuant to your wishes and the Court’s order. The Will is also the place where you list out the Guardian for any minor children. A Will is a necessary document, and it is better than nothing, however, you may need to have other documents to accomplish your goals.

I have a Revocable Living Trust, I’m protected from the nursing home, right?
No. A Revocable Living Trust gives you ZERO nursing home protection. You are the Grantor/Settlor, Trustee and Beneficiary of this trust. Because you maintain all of the control and access, any assets owned by your trust are available to a nursing home spenddown.
I created my trust, I’m good to go and don’t need to do anything else, right?
No. Creating a trust is just the first step. You need to fund your trust as well. To fund the trust, you will either change ownership of assets or list the trust as the payable on death/transfer on death beneficiary on your assets. Failure to do this, will result in assets needing to go through Probate or being available for a nursing home spenddown.
I need to spend all of my assets on the nursing home before Medicaid will pay for my care, right?

No. There are things that can be done to protect your assets from a nursing home spenddown, even if you are already in a facility. It is only too late to protect some of your assets if you are out of money. We can’t get the nursing home to refund your money.

I created an Irrevocable Nursing Home Protection Trust, I need a separate Tax ID number, right?
No. The way our trusts are designed is that they run under the Grantor, or Creator’s, Social Security Number. A separate Tax ID number may be required by certain banks, even though it is not legally necessary. You do not want to get this separate Tax ID number unless absolutely necessary because it will create additional tax filings.
I created an Irrevocable Nursing Home Protection Trust, I can’t make changes to it, right?
No. The way our trusts are designed, the Trust Protector retains the right to change Trustees, if necessary, and the Grantor retains the right to change the beneficiaries at any time through a Limited Power of Appointment. This Limited Power of Appointment is helpful not just to allow the Grantor to retain some control, but it also is helpful from a capital gains standpoint as well. By having the Limited Power of Appointment, it makes it so that the Grantor doesn’t lose their 121 Exclusion if they sell the property during their lifetime and the beneficiaries receive a stepped-up basis on the property at the time of the death of the Grantor.