Pensacola Trust Lawyer Explains Be Careful When Planning and Do Not Use the Wrong Planning Techniques to Avoid Probate

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Hey everybody Erich Niederlehner Trusted

Elder Law today I want to talk about uh

quick claiming property to your kids uh

don't do

it why because if you quick claim or do

a regular Life Estate Deed where you

reserve the ability to live in the

property for the remainder of your life

and then it goes to your kids or whoever

you name um and you need Medicaid within

uh or you need long-term nursing home

care and need to apply for Medicaid

within five years of signing that quick

claim deed well that's a gift and we're

going to have to to fix that due to um

Medicaid rules so um don't don't do that

don't add your kids to your property um

because you know if they file bankruptcy

if they get sued if they get divorced

then your property um um is now theirs

because you put them on the deed plus if

um you have property they want to

inherit the property they don't want to

um be added to the deed because then

there's going to be capital gains tax to

be paid whereas if they inherit the

property they can um uh get a step up in

basis so they get it for whatever the

current value of the property is when

you when you pass away they sell it then

then there's no capital gains if they

sell it 10 years down the road then

they're only paying capital gains from

any increase in value from the value uh

that the property was when you passed

away so a good way to avoid all this and

to avoid probate which generally is the

reason that you're adding somebody to

your deed through quick claiming or

whatever is in the State of Florida you

can do what's called a ladybird deed

and um by doing a ladybird

deed you not only reserve the ability to

live in your house for the rest of your

life but to mortgage the property to

sell the property to rent the property

to change who you're leaving the

property to and um therefore if you did

need Medicaid within five years of

signing the ladybird deed U Medicaid

doesn't consider that as a a gift so you

wouldn't be penalized for

um giving away uh property for less than

fair market value and uh wouldn't

interfere with any Medicaid benefits

that you may be entitled to and um

since your kids or whoever you're

leaving the property to do not actually

invest in the property until you pass

away um if one of the kids has to file

bankruptcy or gets sued by creditors or

gets divorce you can always change who

you're leaving that property to um and

then you know if you need to mortgage

the property maybe like a reverse

mortgage or

um refinance or whatever you have the

ability to do so without asking the kids

permission like if if you had just

signed a regular Life Estate Deed um or

just quick claimed it and added them to

to the property also since the kids

don't invest in the property until pass

away they don't inherit it until you

pass away and they would get a step up

in basis so if you bought the property

for $100,000 and now it's worth a

million dollars they would get it for

the million dollar value so if they sold

the property they wouldn't be paying

capital gains on on that on that

property so if you're thinking about

doing self-help uh estate planning don't

do it talk to professional um get advice

and uh make an informed decision because

sometimes trying to save pennies cost

you or your family a lot of money down

the road and a lot of headaches so

instead of uh cleaning up a mess don't

create the mess and uh talk to somebody

and uh find out the pros and cons of all

the actions you're you're considering uh

look trusted elder law up at uh trusted

elder law.com or give us a call at

85607 2222 we'll be happy to

help