Tillem & McNichol

Len Tillem and Rosie McNichol

Dear Len & Rosie,

Before my dad died, he and my mom set up a living trust.

When my husband and I set up our own trust, our attorney advised us to retitle our house in the trust’s name. My mom’s attorney told her that this wasn’t necessary.

He said since she’s leaving the house to her trust in her will, she doesn’t have to go through the hassle and expense of changing the title on her house. My parents kept their home in joint tenancy.

Would it be better for her to change the title of her house to her trust?

She wants to do the right thing. Would she have to do it in person, or can she do it by mail?

She’s in her 80s and she likes to save her energy for going only places she really likes to go. The courthouse isn’t one of them.

Suzanne

Dear Suzanne,

Think of a revocable trust as a great big basket that avoids probate. Everything in the basket will pass to your parent’s beneficiaries without the court’s involvement, unless there’s a legal dispute within your family.

Everything out of the basket is subject to probate, probate fees, and probate delays, except for assets with pay-on-death beneficiaries, and assets held as Joint Tenants or Community Property With Right Of Survivorship.

Your parents’ home avoided probate upon your father’s death because it was titled in Joint Tenancy.

But now the property is titled solely in your mother’s name. She could retitle the home in joint tenancy with the children, but that’s a bad idea because she will no longer be in control of her own home, and her home would be subject to claims from her children’s creditors.

She needs to put her home into the trust.

If your mother dies and the home is not in the trust, it is possible to obtain a court order declaring the home to be trust property in order to avoid probate.

The appellate court decision in a case named “Estate of Heggstad” will allow your parents’ successor trustee to go to court, on bended knee, and say, “Your Honor, my parents spent thousands of dollars creating a trust to avoid probate, but they just didn’t get around to signing a new deed. Please, oh please judge, say that the home is really part of the trust because my parents meant to do it and it’s not their fault.”

The petition will likely succeed.

We do about eight or 10 cases like this each year. It’s good money, for us that is. Your mother can help her children avoid spending this money by funding her trust.

It is easy to fund the trust. Any estate planning attorney, even your own attorney, can prepare an affidavit of death of joint tenant, to remove your father’s name from the title of the home, and a deed from your mother conveying the home to herself as trustee of the trust.

Your mother can sign the documents at the lawyer’s office, or before any Notary Public, and the lawyer can record them with the county recorder.

While you are at it, you should review your mother’s account statements to make sure that her other assets are in the trust except for her retirement accounts, for which you should also make sure your mother has designated beneficiaries.

The whole point of having an estate plan is to make things easier for the children.

Creating a trust is only half the job. Your mother should finish the job by funding the trust.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at 707-996-4505, or at LenTillem.com. Len has a new video channel on YouTube.

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