Estate planning - farms

I've got a couple of properties (acreage and a 2nd house) besides my current home. I'm planning on typing up Warranty Deeds to add my kids (keeping my wife and I on as well) as Joint Tenants with Rights of Survivorship.

From past experience, I've found this is a good way to handle assets w/o going through probate. When an aunt passed away, I was able to sell stuff, divide it up to the heirs w/o any hassles.

Talking to some people, trusts are another way to handle this and I was wondering how you guys have handled this now or in the past. With the exemption at over $5mil, I'm not too concerned about estate taxes, but just wondering what method makes it easiest for heirs to deal with the assets.

Just make sure the trust gets funded!!!! Bank accounts, deeds to the property, and whatever else. Just went through with moms trust. My sister was in charge, convinced mom it was not needed. No one was aware, until it was too late make changes. As a result she absconded with close to $300,000.00. I REALLY HOPE SHE ENJOYS THE MONEY

Talk to a REPUTABLE local attorney, and make sure the trustee is REPUTABLE.

JML, In my semi retired law practice I do quite a bit of work in the areas of Probate, Estate Planning, Wills, Real Estate etc. and let me begin with this:

Take that question to a local competent experienced professional Real Estate and Estate Planning ATTORNEY and dont hang your hat and risk that kind of an important major decision on ANYTHING any lay or even professional person posts here (including myself, not having thoroughlly researched and studied your situation)!!!!!!!!!

Ive done several small estate plans AND NO TWO HAVE BEEN ALIKE. Whats best and perfect for one person or someone here who claim its right and they love it (By golly they had a free lunch at Holiday Inn and got a nice leather binder to hold their Trust and all for only $3500) MAY NOT be best for your situation. Your plan should be tailored to you NOT other persons or Billy Bob or your know it all brother in law down the road lol. Perhaps a Living Trust is in order as one of many tools to avoid probate or perhaps other less expensive less cumbersome methods may be best suited to YOUR (NOT someone here) SITUATION. For example, I had clients come to my office last year thinking because their deceased Dad had a Living Trust they could all sell the farm no problems no hassle no legal work required WRONGGGGGGGGGGGGGGGGGG It was the biggest mess I ever saw it would have been much easier and cheaper had dad did nothing. It was BOTH a Probate and NON probate mess grrrrrrrr

THAT BEING SAID (Lawyers love disclaimers) its generally true a conveyance of real estate (IF DONE CORRECTLY) to Joint Tenants with full rights of survivorship makes for an easy non probate event upon the death of one tenant. Title now vests in the survivors.

SO YESSSSSSS talking to "some" people or posters here a Living Trust is the way to go and theirs may indeed BE PERFECT FOR THEM but whether or not its perfect for you should be made with the help of a professional trained experienced ATTORNEY in my professional opinion instead of any lay persons.

Its your money and you're the one that bears the risk so deciding who to take advice from is YOUR CALL

God Bless and best Wishes

John T BSEE,JD Country Lawyer

John T, you gave me my morning smile.

Thanks for the kind words. Im trying to get a law job started (gonna be a big half the summer job, Granny died in 1964 with 4 kids, NO PROBATE OR TITLE WORK WAS EVER DONE, all her kids are dead, now 13 different grandkids n cousins n whoever wanna sell grannys farm) thats gonna be some ride now lol but nuttin Ol John T cant handle.............

I'm headed to Dinkys Amish Auction Center, still cleaning out the barn and shop after "Thirty Years of Farming" like the James King Song. Dont want the kids to deal with all this mess when me n the first wife "croak". Our daughter already affectionately told us "Mom when you and Dad CROAK I want that antique claw ballfoot oak table" lol

John T

EXACTLY, good point, I usually have the spouses as initial Trustees with the most trusted adult child (or bank if none) as the Successor Trustee. With good accountings and oversight the other siblings "ought" to be okay. Dont appoint know it all brother in law Billy Bob or Bubba however lol

John T

I have gone through these issues 3 times with relatives, each time was different. I ended cleaning things up after they were gone.

I am used to working with lawyers in my business. It is MUCH easier to organize before there is an issue than letting the court deal with it after.

Another huge thank you to John T. You have given so much good information to this forem thru the years. Both electrical and legal.

You explained to me a few months ago how to understand the John Deere 24 / 12 volts system and made it very clear. once one understands both the pos. and neg. batt are grounded to the "huge chunck of metal" (in your words) and dont create a short things fell into place. Thanks again for all you do for us tractor guys!

David G" & John T

My aunt did talk to an attorney when she was getting on in years. JTROS on everything was the recommended way to go (bank, brokerage, etc). I.e. No trust. My situation is the same with regards to bank/borkerage accounts but with added Real Estate. Recommendation from an attorney (seconded by my 2 daughters who are attorneys) was least hassle is still the JTROS method for conveyance of real estate. I asked the attorney about a Trust and answer was "sure, if you want to go that route". :roll:

I was merely asking here (like taking a poll) on how others have done it, not asking for legal advice. I've read enough of John T's posts to know what the answer would be.

And "magpiene": Your OWN sister???? Wow, is all I can say.

In my town a good way to get thrown out of a lawyers office is to tell him you going to setup everything in JTWROS(joint tenants with right of survivorship).
My mother and father had this setup. When he died, my mother than added me to the JTWROS. Then, My mother died I added my wife to the assets. If I or my wife die, another person or persons wil be added. Has worked for over 60 years.
Banks, brokerages will have the necessary forms to fill out. For real estate you can download the form from the internet.
We have sold or exchanged real estate. A lawyer was hired. They do have a purpose. But, with a JTWROS costs can be kept to a minimum.

THANKS FOR THE KIND WORDS

YES I enjoy helping, when I was a "kid" my Grandfather and all my Uncles and old farmers n gents were glad to help me, now I figure ITS PAYBACK TIME.........I've also learned from other fine gents on here (Especially Tx Jim and my friend Buickndeere on 24 volt and Bob M and Janicholson on Farmalls) and try to give them credit as I can.....

ALSO lol Im an old fuddy duddy traditional Christian Conservative and many (NOT all) farmers n ranchers n country folks and antique tractor lovers share my views BUTTTTTT I'm an equal opportunity helper and try to respect, be kind to and help allllllll regardless of any of that stuff. Were all in this together ya know.

Best wishes n God Bless all

John T

Great, sounds like you have a good well informed handle on all this. I wasnt necessarily knocking a Trust its PERFECT in many situations, (may do one for my own family) I sooooooo often go the JTROS route myself. I just had to poke a little good hearted fun at the Holiday Inn free lunch and $3,500 leather binder Living Trust industry, and how much those who bought one love to brag about it and swear its the ONLY way to go (and yes it may well be for their situation)...

Best wishes

John T

You get NO argument from me an Attorney on that !!!! If done RIGHT of course.......Butttttt NO FREE LUNCH FOR YOU at the Holiday Inn and the nice leather binder LOL

Best wishes

John T

JML755, In my decades on this planet, the four worst financial deals I have experienced were with lawyers who were to represent me, who took advantage of me and my trust, in each case with their fees. My losses ranged in the thousands; from low single to high double digits. Even so, no way would I attempt to do what you propose without what seemed like a sound attorney representing me. John T."s advice should be followed.

I can tell how not to do it. I've leased our family ranch the past 33 years. 17 years ago my Mom kept a life estate and pasted the ranch to her children in undivided interests. Needless to say since her passing we siblings seldom speak as no one is in charge.
I'm giving up my lease 15 April 2014.

It would seem the trust gives you and your wife some control
while you are around.

The deed kinda busts it open for the kids to take over on you.

The deed is less hassle, unless your kids turn on you.

The trust will keep,you in control, but takes more work.

So.... Depends on your needs, with the people around you.....

If any one of the kids or spouces of your kids gets some idea
in their head, either one can get messy. The game we play.....

Paul

I do recommend deeding the property to the kids before death as a way to beat probate, and JTROS is a good way to go IF you're pretty sure the folks can afford to pay for a nursing home if they need to go. If not, and they have to rely on Medicaid to pay for it, a lien will accrue on any property they still own, including JTROS property.

Most of what I encounter is folks of modest means, with the family home being the only real asset- this situation is especially susceptible to the Medicaid problem (with nursing homes at 6 grand per month, it doesn't take long to go through most any nest egg). In those situations, I prefer deeding the property outright to the kids, and reserving a Life Estate for the parents. And this has an unusual bonus, at least in Washington- if parents have a life estate and are still living in the house, kids can get the Sr. Citizen property tax exemption, which can be substantial.

Not really a big fan of trusts, because as John T points out, it is a very expensive leather notebook and lunch. The trust purveyors don't follow through with helping to put everything into the trust, they just go on to the next Holiday Inn and put on another lunch. If the trust is not funded, its worthless, and you still have to do a probate. And most of my probates run less than $2,000, so why spend $3,500 to avoid one?

(quoted from post at 13:27:32 04/25/13) Just make sure the trust gets funded!!!! Bank accounts, deeds to the property, and whatever else. Just went through with moms trust. My sister was in charge, convinced mom it was not needed. No one was aware, until it was too late make changes. As a result she absconded with close to $300,000.00. I REALLY HOPE SHE ENJOYS THE MONEY

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What is it with sisters and money... my youngest sister stole $100,000 or so from my brother's HVAC business. We think she is fixing to do the same from our parent's estate once they pass on.

Thanks Mike, I Love to hear from co counsel on these questions, looks like were on the same page. I wish we had been able to meet the last time I was in your neighborhood when going to Crater Lake, (The MOST beautiful lake in the world) maybe next time.....

Same as you, I do the Life Estate thing with elderly parents for medicaid planning (the value of a Life Estate for an 85 yo aint all that much), but didnt get into it here. To do my own I might considerable a NON Revocable Trust as I understand it can be better for Medicaid purposes.

I tell my clients I can do a Trust at a lower price then the Holiday Inn bunch but NO LUNCH AND NO LEATHER FOLDER and they seem to prefer that???

John T

Do yourself a favor - See a lawyer who deals in elder care and estate planning.

I dunno- maybe you could give 'em a boloney sandwich and a PeeChee, to keep costs down but still deliver good value to the client. . . LOL

Yeah, I'm sorry I missed you when you were out. Been to Crater Lake twice- once in late fall, it was snowing. Once in late June, it was snowing. But sure is a pretty place.

My farmer understanding is the govt can go back 3 years (used to be 5, and laws can change to that again...) and claw back the funds.

So things should be in a non-revocable trust and you need to hope for another good 3 years to get in the clear.

Spouces, if they get mad, can do funny things to trusts and wills and such, if they are mad and or motivated enough. There is often a lot of loopholes for them to plow through. Really need to have everyone sign off on things at the time, so it is harder to loophole around.

But, I'm a simple dirt farmer, don't pretend to understand the legal and financial stuff enough myself, much less to tell others.

Paul

I learn things everyday on here and not just about tractors.

thanks

-paul

This is a question. I have read this threw and am wondering how to escape nursing home costs if so needed!What is the best way to do it?

(quoted from post at 14:37:11 04/26/13) This is a question. I have read this threw and am wondering how to escape nursing home costs if so needed!What is the best way to do it?

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Die before you need it! I think home care for as long as you can is cheaper, a friend of mine hired two ladies to rotate staying with her father in his home until he passed away. Of course she didn't pay SS, withhold taxes or had worker's comp coverage... probably would call them "contractors" so she didn't have to. I've always heard that Medicaid picks up some or all of the cost but I understand you need to basically have no assets and they probably take what income you might have too. Hopefully someone that really knows will chime in.

You have to liquidate assets (except your home) and spend your own money until you're down to $2,000- then go on Medicaid, and the guvment pays for it. They won't sieze or sell your home while you're alive, but will accrue a lien against it for the costs they pay on your behalf.

(quoted from post at 15:57:07 04/26/13) You have to liquidate assets (except your home) and spend your own money until you're down to $2,000- then go on Medicaid, and the guvment pays for it. They won't sieze or sell your home while you're alive, but will accrue a lien against it for the costs they pay on your behalf.

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What about if there is a couple and one is still functional and the other has to go in a home... do they have to impoverish themselves to qualify? MIL is super scared about having their home taken away if my FIL gets so bad he needs to be in a nursing home. Their income can't support him in a home and still keep her in her house. Seems a bit unfair that people that have paid taxes all their lives (they both worked and had decent jobs) can't qualify for help but if you have nothing and never had anything the rest of us get to support you.