Second Marriage Issues – Part 5
In last week’s blog post, I was in the midst of telling you about a dispute between Husband and his deceased Wife’s children regarding the sale of their home. Although 50% of the home was titled Husband and Wife joint with rights of survivorship (the other 50% owned by Wife’s children), the children insisted that their mom had always intended for 100% of the home to go to them. That’s what would happen if Husband dies before all of the children, the most likely scenario given their ages. (That’s because each 50% share is also owned jointly with right of survivorship.) Husband insisted, however, that Wife had made clear when she added him to the deed after they married, that if he needed to sell and use his share of the proceeds he could. That was the reason why she added him to the deed. The children asked Husband to agree to turn over his 50% proceeds to them after the sale. I explained to them that Medicaid would view this as a transfer subject to a penalty. Their claim to 100% is not supported by anything in writing, is counter to what Husband said he and Wife discussed and the deed is clear. Medicaid will rely on
Second Marriage Issues – Part 4
In this week’s blog post I continue with a second marriage story. Wife had added Husband’s name to the deed to her home along with her children. Her intention was to allow him to remain in the home if she died first and then, when he died, the property would pass to her children. Ownership was set up as joint with right of survivorship, meaning it would automatically transfer by law. Wife died first but then Husband’s health deteriorated to the point where he could no longer live in the home. While he had some assets to pay for his care, it was clearly possible that he could outlive his money and might need to apply for Medicaid. His interest in the home would count as an asset. I told him that he had a couple of options. Once he no longer lived in the home it would become a countable asset. Medicaid would insist that he sell it and spend down his portion of the proceeds. There was, however, another option. If the other co-owners refuse to sell, then the home becomes an inaccessible asset. Husband cannot be expected to sell and spend down the proceeds because the other owners refuse to the sell. In other words, the inability to sell would
Second Marriage Issues – Part 3
My past two blog posts have focused on second marriages. Because spouses in such marriages more often than not have different heirs they wish to leave their assets to, closer attention needs to be paid when putting together an estate plan. Last week I told you about Husband and Wife in a second marriage. Wife came to the marriage with a home. She added Husband’s name to the deed but also added her children from her first marriage as co-owners as well. Wife had passed away when the matter came to my office. There was some dispute between Husband and Wife’s children as to the reason for adding Husband to the deed. Husband said it was to insure that he would always have a place to live if Wife died first. Wife’s children claimed that they were added because their mom wanted to pass the property to them after she and Husband died. Seemed like a reasonable solution, but it was based on an important premise. Everyone presumed that Husband would remain in the home as long as he lived. In today’s world of longer life spans, however, that is often not the case. Sure enough, Husband’s health deteriorated and he needed to move to a long term care facility. While Husband had
Second Marriage Issues – Part 2
In last week’s blog post, I began a discussion about second marriage issues. This week I will tell you about a specific second marriage problem in our office. Husband and wife each had children from a first marriage and no children as a result of their marriage the second for both. They did not enter into a prenuptial agreement. Wife entered the marriage owning a home. After the wedding, she added Husband’s name to the deed as well as her two children. The home was titled husband and wife tenants by the entirety and then the two children as joint tenants with right of survivorship. As between the married couple as one unit and Wife’s two children as another unit, ownership was also joint with right of survivorship. The way the deed was titled is a critical piece of information when determining what happens to the property when an owner dies. While many people would assume the last will and testament answers the question, that is only true if the property is what is called “probate property”, meaning controlled by the will. There are, however, two types of property that pass other than by way of a will. One is contract property and the other is property that passes by operation
Second Marriage Issues – Part 1
I have written often in my blog about second marriage issues. The reason is the potential that such marriages present different heirs for each spouse. In some cases one spouse has children from a previous marriage and the other does not. In other cases, the second marriage results in children as well as children from the first marriage. In many of the second marriage cases in our office, the spouses decide they wish to treat the children from both sides equally. For example, if they each have 2 children from a previous marriage, they treat each side’s children equally as to their entire combined estate and split everything 4 ways after both of them pass away. The outcome is no different than cases where there is one marriage with children and no offspring from any previous relationship. While I would say a majority of our clients in second marriages choose this route, there is a significant minority that does not. For example, there may have been an uneven balance of assets that each spouse came into the marriage with. The spouse with more assets may want to leave those assets to his/her children but also leave enough to the surviving spouse to be able to support that spouse in
Don’t Forget About Medicaid’s Medical Test – Part 4
In my post last week, I explained the risk of residing in an assisted living facility (ALF), running out of money but being too healthy to meet Medicaid’s medical test. If the applicant is still only paying the basic room and board cost and not for any care when the money runs out, a Medicaid application will fail for failure to show the need for long term care. On the other hand, some cases are not that clear cut. One such case resulted in our filing a Medicaid application. The client sold her home and used the proceeds to pay for care in an ALF for 4+ years. Her family reached out to us within months of the funds running out. Her care was above the base level but she was not exactly cooperative in the decisions to provide for her needs. She insisted that she was fine and didn’t need the care she was receiving. Furthermore, because she still had her mental capabilities, she was able to clearly communicate with the Medicaid nurse conducting the evaluation. It was a close call but we filed the Medicaid application. We were able to satisfy all the financial requirements, however, the application was denied because Medicaid determined that she did not meet