In this Elder Law Minute, Paige Fox explains options for transferring real property, focusing on living trusts and Transfer On Death Instruments.
Video Transcription:
Hi, my name is Paige Fox. I’m a Senior Associate Attorney here at Dent Coulson Elder Law. I understand these topics can be very complex, so I’m hoping these Elder Law Minutes can bring some insight and better understanding to both potential and current clients. Thank you.
If you’re looking for ways to handle real property that you own—or that someone else owns—there are a couple of different options for transferring that property.
The first option, which I’m sure many people are familiar with, is a revocable living trust (or another type of trust). This option is pretty common nowadays, but it’s also a bit more complex and requires more planning upfront to transfer your assets through a trust.
A second, easier option—but not always recommended, and I’ll explain why—is what’s called a TODI: a Transfer On Death Instrument. This is a type of deed used to transfer real property after someone passes away.
Many people are concerned about avoiding probate. If you have real property, and you don’t use something like a Transfer On Death Instrument or place the property into a trust, you will likely end up going through probate. Probate can be time-consuming and costly, especially depending on your location.
So, again, a TODI is an option. It’s a deed that says, essentially: “After I pass away, I want my real property to go to the person named here.”
I often use TODIs for clients who are only doing a will, don’t have significant assets, or don’t want to set up a living trust. It’s a simpler alternative.
However, some drawbacks to using a Transfer On Death Instrument include its limitations when it comes to Medicaid planning and asset preservation. While it covers how the property is passed after death, it doesn’t include restrictions or powers that would help protect the asset during your lifetime—especially if you need long-term care.
So, while TODIs are an option, I almost always recommend a living trust. But if a trust isn’t feasible due to cost or other concerns, then a TODI can be a helpful alternative.e that your property goes to who you want it to go to. If this is something that concerns you, give us a call today.
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Thank you for watching our Elder Law Minute. If you need help with powers of attorney or any other estate planning needs, please call Dent Coulson Elder Law.
Also looking for information about Medicaid and Asset Preservation? Visit these articles:
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