The Various Ways You Can Take Title In A Real Estate Transaction

Wondering how you might take title when you buy your new home? If you’re single or divorced, you’d obviously have sole ownership. But if you’re married or in a relationship, or have a living trust, there are several options. The exact language varies by state although the concepts are similar. In Florida, here are the most common ways your deed might read:

Taking Title In A Real Estate Transaction

Tenants in common. This is the legal entity the courts assume if the deed is otherwise silent. This means if there are two people taking ownership and one dies, that person’s half goes to his probate heirs, not directly to the other owner. If there are three owners, each actually owns a third, four owners a quarter, and the like.

Joint tenants with rights of survivorship. In the case of a death, this deed give the surviving owner the entire property. So if there’s a non-married couple with kids from prior relationships and one passes away, his or her share automatically goes to the remaining partner. As the new sole owner, that person can later choose to leave the home to anyone they wish– excluding their late partner’s children if they desire. (This is the reason couples on second marriages often choose tenants in common for their deeds together.)

Tenancy by the entireties. This can only be used for people who are legally married. Similar to joint tenants with rights of survivorship, each party owns 100%, so if one passes away the property automatically goes to the other. Unlike with JTWROS, however, if a judgment is entered in court against only one of the owners, it cannot become a lien on the property.

Trust. A trust can also take title to a property. This is typically recorded on the deed as “Jane Smith, Trustee of the Jane Smith Trust dated August 1, 2016.” This can be useful for an older person whose home is their main asset, because they can avoid probate; the successor trustee steps in as the owner upon the person’s death. This has to be done carefully, though, because I have seen people have problems selling their home in a trust because no trust was in legal effect when the property was purchased–or worse, the trust (a document drafted by a lawyer and not filed with the court) cannot be found.

If you’re looking to buy or sell a home, Contact us by email or call the Law Office of Gary Landau at 954-979-6566 for a FREE consultation. Gary Landau personally returns all calls to him.

Other Documents You Need To Create Along With Your Will

Other Estate Planning DocumentsIf you have a will or have been thinking of creating one, don’t forget to also have your attorney draft these other, equally important, documents in the state of Florida:

  • Health Care Surrogate. If you’re in a hospital too sick or unconscious to make treatment decisions for yourself (Should you have surgery? One type of medication or another?), whom do you want to be making them for you? This isn’t always as straightforward as it seems—while most people select their spouse or grown child, if your partner suffers from severe depression, say, or your kid lives across the country, you may do better selecting a friend or other relative. This should be a person who knows you well, so they can deduce what types of interventions you would desire if you were able to make these decisions.
  • Living Will. Doctors like to do all they can to save patients near death, which sometimes includes performing CPR or putting them on a ventilator. If you become terminally ill, however, you may prefer to be treated only for pain, and not to be aggressively or artificially kept alive. A living will—also called an advance directive—notifies your doctor of what you desire. (Note that this is different from a health care surrogate, because this covers only end-of-life decisions.) Doctors can use your living will to determine, for example, if they should put a “do not resuscitate” order in your chart.
  • Financial Power of Attorney. This person can act in your place financially—withdrawing your money, signing contracts binding you, and, depending on how the POA is drafted, even selling your home. Until a few years ago, you could create a “springing” POA, which took effect only if you became very ill. Changes in the law now mean that as soon as you sign the document, the person has power over your money and possessions. I advise clients to create this only if they are very elderly or sick, and have someone they trust completely. I’ve seen cases where a POA has been valuable in ensuring that an ill person’s bills are being paid or the home they can no longer live in is sold, but I’ve also seen unscrupulous POAs used to clean out bank accounts and pocket the money.  A frank discussion with your own family and then with your attorney will help determine if this is right for you.

Attorneys typically draft these documents in a package along with your will, to keep your costs down. Contact The Law Office of Gary Landau  at 954-979-6566 to discuss which documents are right for you.

The Pros and Cons of a Revocable Living Trust

Sometimes clients come to an attorney wanting to create a Revocable Living Trust. What this means is that a legal entity, or trust, is created to house your assets for your use during your lifetime (hence the living), which you can cancel or change at any time (hence the revocable).

Pros and Cons

There are good reasons you may want to do this, and others why it’s not the best way to go.

The Pros:

  • Trust assets don’t go through probate. After the trustee passes away, the successor trustee (named in the original document) steps right in and becomes the new trustee. This means that all assets in the trust pass to this person (or people) without needing to go through probate.
  • There’s little time delay. Because the successor trustee has access to trust assets right away, heirs don’t have to wait until these items go through probate before they dispose of them, such as selling a home.
  • It affords more privacy. Unlike a will, a trust is not filed with the court, so the details of your trust cannot be accessed by the public.
  • You can change your mind. If you decide at any time that you want to move your assets out of the trust and back into your name, you can do so.

The Cons:

  • There are costs involved. A trust is a complex legal document that is best created by an attorney.
  • You have to “fund” a trust. All of your assets must be moved individually into the trust. This is a time-consuming process, as you need to contact your banks, investment and insurance companies, and other asset-holders to change the ownership of each account. You also need new deeds to move any real estate into the trust.
  • You still need a will—and maybe a probate. Assets falling outside the trust have to be probated by the court. I see this often in my practice, where home deeds or bank accounts were never moved into the trust, perhaps because they were acquired years after the trust was formed.
  • You have to pay taxes. Despite what many people erroneously believe, income earned by the trust during the trustee’s lifetime is attributed to the person, requiring the payment of income tax. And if the value of the trust at the time of the trustee’s death reaches the IRS threshold for estate taxes, the tax must be paid.
  • If a trust is lost, there is no way to retrieve it. Since this document is not filed with the court, the only version is the one you hang onto. A client recently came to me claiming she is the successor trustee, but since the trust was drafted decades ago and couldn’t be found, we had difficulty proving she was entitled to the inheritance.

For more information about whether a trust is right for you, contact the Law Offices of Gary M. Landau, P.A. at 954-979-6566 for a free consultation.

 

 

A Spouse’s Rights Even If a Will Leaves You Nothing

Spouse RightsYou may think that if you’ve been written out of your spouse’s will, you won’t inherit a thing, but that may not be true. Ditto if your partner drafted their will before you were married. That’s because Florida law protects spouses from total disinheritance, regardless of what a will says.

A husband or wife, for instance, has rights regarding your primary, or “homesteaded,” home. If your spouse has no children, the home would automatically pass to you. Even if he or she has kids from a prior marriage and left the house to them, you still have the legal option to live in the house for the rest of your life (known as a life estate), or to immediately become a 50 percent owner of the home.

Beyond your house, a spouse is also entitled to some of the deceased person’s money. In general, the law gives you 30 percent of your late spouse’s assets, including assets that fall outside the probate, such as property in a trust in their name. This also holds if the person wrote their will before they married you and left all their stuff to a parent or someone else.

The law also provides for a disinherited spouse to receive some money, called a family allowance, from the estate’s assets even before the probate is completed and all the money is distributed.

Of course, all of these rights may have been waived by the spouse if he or she signed a valid premarital or postmarital agreement.

Don’t try to understand these complex laws yourself. If you live in South Florida and need the advice of a probate attorney, contact us at The Law Office of Gary M. Landau, P.A.

The Biggest Items To Consider When Writing A Will

What to Consider When Writing a Living Will

Nobody lives forever, so no matter how young or healthy you are, almost everyone should have a valid will. A will determines who gets your stuff. A will determines who watches your kids. A will can keep family members from squabbling after you’re gone.

Without a will, the State determines how your assets are divided, according to very specific guidelines. So even though you may want some money or possessions to go to, say, your stepchild or best friend, absent a will they may not get a thing. It’s that element of control that makes a will so important, even if you don’t have a ton of money.

Here are a few things to consider before drafting this crucial document:

  • Don’t create one on your own. While many websites offer do-it-yourself or cheaply crafted varieties, a will is too important to go discount. (Anyway, having a professional lawyer draft one is not too expensive.) Many wills from these websites are poorly drafted, with ambiguous wording. Sometimes they don’t execute them properly, with the state-mandated number of witnesses or such. Some programs even offer will services that aren’t state-specific, so you could end up with a will that the court won’t accept. And since you won’t be around to redraft fixes to these problems, the court would treat your estate as if you died without a will. To avoid these potential problems, work with an attorney with knowledge of all the laws in your home state.
  • Select your personal representative with care. While many people think their spouse or oldest child should automatically be their personal representative (in charge of managing and disbursing your assets after you die), think clearly if they have the best skills and temperament for the job. A good representative should be detail oriented, trustworthy, fair, and patient (probates can take from a few months to a year). State law places limits on who can be your personal representative; again, a lawyer with knowledge of your state can help you decide.
  • Do a mental inventory of all your assets. You don’t have to enumerate in a will how much money goes to each heir, only the percentage of your final estate. But mentally calculating how much you have, including property, valuable jewelry, artwork, and the like, can help you determine if you have enough to leave a bequest to more than your immediate family. Of course, a will can also specify how you want to handle your tangible property, including any embryos you may have frozen during prior treatments for infertility!
  • Plan for backup beneficiaries. Clients often tell me they don’t want to think about the possibility that their child may predecease them. And while I agree that is awful to contemplate, the truth is your will may not be probated for decades, and anything can happen between now and then. I won’t even work with clients who won’t include a backup beneficiary in their will (e.g., leaving your daughter’s portion to her children if she is not still alive), because this can create a legal mess for the remaining clan.

If you reside in the state of Florida and need additional information about or help with drafting your will, contact us today at The Law Office of Gary M. Landau.