Factors to Consider In Determining Whether to Preserve Elder’s Interest in Primary Residence

In a recent article Experience, the ABA publication for the Senior Lawyers Division.  The “real trick is balancing [the clients’] financial security against the hopes of their heirs.”

By urging lawyers to resist a simplistic inquiry or “one size fits all” approach to elder law planning, stressing that lawyers should consider the impact of a proposed real estate conveyance on:

• the elder’s right to remain in the home;
• a Medicaid application for either at-home or institutional services;
• the income taxes of both transferor and transferee;
• the elder’s financial and physical ability to remain in the home;
• the elder’s estate plan; and
• present and future liens and mortgages.

Frequently an elder’s “plan” to divide property equally among children or other heirs conflicts with the way in which property is already titled, noting that sometimes the choice of  co-owners or death beneficiaries was intentional.  “As often as not, however, the elder simply did not understand that beneficiary designations such as ‘POD’ (pay on death) or ‘ITF (in trust for) control the disposition of an asset despite contrary instructions in the will.”  Additional complicated and conclusive presumptions may exist, arising from the form of title for real property, that also may conflict with a will, thus triggering expensive challenges that could have been avoided with more comprehensive understanding of the client’s estate.   

The article appears to be written for non-specialist lawyers, who are often asked to do “simple” estate planning that, in the wrong hands, can result in anything-but-simple outcomes for the family. 

Here’s the link for more on “Preserving the Primary Residence: The Minefield of Real Estate Transactions in Elder Law Planning.”

The theme of this issue of Experience is “Real Estate Issues Affecting the Elderly,” and the issue includes discussion of the pitfalls of reverse mortgages, income tax liability connected to foreclosures, and “unique” property rights issues for seniors in Western states, including water rights.