Getting ready for the unthinkable

Aug 27, 2023 | Business

Rosemarie LaBadie

I have been a notary public for many years. Probably the biggest change in my notary business since COVID is the volume of documents people are preparing for after their demise. The pandemic has been the big eye-opener for us all. We all realize that something awful could happen at any moment. So being prepared is wise.

The most common thing people have been doing is to move their property into a trust. Some people use online services but it’s best to have an attorney help draw up the trust.  The biggest advantage by putting the property in a trust is your heirs avoid probate.  Without a trust, the courts decide who gets what. Generally, each heir will receive an equal portion.

For example, I had an uncle pass without putting his property in a trust and had no heirs.  So, each of his 11 siblings received an eleventh. Many had passed so his siblings’ children received a portion. Some of children of the siblings passed so the grandchildren each received a slice. Some of those kids had never even met my uncle. My sister, who was the executor had to write out 35 checks. This could have been avoided if he had chosen who he wanted to have what via a trust.

Two important details of a trust: First, you must name a trustee, the person who will follow the direction of the trust. For example, if the trust directs a property to be sold and the proceeds to be delivered to a certain person or organization, the trustee would put the property up for sale.

Secondly, trusts are not recorded so they are not public knowledge. The trustee will need to have a copy of the trust so they know how to proceed. This can be challenging if the deceased was not good with paperwork.

A simpler way to transfer your home to an heir without probate is a transfer-on-death deed, which allows you to avoid probate. When you die, the property passes directly to the beneficiaries named in the deed. There are some shortcomings with this type of transfer. If you are considering this route, it is worth it to consult an attorney before you transfer your property.

Some folks think its best just to deed the property to their children while they live in the home. I STRONGLY suggest not to do this. For a couple reasons: If your child is involved in a lawsuit or a messy divorce, your home could be named in the suit. Secondly, and this is very sad, your child could evict you. I have seen it happen and it’s heartbreaking to see a child force their mother out of their home.

If you have a real estate question, I’d love to hear from you. Give me a call. Rosemarie Labadie, Broker CA DRE #01240715, (909) 338-9995.



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