Land Trust

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Can someone explain the benefits of putting your house in one? What are the cons?

Can anyone explain the property ownership status of "tenants in entirety" as opposed to "joint tenancy"
 

This from the interwebs:

A Tenancy by the Entirety allows spouses to own property together as a single legal entity. Under a tenancy by the entirety, creditors of an individual spouse may not attach and sell the interest of a debtor spouse: only creditors of the couple may attach and sell the interest in the property owned by tenancy by the entirety.

There are three types of concurrent ownership, or ownership of property by two or more persons: tenancy by the entirety, Joint Tenancy, and Tenancy in Common. A tenancy by the entirety can be created only by married persons. A married couple may choose to create a joint tenancy or a tenancy in common. In most states a married couple is presumed to take title to property as tenants by the entirety, unless the deed or conveyancing document states otherwise.

The most important difference between a tenancy by the entirety and a joint tenancy or tenancy in common is that a tenant by the entirety may not sell or give away his interest in the property without the consent of the other tenant. Upon the death of one of the spouses, the deceased spouse's interest in the property devolves to the surviving spouse, and not to other heirs of the deceased spouse. This is called the right of survivorship.

Tenants in common do not have a right of survivorship. In a tenancy in common, persons may sell or give away their ownership interest. Joint tenants do have a right of survivorship, but a joint tenant may sell or give away her interest in the property. If a joint tenant sells her interest in a joint tenancy, the tenancy becomes a tenancy in common, and no tenant has a right of survivorship. A tenancy by the entirety cannot be reduced to a joint tenancy or tenancy in common by a conveyance of property. Generally, the couple must Divorce, obtain an Annulment, or agree to amend the title to the property to extinguish a tenancy by the entirety

I hope this helps. I've never seen tenancy by the entirety here. I'm not sure New Mexico recognizes it. (ALL property law is state law and varies by state.) Usually here, married couples hold property as joint tenants. Tenancy in common is used more by business partners, etc., who want to protect their interests in the event of their death.

It appears to me (and I'm NOT a lawyer, only a retired paralegal, and this is in no way legal advice) is that the main difference between joint tenancy and tenants in the entirety is whether or not a creditor can attach and sell the interest of the debtor spouse (if only one of them is the debtor). To me, this would be important if one spouse was a spendthrift, as in someone with a gambling problem, etc. This wouldn't make any difference here, it seems to me, because NM is a community property state and ALL debt entered into by either party after marriage is community debt (i.e., debt of both spouses).

Does this help?
 
This Tenancy by the Entirety is a newish thing? I never heard of it before. I have always owned property with a spouse as Joint Tenants. It sounds like a good thing.
 

I looked it up, and Illinois is not a community property state -- rather, it is a common law state. So tenancy by entirety was probably thought up to protect a spouse's interest in a home against debts by a spouse -- like if he went nuts and went out and bought a brand new red Lamborgini for $100,000 or something.

It wouldn't work here, because NM is, as I said, a community property state.
 
Just recently, I put my husband on the deed to my house.. This is how our lawyer set it up. We also put it into a land trust, with my two sons as beneficiaries. It was the best way the lawyer could think of to protect my husband should I die first,, and yet have the property go to my kids when he dies. It's not perfect... he could still change the Trust, but the best that could be done.
 
be careful with your home and trusts .

if you ever need medicaid long term care a home held in personal names is a protected asset and is not counted as an asset for purposes of qualifying for medicaid nor can they take it as long as you claim one day you will return . .

once you put a house in any kind of revocable trust name it loses that protection .

you may actually be forced to sell the house just to qualify for medicaid because once in a revocable trust the house counts as dollars .
 
mathjak107 said:
be careful with your home and trusts .

if you ever need medicaid long term care a home held in personal names is a protected asset and is not counted as an asset for purposes of qualifying for medicaid nor can they take it as long as you claim one day you will return . .

once you put a house in any kind of revocable trust name it loses that protection .

you may actually be forced to sell the house just to qualify for medicaid because once in a revocable trust the house counts as dollars .
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They have to find it first.. However.. our attorney has assured us that isn't true.. We STILL own the home..and it remains a protected asset as our only residence. The title is only held in a blind trust by a title company. If anything it offers some protection AGAINST what you descried. It also avoids probate upon the passing of the surviving owner.
 
oh it is very true . it has nothing to do with probate or not .

it has to do with the fact the value of the house is not counted as an asset for Medicaid purposes when it comes to how much gets spent down before Medicaid pays anything when held in personal name only or irrevocable trust . ,


while Medicaid can not usually go after anything not probated a revocable trust is a catch 22 .

while they can't take the house because the trust is not probated ,the value of the house when applying for Medicaid becomes countable dollars once it is moved to a revocable trust . it can only remain a protected not countable asset in personal name only and not a revocable trust .

that can require you to have to sell and spend down the house in order to qualify for Medicaid in the first place .

if your attorney does not know this I strongly suggest you speak to another attorney . .
 
There is very little one can do to avoid having to deplete ones assets if applying for Medicaid. That said.. we are still the owners of the property, and would not be required to sell the house to qualify for Medicaid if one spouse needs nursing home care. Spending down is very different from liquidation. The remaining spouse is protected from becoming homeless to pay the others NH bills.
 
check with an attorney then , your attorney may not be well versed in this if he did not tell you the pitfalls . with the house held in a revocable trust the problem is you lost the protection of the law that you had prior to moving it in to the trust .

you now can not qualify to even get Medicaid until all assets are spent down to their requirement even if it now means the house has to go .the law went away with the change .
 
mathjak107 said:
check with an attorney then , your attorney may not be well versed in this if he did not tell you the pitfalls . with the house held in a revocable trust the problem is you lost the protection of the law that you had prior to moving it in to the trust .

you now can not qualify to even get Medicaid until all assets are spent down to their requirement even if it now means the house has to go .the law went away with the change .
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Totally disagree.. the State will not insist the house be sold and the remaining spouse become homeless.. The State will put a lien against the property so it will get it's money WHEN the house is sold. The state is not in the habit of turning little 90 year old ladies out on the street.
 
you don't understand . just based on what you are replying you are missing the point .

Medicaid rules prohibit some one getting a penny from Medicaid until they spent their assets down to the states requirement level .

there is a penalty period based on how much you are over asset wise .

normally the house in your personal name is exempt from being part of the asset calculation to determine if there will be a penalty period .

once you move the house to a revocable trust you blew it and the dollars become counted the same as any other asset . they are no longer exempt from the penalty calculation .

if the house is still over the limit you will have to sell it to get your assets below the required level BEFORE MEDICAISD EVEN PAYS A DIME .

you are arguing against something that is fact . you can google it . it is the major disadvantage of putting a house in a revocable trust .

you are talking about liens and recovery but that has nothing to do with this aspect .

in this case you would owe them nothing since you don't qualify for Medicaid BECAUSE NOW THE HOUSE WON'T LET YOU CLEAR THE PENALTY PERIOD . you need to get your assets below a certain level to see your first dollar from Medicaid paid and in this case the house is counted in that figure .

folks blow this all the time and is the reason I am bringing it up .
 
mathjak107 said:
you don't understand . just based on what you are replying you are missing the point .

Medicaid rules prohibit some one getting a penny from Medicaid until they spent their assets down to the states requirement level .

there is a penalty period based on how much you are over asset wise .

normally the house in your personal name is exempt from being part of the asset calculation to determine if there will be a penalty period .

once you move the house to a revocable trust you blew it and the dollars become counted the same as any other asset . they are no longer exempt from the penalty calculation .

if the house is still over the limit you will have to sell it to get your assets below the required level BEFORE MEDICAISD EVEN PAYS A DIME .

you are arguing against something that is fact . you can google it . it is the major disadvantage of putting a house in a revocable trust .

you are talking about liens and recovery but that has nothing to do with this aspect .

in this case you would owe them nothing since you don't qualify for Medicaid BECAUSE NOW THE HOUSE WON'T LET YOU CLEAR THE PENALTY PERIOD . you need to get your assets below a certain level to see your first dollar from Medicaid paid and in this case the house is counted in that figure .

folks blow this all the time and is the reason I am bringing it up .
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I totally agree with this. Went through this with my mother. Any payment medicaid wouldn't pay, came out of her own pocket.
 
3:
revocable trusts

It does not help you qualify for Medicaid. Medicaid is a federally funded health care program that was created primarily to provide health care services for the poor. It also pays for an unlimited number of days of nursing home care, which makes it appealing to some people who are not poor. To qualify for Medicaid, you can only have a limited amount of assets and receive a certain amount of income.

Some people think putting their assets into a revocable living trust will help them qualify for Medicaid because the assets are no longer titled in their individual names. But because a living trust is revocable, you still have control of your assets and have access to them. As a result, assets in your living trust are “available” and counted if you apply for Medicaid—so transferring your assets to a living trust will not help you qualify for Medicaid.

a primary home held in personal name is not counted as available by law but it loses that distinction when put in a trust
 
I think you both are forgetting about the fact that if ONE spouse is institutionalized and the other is NOT.. The healthy Spouse is known as the Community Spouse.. The Federal government passed the Spousal Impoverishment ACT to prevent just what you are saying.. Also most States have laws protecting the Community Spouse from impoverishment... So NO. while the house may be used as a countable asset. The State cannot take it before the surviving spouse dies..
 
mathjak107 said:
3:
revocable trusts

It does not help you qualify for Medicaid. Medicaid is a federally funded health care program that was created primarily to provide health care services for the poor. It also pays for an unlimited number of days of nursing home care, which makes it appealing to some people who are not poor. To qualify for Medicaid, you can only have a limited amount of assets and receive a certain amount of income.

Some people think putting their assets into a revocable living trust will help them qualify for Medicaid because the assets are no longer titled in their individual names. But because a living trust is revocable, you still have control of your assets and have access to them. As a result, assets in your living trust are “available” and counted if you apply for Medicaid—so transferring your assets to a living trust will not help you qualify for Medicaid.

a primary home held in personal name is not counted as available by law but it loses that distinction when put in a trust
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I don't have a living trust.. I have a land trust.. Both my husband and I are tenants in the entirety.. which essentially converts the house to "personal property"... and protects each of us from liability of the other partner. Now perhaps they can sue HIM.. but not me. perhaps his half of the asset must be paid down.. but not mine.

https://www.medicare.gov/what-medicare-covers/part-a/paying-for-nursing-home-care.html

The state can't put a lien on your home if there's a reasonable chance you'll return home after getting nursing home care or if you have a spouse or dependents living there. This means they can't take, sell, or hold your property to recover benefits that are correctly paid for nursing home care while you're living in a nursing home in this circumstance.In most cases, after a person who gets Medicaid nursing home benefits passes away, the state must try to get whatever benefits it paid for that person back from their estate.
However, they can't recover on a lien against the person's home if it's the residence of the person's spouse, brother or sister (who has an equity interest and was residing in the home at least one year prior to the nursing home admission), or a blind or disabled child or a child under the age of 21 in the family.
Your assets

Most people who are eligible for Medicaid have to reduce their assets first. There are rules about what's counted as an asset and what isn't when determining Medicaid eligibility. There are also rules that require states to allow married couples to protect a certain amount of assets and income when one of them is in an institution (like a nursing home) and one isn't.

A spouse who isn’t in an institution may keep half of the couple’s joint assets, up to a maximum of $119,220 in 2016
, as well as a monthly income allowance.
Click to expand...
 
the link you posted has nothing to do with the qualifying for Medicaid . no one is disputing they can not take the house , why do you keep mentioning it ? . the dispute is you cannot qualify with the house for Medicaid without it becoming part of the assets that have to be spent down once it goes in a trust.

a land trust is a revocable trust .

A Revocable trust will not do anything to "protect" home from consideration by Medicaid in determining eligibility for nursing home coverage.

only a home outside the trust is exempt from being counted as a spendable asset to qualify .once it goes in the trust it is counted . anything over 119,220.00 to be spent down before you can get Medicaid and with a trust that number now includes the house .

without a trust the number does not include the house , the house is exempt if not in a trust .
 
I didn't say that it didn't have to be paid... I only said that they cannot force a Community Spouse out of the home to pay for the nursing home.. Guess we were talking about two different things.

However, since the trust is revocable.. If it becomes apparent that a spouse will need nursing home care in the future.. the trust will be revoked.
 
mathjak107 said:
there may be a 5 year look back before taking it out of the trust is accepted . you have to check on that , .
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Far as I know... only for transfer of assets. Revoking a trust isn't transferring anything.. we still are the owners of the house. The assets are done by Snapshot on the day a person applies for Medicaid. But we are talking about something that may not even happen..
 
I found something on it. it looks like the house has to be out of the RLT when you apply for Medicaid . that can be a bit hard to do in advancwe when someone has a stroke and you first have to have things re-titled .

"So what’s the problem with RLTs from a Medicaid planning perspective? First, you have to understand the goal of Medicaid planning. That goal is to re-title/re-position a client’s assets in to “exempt” assets that do not count against the client when it comes to the spend-down rules.
As a general rule of thumb, single clients have to spend down all of their “countable” assets to $2,000 in order to qualify for Medicaid assistance for nursing home care.

What if the client does proper planning but leaves the home in a RLT before applying for Medicaid? The house which would normally be an exempt asset if not owned by a trust then becomes a countable asset and the client will NOT qualify for Medicaid.
Example: Assume a client has a house in a RLT and then spends down all her other assets to $2,000 (therefore, she thinks she will qualify for Medicaid when she applies). She applies for Medicaid in December hoping to get Medicaid benefits backdated to December 1. In January the Medicaid agency finds out that her house is owned by a RLT. Instead of being approved for Medicaid with payment going back to the time of application, she receives notice that she has too many resources and is denied approval because her home is a countable asset.
The client quickly removes the home from the RLT and reapplies for Medicaid before the end of February. Because of this screw up Medicaid will only be approved back to February 1. This cost the client a $6,000 bill for December and a $6,000 bill for January. This financial punishment could have been avoided if she or her team of advisors (attorney, financial planner, etc.), knew proper Medicaid Planning.
 
Some of what you were explaining made sense to me, some not so much. But, these are things that have been on my mind.

Mu husband passed away 1&1/2 years ago, and I have decided to down size, and move away from Houston. I've decided to move to a small community of 7,500.

I live on disabilty and a pension, and I turn 65 in December. Because I know I'm looking at heart surgery in a few years, I was wondering if I should put my new home in one of my grandchildren's name. I was hoping that would keep my new home out of the equation. Now I'm wonder about my pension.
 
i wouldn't . it can be a problem in the event of the kids being sued , divorce , etc . also if you need care the home would be a protected asset . you can have it it in case you need a reverse mortgage .
 

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