Online resource center to help you explore these key issues, and others, regarding your estate.

Practice Areas

Mr. Miller has many years of experience in designing and implementing a comprehensive variety of Trusts, Wills, and other estate planning documents, as well as settling estates in the most expedient and appropriate method. Further, he counsels and assists clients on becoming eligible for VA benefits and Medi-Cal.

Learn more
VA Pension/Aid & Attendance/Medi-Cal

Mr. Miller has been active in the area of VA Pension and Medi-Cal for well over a decade. He uses various specialized types of Trusts as well as non-trust strategies to gain eligibility for his clients and save the family money.

Learn more
Probate & Estate Administration

Mr. Miller has been settling estates (both simple and complex) for well over 40 years. The starting point is always to create a strategy to settle the estate in the most efficient manner possible with a minimum of taxes. Often times the strategy created allows the family to bypass Probate Court proceedings.

Learn more

You might be avoiding probate but that’s no reason to avoid estate planning (Part 2)

By merv,

  Filed under: Blog, Estate Planning, Medi-Cal Benefits, Veteran's Benefits

In my last article, I covered some of the common pitfalls of attempting to avoid probate by, primarily, placing property in joint tenancy.  I’ve saved the biggest zingers for this article.

One of the major problems with this method of avoiding probate is the lack of creditor protection.  Although generally clients who wish to put their home or bank account in joint tenancy have a sense that their son or daughter is “good with money,” “responsible,” and “has a good head on their shoulders,” creditor protection should still be a primary concern.  For one thing, sometimes clients are incorrect about the status of their children’s finances.  Perhaps the child is deeply in debt but too embarrassed to say anything about it.  Perhaps the child has tax debt, which can cause the IRS or Franchise Tax Board (FTB) to levy your account.  Any number of potential creditor claims could put your finances at risk.

But things happen.  No one needs a reminder that we are in a tough economic downturn.  People are losing their houses and going bankrupt all over the country all the time.  Although I hope you and your family are riding through this economic storm relatively unscathed, you should plan for the possibility that that might not be the case.  There are many financially responsible people who have found themselves with a house under water and without a job.  If your child goes bankrupt, his “assets” must all be listed on the court papers, which includes his joint tenancy assets.  But assets in your trust of which he is in charge (i.e. the trustee) are not included in his bankruptcy.  Furthermore, your child could get involved in a car accident or lawsuit of some variety in which damages are payable to the other party.  If that happens, guess what?  YOUR bank account, brokerage account, and other assets are subject to that judgment.  Properly planning in advance for these possibilities will ensure that your child is doing what you intended: helping you manage your finances in your old age and inheriting the funds.

Finally, placing property in joint tenancy is helpful to avoid probate, which by definition happens after your passing.  However, there are always things that may happen during your life that will null the benefits of joint tenancy.  For example, you could become ill and require expensive skilled nursing.  Although you may be able to qualify for Medi-Cal or VA Aid & Attendance non service connected disability pension  benefits, you generally must spend down your assets before you can qualify.  Instead, with proper planning, which may include a QVap  or QMap Trust, you could qualify for these healthcare benefits without depriving your family of any inheritance.  Additionally, you could become incapacitated and require someone to make financial decisions on your behalf.  Many of these types of decisions are difficult enough when those closest to you are aware of your preferences.  If you never notify them of your preferences you could risk any number of adverse consequences.

There is a happy medium between the very low cost of simply changing assets into joint tenancy and the high cost of probate.  To find out how to strike the balance you need for your family and circumstances, you should consult a competent attorney.

Estate Planning: The Price of Organization, Rewards, Gifts, and Wondrous Tax Things…
FREE REPORT:  This complimentary report, focused on Estate Planning, is comprised of many of Mr. Miller’s articles from his long running column for the largest regional newspaper in San Diego County. This report will guide you through the questions surrounding getting your estate planning in order.

Comments are closed.

About Living Trusts

About Living Trusts is hosted by the Law Offices of Merwyn J. Miller, as your online resource center to help you explore these key issues, and others, regarding your estate.

Merwyn J. Miller, J.D.

  • Board Certified Specialist in Estate Planning, Trust & Probate Law
  • Co-Author of legal text book and of “Don’t Go Broke in a Nursing Home
  • Teacher of law courses at public and private colleges
  • Continuing Education Instructor for attorneys
  • Columnist for largest regional newspaper in San Diego County and professional journals for 15 years, Contributing author to the book “In Your Service: The Veteran’s Friend”
  • Masters Degree in Financial Services - Estate Planning

Previous Next

    Free Consultation

    Call 760-436-8832

    Math Captcha 42 − = 41