Planes, Trains, and Automobiles- In or Out of a Revocable Living Trust?

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Planes, Trains, and Automobiles Should Normally Be In Your Revocable Living Trust

In the video above, I discuss a recent MSN.com article entitled "Five Items to Leave Out of Your Revocable Living Trust."  (the article link is already broken, but there is an image in the video, and you can also view the article online here (last accessed 1/18/2025); you will have to scroll down past the first few articles). 

The author writes as follows:

         "Vehicles. Whether it’s a ’63 Corvette, Harley chopper or prop plane, all that’s required to pass it on is a simple written instruction to transfer the title to a beneficiary. In a trust, you’re exposed to lawsuits over accidents that involved the vehicle." 

Generally, I disagree. Vehemently.

In the video, I discuss the following:

1. Articles, publications, seminars, and presentations should never be construed as legal advice

2.  The author suggests that only a simple written instruction is necessary to transfer a title to a beneficiary, which statement is misleading or incorrect.

3.  Beneficiary and Transfer on Death Designations may sometimes work to avoid probate, but they have limitations and risks, and do not constitute a 'plan' to avoid probate (see links below).  

4. The liability issue raised by the author makes no sense for most revocable living trusts settled in most states.

5. The author assumes that the only purpose of a revocable living trust is to avoid probate, which is untrue, and assets outside of a trust do not serve and may impair lifetime planning benefits of a trust:

• Consistent and competent lifetime management of assets is a lifetime planning objective best accomplished with a trust.

• Guardianship avoidance is a lifetime planning objective best accomplished with a trust.

• Protection of assets from a court-appointed guardian is a lifetime planning objective that can only be accomplished with a trust.

• Aging in Place Planning is a lifetime planning objective that can only be accomplished with a trust.

I acknowledge in the video that there are always exceptions, and that the author may not have actually been considering revocable living trusts when drafting the article, but generally I disagrees with the headline and conclusion of the author regarding planes, trains, and automobiles. 

Consider additionally the following: 

• Beware Direct Transfer Designations (TODs and PODs);
• Aging in Place Planning Heightens Necessity of Trust Funding;
• Beware Direct Transfer Designations (TODs and PODs)- Part II: Ohio Transfer of Death Designation Affidavit (TODDA) for Real Estate- Lapse of Insurance Coverage;
• Beware Direct Transfer Designations (TODs and PODs)- Part III- Transfer on Death Deed for Real Estate Results in Loss of Insurance Coverage and Impairment of Asset Value.   

I urge you to attend an "Aging in Place Planning" presentation by signing up for an upcoming live webinar.  You can find these periodically on my blog or on the events page of the firm's Facebook page.  You don't need to wait, however, for a scheduled event; there is a recorded version available here: https://bit.ly/Aging-in-Place-Workshop.  You might also consider inviting your children and trusted advisors to attend.

 

No Lift Policies? Will Your Institutional Care Provider Pick You Up When You Fall?

 

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In this video, Attorney Donohew discusses a Washington Post investigative report about "fall assist" 911 calls from assisted living and other institutional care providers, and the prevalence of "No-lift" policies. 

The Washington Post article is entitled "Senior homes refuse to pick up fallen residents, dial 911. ‘Why are they calling us?,"  which came to Attorney Donohew's attention as a result of an article published by Rebecca C. Morgan, entitled,  "What Services are Provided by ALFs?" 

'

According to  the Washington Post, 

"[l]ift-assist 911 calls from assisted living and other senior homes have spiked by 30 percent nationwide in recent years to nearly 42,000 calls a year...That’s nearly three times faster than the increase in overall 911 call volume during the same 2019-2022 period, the data shows." 

The article notes this practice is particularly prevalent in Illinois, and why the increasing number of calls is causing controversy. 

Pennsylvania's Controversial and Pernicious Filial Responsibility Law- Repeal, Rescue, or Worse?

 

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This video is based in large part on a recent article authored by Professor Katherine C. Pearson, Filial Friday: Modification of Pennsylvania's Filial Support Law Passes House Unanimously (last accessed 10/31.2024).  Professor Pearson is also the author of of the seminal law review article on the subject of filial responsibility, Filial Support Laws in the Modern Era: Domestic and International Comparison of Enforcement Practices for Laws Requiring Adult Children to Support Indigent Parents (last accessed 10/31/2024).  Therein, Professor Pearson wrote:

Indeed, as set forth in Section V of this article, case reports and news reports from Pennsylvania demonstrate a potentially significant trend, where third-party creditors are using filial support laws to compel payment or cooperation by adult children to cover their parents’ costs in nursing homes or similar care settings. While the Pennsylvania trend is echoed in at least one other state, South Dakota, Section VI of this article demonstrates that a lack of national consensus in application of filial support laws can create inconsistent results among U.S. states, which may increase the potential for results that seem surprising or unfair. 

The following are links to articles on this blog regarding filial responsibility laws: 

• Filial Responsibility Rule Means Son, Not Father, Must Pay Legal Bill for Negotiating Medicaid Penalty Reduction
• No Good Deed Goes Unpunished? Caregiver Exemption Does Not Apply When Medicaid Recipient Is Receiving Home Care
• Filial Support Laws Chaos: Pennsylvania and New Jersey Laws Clash
• Three Surprises to Watch Out for When Paying for Long Term Care
• Maryland Repeals Filial Responsibility Law
• Filial Responsibility Laws Complicate Estate and Financial Planning
• Filial Responsibility In the News
• Filial Responsibility Laws Lead to Chaos
• Man Can't Challenge Discharge of Brother's Debt for Mom's Care under Filial Responsibility Law
• Use of Filial Responsibility to Collect a Nursing Home Debt Survives Federal Challenges

• Elderly Couple May Be Responsible for Adult Son's Unpaid Medical Bills
• California Heir Liable to Reimburse State for Mother's Medicaid Benefits
• Conveyance to Son Was Fraudulent, But His Siblings May Also Be Liable Under Filial Support Law
• Filial Responsibility- Complicating Estate, Retirement and Asset Protection Planning
• Pennsylvania's Filial Support Law Survives Federal Challenge (The Eades Case)
• Conveyance to Son Is Fraudulent, But Siblings May Also Be Liable Under Filial Support Law
• Adult Children Could Be Responsible for Parents' Nursing Home Bills
• Son Liable for Mother's Nursing Home Bill Under Filial Responsibility Law (The Pittas Case)
• The Legal Responsibility of Adult Children to Care for Indigent Parents (NCPA Policy Suggestion link broken)

The following are links to articles describing legal mechanisms by which nursing homes attempt to create filial responsibility even in the absence of filial responsibility statutes: 

• Promissory Note Executed by Nursing Home Resident’s Daughter Is Not Illegal Third-Party Guarantee
• Filial Responsibility- Resident’s Son Not Liable for Breach of Contract Because He Did Not Cause His Mother to Be Ineligible for Medicaid;
• Judge Can Not Impose an ‘Unusual’ Condition on a Reversal of a Default Judgment in a Nursing Home Breach of Contract Lawsuit;
• Tortious Interference With Contractual Relationship Claim Most Recent Possible Remedy Nursing Homes can Employ Against Children of Nursing Home Residents;
• Conservator Owes Duty to Nursing Home to Timely Apply for Medicaid;
• Agent Under Power of Attorney Liable for Damages to Nursing Home for Breach of Contract;
• Conveyance to Son Was Fraudulent, But His Siblings May Also Be Liable Under Filial Support Law;
• Nursing Home May Sue Resident's Daughter for Breach of Contract.

Additional Resources: 

• Losing Loved Ones and Your Livelihood: Re-Evaluating Filial Responsibility Laws
• Filial Support Laws: “A Sleeping Giant”
• Filial Responsibility: Can the Legal Duty to Support Our Parents Be Effectively Enforced?
• A Rational Role for Filial Responsibility Laws in Modern Society?

Finally, in the video I refer to a CMS policy paper that advocates enforcement or adoption of filial responsibility. I cannot find the link to that paper, but am searching for same.  The paper was, in my opinion, the culmination of an effort that included a 1983 administrative interpretation of Medicaid regulations which permitted state Medicaid administrators to "require adult family members to support adult relatives without violating the Medicaid statute." See,  Medicaid Manual Transmittal No. 2, HCFA Pub. 45-3, no. 3812 [New Developments 1983 Transfer Binder], 3 Medicare & Medicaid Guide (CCH) 5f 32,457 (Feb. 1983).  I will supplement when I locate the paper. 

Estate Tax Planning for 2026 Tax Changes: Modest Estates At Risk?

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The estate tax is a tax on the value of a person’s assets and property at the time of their death. Upon your death, if the total value of your estate is above a certain threshold amount, known as the federal estate tax exemption, the IRS requires your estate to pay the tax before any assets can be passed to your beneficiaries. Under current law, every year this exemption rises with inflation, but in any given year, politicians can change the amount of your coupon.  Worse, the exemption amounts currently in place sunset or expire beginning in 2026.  

In 2024, the federal estate tax exemption is $13.61 million for individuals ($27.22 million for married couples). Simply put, if you die in 2024, and your assets are worth $13.61 million or less, your estate won't owe any federal estate tax. If, however, your estate is worth more than $13.61 million, every dollar more than that will be taxed at a whopping 40% tax rate.

The current $13.61 million estate tax exemption is set to expire on Jan. 1, 2026, and return to its previous level of $5 million, which when adjusted for inflation is expected to be around $7 million.  Of course, we can't know whether Congress will step-in before to change the law, and we can't know if that change will be helpful or harmful to your current estate plan.  

Additionally, there are some inherent variables in your estate plan, in addition to the tax variables.  We don't know (1) when you will die, (2)  how much money you’ll have when you die, (3)  what the estate tax exemption will be when you die, and as importantly (4) how long,  legally or medically, you will be able to plan for yourself or change your estate plan. That’s why it’s so important to work with an attorney who will develop a long-lasting relationship with you and have processes in place to ensure that you are updated when the law changes and put strategies in place to protect your family, regardless of the amount of the estate tax exemption or the value of your assets.

In addition, the state you live in can also have an estate tax, separate and apart from the federal government’s estate tax. Fortunately, both states in which most of my clients reside, Ohio and Missouri, have neither an estate nor inheritance tax. Illinois, a state in which I am admitted to practice, but in which I no longer practice, is one of seventeen states that have an estate or inheritance tax. In Illinois, any amount of your estate over $4 million will be taxed at a graduated rate that goes as high as 16% based upon the 2024 tax rates. Eleven states, and the District of Columbia, have an estate tax, while five states have an inheritance tax, where they tax people who live in their state when they receive an inheritance. Currently, Maryland is the only state in the nation that has both an estate tax and an inheritance tax.

By using various estate planning strategies, you can reduce — or even eliminate all together — your estate tax liability. Some of the strategies are simple, but the more money you have, the more complex they’ll need to become, for example by using irrevocable trusts. Regardless of the method you employ, without question, these strategies can save your family from a massive tax bill, and are therefore well worth it the time and expense necessary to design, draft, and implement them.  I discussed many of these strategies in my previous article, Looking Ahead to 2026- Estate Tax Exemption Sunset and Current Planning Opportunities.

If you’d like to learn more, or need to get a plan in place to save your family from a major tax burden, give us a call. 

Funding Your Trust

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Funding a trust is the most important first task in implementing the trust. It begins immediately upon executing or signing the trust, and consists of transferring all of your assets and property to the trust. A trust only governs the property or assets it owns or controls. In the video, Attorney Donohew introduces and explains how to use a Trust Funding Checklist to ensure that a trust is fully and properly funded.

Once your Trust is funded, you will need to keep and maintain the trust by, among other things, keeping the trust funded with newly acquired assets. If you purchase a new house or additional real estate, for example, the new property will need to be put in your trust. If you take title directly in the name of the trust, you won't have the administrative burden of preparing a new deed. Similarly, If you open a new bank or investment account, opening it directly in the name of the Trust will make it easier. In other words, keep your trust in mind as you make other legal and financial decisions.

You should also review your estate plan, and the documents that comprise the plan periodically. You should also review your plan after any major change in your life, or in the lives of your beneficiaries and fiduciaries, and any time your circumstances, goals or needs change dramatically. Regardless, the law and practice change periodically, so even if everything in your life seems to be stable and consistent, periodic review ensures that your plan is taking advantage of developments, and is not harmed or thwarted by changes in the law or practice.

Click to get your own Checlist: Funding Instructions Checklist.

The following are important articles regarding trust funding and links to funding forms:

ARTICLES

• A Signed and Recorded Deed is Necessary to Prepare A Deed Funding Your Trust
• Aging in Place Planning Heightens Necessity of Trust Funding
• Tenant's Estate Sues Landlord for Buyout Payment- Contracts and Agreements Are Assets

FUNDING FORMS*

Single Person

• Bank, Credit Union, Accounts and Safe Deposit Boxes 
• Investment Accounts (Stocks, Bonds, Mutual Funds)
• Stock Certificates
• Savings Bonds (call counsel)
• Life Insurance Beneficiary Designation
• Life Insurance Change of Ownership
• Non-Qualified Annuity Beneficiary Designation
• Non-Qualified Annuity  Change of Ownership
• Retirement Plan, IRA, SEP, Keough, TSA. Qualified Annuity Beneficiary Designation
• Homeowner's, Property & Casualty Insurance Policy ANI
• Motor Vehicle Insurance Policy ANI
• Motor Vehicle Title (Ohio)
• Motor Vehicle Transfer on Death (Missouri)

COUPLES

• Bank, Credit Union, Accounts and Safe Deposit Boxes
• Investment Accounts (Stocks, Bonds, Mutual Funds)
• Stock Certificates
• Savings Bonds (call counsel)
• Life Insurance Beneficiary Designation
• Life Insurance Change of Ownership
• Non-Qualified Annuity Beneficiary Designation
• Non-Qualified Annuity  Change of Ownership
• Retirement Plan, IRA, SEP, Keough, TSA. Qualified Annuity Beneficiary Designation
• Homeowner's, Property & Casualty Insurance Policy ANI
• Motor Vehicle Insurance Policy ANI
• Motor Vehicle Title (Ohio)
• Motor Vehicle Transfer on Death (Missouri)

The forms provided on this page are general and simple forms.  These use of any or all of these forms may not be applicable to your situation and circumstance.  Accordingly, these forms should be used only after consultation with counsel. 

Nothing contained herein should be construed as constituting legal advice which can only be given by a licensed attorney familiar with you goals, needs, and circumstances.