Revocable Living Trusts & Real Estate – A Common Mistake To Look Out For

Revocable Living Trusts &  Real Estate – A Common Mistake To Look Out For


Hi, Attorney Nicole Wipp here from the Family & Aging Law Center. Today I want to talk to you about a really important legal topic which is should your house be titled into you revocable living trust. Now from an estate planning
perspective there is going to be one answer, but from an elder law perspective
there is going to be a completely
different answer, and that’s why this topic is
important because very often you ought to be accomplishing both things. You want to take care of the estate
planning side and you want to take care of the
elder law side. Before I get into this video though, let me remind you that everything that I talk about in videos is not intended, nor should it be construed as legal advice. I am not your lawyer unless you’ve
hired me to be your lawyer. Everything I’m talking about is for
general information purposes only and should be taken that way. So, if you have any questions about
anything that I say in this video the best thing to do is to consult with a qualified elder law attorney in your state. And when I say in your state I also
want you to know that what I’m talking about is
specific to the state of Michigan, and so you may live in a different state. And what I’m about to talk
about may have no application to you
whatsoever, but it might! I don’t know. And that’s why you want to talk to a
good elder law attorney. OK, so let’s talk about should your house be retitled into a revocable
living trust. Well, like I said from an estate
planning perspective the answer is absolutely yes! And the reason is because if you have a revocable living trust the purpose of having it is to avoid probate. That’s the main reason people would have a revocable living trust in today’s legal environment. And so, you want all your assets to be
inside your trust. You want to make sure that
everything is properly titled to your trust so that you can avoid
probate. Right? Yes! That’s the estate planning perspective, but when we get into the elder law
issues this is not so clear cut, and in fact while it is clear cut, but that is not the answer. The answer is not that your house
should be titled into your revocable living trust. And the reason is because in the state of Michigan a house that is titled into a revocable living trust becomes a countable resource when we talk about nursing home Medicaid. Now, if it’s not in your revocable living trust and it’s still in your
name, it’s what we call an exempt resource for nursing home Medicaid. We want resources to be exempt because that means that the state of
Michigan, the Federal Government, and the nursing home can’t look at that resource as available to you or to them when they’re trying to count your assets for what
you’re spend down is going to be. But if you put it into your
revocable living trust now that whole value of your house
becomes available. This isn’t a desirable result. Right? But the next problem is we don’t
want to just leave the house in your name alone because of course we want to avoid probate. And we want to avoid probate for all the normal reasons which I’m not going to get into into
this video. I’ve done another video on probate and you are definitely free to watch that, but we also want to avoid probate because we don’t want to
trigger a situation where if you do need nursing home Medicaid that now the state of Michigan can go in and do a thing that’s legally
allowed called estate recovery. And basically what that means is if your property goes to probate, whether it’s your house or anything else, the state of Michigan can go in and take the entire value of that up to whatever they paid out
for nursing home Medicaid in probate regardless of if you left it to somebody else. The state of Michigan has the legal
right to do that. So you want to avoid probate for the regular reasons and to avoid Medicaid estate
recovery and you want to make sure that your house remains an exempt asset. The answer to doing that in the
state of Michigan is not to title your house directly into your revocable living trust but to create a special type of
deed. Now, if that is something that you want, and you’re in Michigan, please feel free to contact our office. We’re very happy to help. Or make sure that you contact a qualified elder law attorney. That being said we look forward to hearing from you. We are always available to you at The Family &
Aging Law Center.

4 thoughts on “Revocable Living Trusts & Real Estate – A Common Mistake To Look Out For

  1. Do you have any questions about this video? Comment below!

  2. What type of deed?

  3. Great tips. Thanks a lot!

  4. She said for "irrevocable" living trust, then said revocable…..

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