Tags Posts tagged with "Linda M. Toga"

Linda M. Toga

By Linda M. Toga, Esq.

The Facts: I am named executor in my brother’s will. He died recently and his assets include a bank account and a house. Someone told me that since I am the named executor, I can close the account and sell his house simply by presenting the will.

The Question: Is that true?

The Answer: Absolutely not! Although you are named in your brother’s will as the executor of his estate, the surrogate’s court in the county in which your brother resided at the time of his death must admit the will to probate and issue letters testamentary to you before you can take any action with respect to your brother’s assets.

In other words, you must establish to the court’s satisfaction that the will is valid before you are able to act as executor. You cannot assume the responsibilities of executor without the court’s explicit approval.

The complexity, cost and time involved in having a will admitted to probate will vary with the number of beneficiaries named in the will, as well as the number of heirs to the estate, the ease with which your attorney can locate the beneficiaries and heirs, how cooperative those people may be with the attorney in moving forward, the value of the estate and whether anyone contests the admission of the will to probate, among other factors.

While the probate process can be straightforward and relatively inexpensive, there are numerous issues that can arise in the probate process that are best handled by an experienced estate attorney. Some of the most common issues with probate are not being able to locate individuals who are entitled to notice and dealing with individuals who contest the validity of the will.

Fortunately, the percentage of cases where a will is contested and ultimately not admitted to probate is small but, if there are objections filed to the probate of a will, the process can drag on for quite some time, significantly increasing the expenses of the estate.

Assuming the probate process goes smoothly and your brother’s will is ultimately admitted to probate, you will be issued letters testamentary by the court. Only then will you be in a position to marshal your brother’s assets, pay any legitimate outstanding debts your brother may have had, and make distributions in accordance with the wishes set forth in your brother’s will.

Once you have located and distributed your brother’s assets, you will be required to file with the court an inventory of your brother’s assets and releases from the beneficiaries stating that they received the bequests to which they were entitled under the will.

Linda M. Toga provides personalized service and peace of mind to her clients in the areas of estate administration and estate planning, real estate, marital agreements and litigation from her East Setauket office.

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By Linda M. Toga, Esq.

The Facts: My daughter told me that I should have a health care proxy.

The Question: What is a health care proxy and should I have one?

The Answer: A health care proxy is a legal document recognized in New York  State by which competent adults appoint a person to make medical decisions for them in the event they are unable to make those decisions themselves.

Unlike a power of attorney that may be effective immediately upon signing, a health care proxy does not become effective unless and until you are no longer able to make health care decisions. Although only one person can act as your health care agent at a time, in your health care proxy you should name an alternate agent in case the first person you name is unavailable.

In a health care proxy you may give your agent unlimited authority or you may list the circumstances under which your agent can act. However, if you want your agent to be able to make decisions concerning artificial nutrition and hydration, you must specifically state in your health care proxy that your agent has the authority to make decisions about these life-prolonging treatments. You must also mention the Health Care Insurance Portability and Accountability Act, or HIPAA, in your proxy. Most health care proxies prepared prior to 2003 are no longer valid because they lack the required HIPPA language.

Most people assume that health care proxies are only used in cases where an elderly patient is unable to make end-of-life medical decisions. However, health care agents may also play an important role when a younger patient is temporarily unconscious. Since people of all ages may lose consciousness or even slip into a coma as a result of a serious illness or injury, I recommend that every adult sign a health care proxy to avoid conflict between family members and to ensure that their wishes are honored.

It is important to discuss your wishes with the agents you name in your health care proxy so that they know what types of treatments and procedures you find acceptable and which ones you may not want to receive.

Although New York State passed a statute in 2010 called the Family Health Care Decisions Act (the FHCA), which gives people the authority to make health care decisions for loved ones who did not sign a health care proxy, having a health care proxy is preferable because it gives you control over who will be making decisions on your behalf.

If your health care provider relies upon the FHCA to identify the person who will decide whether or not to provide life-sustaining treatments, the statutory decision maker may not know your wishes and may not be able to make the hard choices that are often faced by health care agents. In contrast, if you named a health care agent in a health care proxy and discussed with that agent your wishes, it will be easier for the agent to take the necessary steps to honor those wishes.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Linda M. Toga, Esq.

The Facts:  I am the owner of a family-operated business. My wife and my son John are employed by the business. My other son, Tony, has no interest in being involved with the business. When my wife and I die, I want John to inherit the business, which is my largest asset. However, I want Tony to inherit assets of equal value.

The Question: Are there specific issues I need to address when developing an estate plan?

The Answer: Absolutely. For starters, you need to take an objective look at your business and decide if the business can continue to operate without you.

Even though your wife and son are employed by the business, if you are the person with the knowledge, expertise and contacts upon which the business depends, there may not be much value to the business after your death. In that case, having John inherit the business may result in him actually being short changed with respect to your estate.

If the business cannot thrive without you, instead of inheriting a valuable asset, John could find himself struggling to keep the business afloat and possibly be faced with winding down the business and looking for a new job.

If you determine that the future success of the business is not dependent upon your involvement, you need to determine the best method for calculating the value of the business upon your death. The valuation should take into consideration how John’s involvement with the business may have increased its value over the years.

If, for example, John worked without pay or at a reduced salary, or if he worked more hours than nonfamily employees because it was understood that he would one day inherit the business, then the value of the business should be adjusted down to reflect that fact. If it is not adjusted, John will inherit a business whose value was in part created by him, and Tony will inherit equally valuable assets without having contributed to their value.

Once you have determined how the value of the business will be calculated, you need to consider the value of all of your other assets. If the business is your most valuable asset but the combined value of your other assets is comparable to the value of the business, you can simply leave the business to John and the rest of your estate to Tony.

However, if there is little else in your estate other than your business, such a distribution will not result in equal shares passing to your sons. To address this problem, you can buy a life insurance policy and name Tony as the beneficiary. If you buy a policy with a death benefit that is comparable to the value of your business, when you pass Tony will receive funds equal in value to the business that you leave to John.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Linda M. Toga

The Facts: I recently listed my house for sale with a real estate agent and signed a brokerage agreement. Someone offered the full asking price for the house. My attorney forwarded a contract of sale to the potential buyer’s attorney.

Although the potential buyer had the assets needed to purchase my house, he insisted that costly repairs be made to the house and he did not want to close on the transaction for six months. Since I refused to do the repairs and to wait to close, the deal fell through. The agent is now claiming she is owed the commission since she found a buyer who offered to pay me the full asking price for my house.

The Question: Does a real estate agent earn a commission simply by bringing in a potential buyer who agrees to pay the asking price?

The Answer: Although it is impossible to definitely answer your question without reviewing the brokerage agreement you signed, it would be very unusual if a commission was earned based solely on a potential buyer agreeing to the purchase price. When it comes to residential real estate, commissions are generally earned only when the agent produces a buyer who is “ready, willing and able” to purchase the property.

This standard requires that the seller and the buyer not only agree on the price to be paid, but also on other terms such as the condition of the property, what personal property or fixtures may be included in the sale, financing and the date of possession. A buyer may be ready and willing to purchase but, if he lacks the resources, he won’t be able to make the purchase, precluding the agent from earning a commission.

Similarly, a buyer may have sufficient funds and be able to make the purchase but, if he is not willing to accept the house in its present condition, the sale will not proceed and the agent generally would not have earned a commission under most brokerage agreements.

Even if the buyer and the seller agree on all of the terms and a contract of sale is signed, an agent may not earn a commission if, for reasons beyond the seller’s control, the deal falls through.

In difficult real estate markets where there are many obstacles to closing, experienced real estate attorneys are often able to negotiate and find creative solutions to those obstacles that turn potential buyers into buyers who are ready, willing and able to close on a purchase. When that happens, both the seller and the buyer, as well as the broker, reap the benefits of the sale.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office. The opinions of columnists are their own. They do not speak for the paper.

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The Facts: I am selling my house. A number of years ago I replaced the fence that enclosed my back yard. The person who is buying my house had my property surveyed and it appears that the fence is about 3 feet inside my property line. The title company is requiring me to obtain a boundary line agreement from my neighbor.

The Questions: Is a boundary line agreement necessary under these circumstances? And if so, why is it needed?

The Answer: The quick answer to your first question is, yes. A boundary line agreement is necessary because the title company will not insure the buyer’s ownership interest in the land between the property line and the fence without a writing in which the neighbor states that he has no claim to the land.

The problem you are having is actually very common, especially when old fences are replaced and when new fences are installed without reference to a survey. When a fence is installed inside a property line, the placement of the fence effectively makes the enclosed property appear smaller and allows neighbors to make use of the land between the actual property line and the fence. For example, by installing a fence 3 feet inside your property line, your neighbors may believe that the 3 feet of land outside the fence is actually theirs and may plant hedges or widen their driveway accordingly. Especially in the case of a driveway that encroaches upon your property, the continued use by your neighbor of that driveway may create an easement or develop into an adverse possession claim. If that happens, your use of your property will be negatively impacted and may result in litigation. In any event, when you sell your property, you will need to address the problems created by the misplaced fence.

Assuming your neighbor does not assert an adverse possession claim stating that the land between the fence and the property line is actually his, the title company will likely require that you and your neighbor enter into a boundary line agreement that describes the exact location of the property line. The agreement will be recorded with both your deed and your neighbor’s deed insuring that future owners can accurately locate the property line regardless of the placement of a fence or driveway. When a fence is only off the property line by a foot or so, the title company may accept an affidavit from the neighbor stating that he has no ownership interest in or claim to the land between the fence and the property line. Since the affidavit is not recorded with the land records, it provides a less costly and less formal resolution to the problem created by a misplaced fence. What type of documentation the title company requires is fact specific.

Boundary line disputes (or potential disputes) like the one you described can delay the closing on a real estate transaction and, if not resolved, may be the basis for a buyer terminating the contract of sale. Since so much is at stake, such disputes should not be taken lightly but should be handled by a real estate attorney with experience resolving boundary line disputes and working with title companies.

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By Linda M. Toga, Esq.

The Facts: My mother’s Will contains provisions that are inconsistent with other documents she has signed and with what she told my sister about the distribution of her estate.

The Question: Are the Will provisions void or are the other documents unenforceable?

The Answer: Unfortunately, the situation you’ve described is quite common and often creates a great deal of tension between family members. While it is too late to avoid the problems caused by the inconsistent documents if your mother has already passed, if she is still alive, an experienced estate planning attorney can work with your mother to eliminate the inconsistencies and avoid the resulting problems. As for which of your mother’s documents and agreements now in existence will control the distribution of her estate, that will depend on the types of documents at issue and the provisions of those documents.

A Will only controls the distribution of assets that are owned by the decedent at the time of her death. For example, if your mother left her car to you in her Will but, signed the title to the car over to your sister before she died, you are out of luck. As long as transfer of the title took place during your mother’s lifetime, the provision in the Will is unenforceable because the car was not owned by your mother at the time of her death.

On the other hand, if your mother signed an agreement with your sister stating that her house was to be sold upon your mother’s death and that the proceeds would be divided between you and your sister but, her Will gives you the right to live in the house until you are forty, the Will controls. Unless your sister can demonstrate that your mother lacked capacity to execute her Will or that you unduly influenced your mother and caused her to sign the Will containing the provision that was contrary to her agreement with your sister, your sister will likely have to wait until you turn forty before the house can be sold and the proceeds divided. The reason for this is that agreements generally die with the parties to the agreement. Unless an agreement specifically states that it is binding upon the heirs, successors, assigns and executors of the parties signing the agreement, the agreement is not enforceable after one of the parties dies.

If the inconsistent documents you are concerned about are a Will and a beneficiary designation form signed by your mother, the terms of the beneficiary designations will control. For example, if your mother signed a form stating that her IRA was to pass to your sister but, her Will stated that her entire estate was to be divided equally between you and your sister, the funds in the IRA will pass to your sister. The balance of her estate will pass in equal shares to you and your sister. The same is true with jointly held property and bank accounts that provide for the right of survivorship. In that case, upon the death of one of the joint owners, the property or the funds in the account automatically belong to the surviving joint owner, regardless of any provisions in the deceased joint owner’s Will.

Because of the complexities surrounding the distribution of a decedent’s assets and the issues that arise when there are inconsistencies between various documents relating to estate planning, it is important to review with an experienced estate planning attorney all of the documents and agreements, oral and otherwise, that you may have in place relating to asset distribution. Engaging in estate planning gives you the opportunity not only to learn about the consequences of signing various types of documents and agreements, but also to look at your assets, consider your ultimate goals and take the steps to insure that those goals are met. Only by understanding the relationship between different estate planning strategies and the documents designed to implement those strategies can you be sure that the documents you sign and the agreements you make are consistent and will result in your wishes being honored.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Linda M. Toga, Esq.

I generally do not revisit a topic if I have discussed it in a prior article. However, based on the number of phone calls I’ve received from clients in response to alarming solicitations they’ve received in the mail, I am making an exception this month.

It has been almost three years since I first warned readers about a scam involving unscrupulous companies that scared property owners into purchasing unnecessary certified copies of their deeds at inflated prices ranging from $59 to $129. Unfortunately, the companies behind the scam are still at it. In fact, the problem has apparently become so widespread that the Suffolk County Clerk recently sent a letter to property owners advising them that there was no immediate need to purchase certified copies of their deeds.

My original article which includes information on how to obtain a certified copy of the deed to your property in the unlikely event you need one, follows. While this article deals exclusively with deeds, there is a lesson to be learned here that applies to all types of legal documents. If you are asked to send money or to take some other type of action in connection with a contract, power of attorney, deed, lease or license, to name a few, it is best to consult an experienced attorney before you act. Scams like the one discussed here are only successful when people make uninformed choices. So please, get expert advice before you act in such matters.

The Facts: I recently received a letter from a company suggesting that I should have a certified copy of my deed. The company offered to get the deed for me for about $85.

The Question: Is this a scan?

The Answer: Yes, it is a scam and one that is quite lucrative for the company making the offer. The reason it is a scam is that most people will never need a certified copy of their deed. In the unlikely event a property owner needs to produce a certified copy of a deed, they can easily obtain one either in person or by mail for a fraction of what the company is charging. Although companies like the one that sent you the letter often refer to an article published by the Federal Citizen Information Center (“FCIC”) to convince property owners that they must have a certified copies of their deeds, it is noteworthy that the FCIC website contains a warning about the deceptive practices of companies that send mass mailings like the one you received to unsuspecting property owners.

How It Works: When you purchased your property, the original deed signed by the seller should have been forwarded to the county clerk for recording. Once the deed was recorded in the county land records, the original deed would have been returned to you, as the new property owner, or to your attorney. If, for some reason, the original deed was not returned to you or your attorney, or if it has been lost, you can obtain a copy of the deed from the county clerk in the county where your property is located. For property in Suffolk County, you can call the Suffolk County Clerk’s Office at 631-852-2000 for information on how to obtain a copy of your deed. If, in fact, you do need a certified copy of your deed, the county clerk can also provide you with a certified copy of your deed. Rather than paying the $85 charged by some private companies, you will only have to pay the county clerk about $5.00, including postage and handling, to get a certified copy of a deed up to 4 pages long.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Linda M. Toga, Esq,

At least once a week a new client who owns real property with someone else comes to my office with a question about his rights and obligations with respect to his joint ownership of the property. Oftentimes the questions arise because the owners do not see eye to eye as to who is responsible for paying the carrying costs on the property (real estate taxes, insurance, maintenance and repairs) or how the proceeds will be divided in the event the property is sold. Since joint ownership of property can take a number of forms, each conferring different rights and obligations upon the owners, the answers to these questions require an understanding of the different ways in which people can jointly own property.

Individuals who are not married to each other can own real property as tenants-in-common or as joint tenants with right of survivorship. In addition, spouses can own real property as tenants-in-the-entirety.

Owners who are tenants-in-common each own a share of the real property. They have the right to sell or transfer their own share to whoever they want without the consent of the other owners, either during their lifetime or by Will. Tenants-in-common need not own equal interests in the property. For example, if three people own a piece of property as tenants-in-common, each may have a one-third interest in the property but, one may have a one-half interest while the others each have a one-quarter interest. Since the ownership interests may not be the same for each tenant-in-common, it is important that the percentage of the property owned by each tenant-in-common is set forth on the deed. It is also important that tenants-in-common set forth in writing what their obligations are with respect to the carrying costs associated with the property. Generally each owner’s share of the carrying costs is the same as his ownership interest in the property. For example, if four people each own 25% of a property, they are each responsible for paying 25% of the carrying costs. However, the owners may agree to a different arrangements, especially if not all of the owners reside or make use of the property. To avoid confusion and disputes, a detailed agreement setting forth the rights and obligations for each tenant-in-common should be signed by all of the owners. In addition, detailed records should be kept of contributions made by each owner toward the cost of owning the property.

Unlike tenants-in-common, when more than one person owns property as joint tenants with right of survivorship, it is assumed that each owner has an equal ownership interest in the property. Joint tenants are not free to sell or otherwise transfer their interest in the property to a third party without consent of the other joint tenant owners. In addition, a joint tenant with right of survivorship cannot leave her share of the property to someone in a Will. That is because the right of survivorship essentially guarantees that the “last person standing” is the sole owner of the entire property. For example, if there are three joint tenants and one dies, the two remaining joint tenants automatically become the sole owners of the entire property. Upon the death of one of the remaining joint tenants, the survivor becomes the sole owner of the entire property. This is true even if the other joint tenants died with Wills explicitly leaving their interests in the property to a third party. Like tenants-in-common, joint tenants should set forth in writing what their obligations are with respect to the carrying costs of the property and how the proceeds from the sale of the property will be divided if not equally.

Although anyone can own property as tenants-in-common or joint tenants, only spouses, both traditional and same sex, can own property as tenants-by-the-entirety. In fact, in New York, even if the deed does not specifically indicate that ownership is by tenants-in-the-entirety, real property is assumed to be held by spouses as tenants-in-the-entirety absent language in the deed to the contrary. Even if a deed simply provides that the owners are “John Doe and Jane Doe, his wife,” it is presumed that John and Jane are tenants-in-the-entirety. If they wish to hold the property as tenants-in-common, the deed must specify that they are tenants-in-common and must indicate the size of each owner’s interest in the property. The rights and responsibilities associated with tenants-in-the-entirety are identical to those associated the joint tenancy with the right of survivorship. Like joint tenants with right of survivorship, tenants-by-the-entirety cannot dispose of their share as they please. Rather, upon the death of the first spouse, the surviving spouse automatically owns the entire property. A divorce will sever a tenancy by the entirety, resulting in the owners being tenants-in-common.

Because of complexities associated with jointly held property and the potential for unintended consequences, it is good idea to consult an attorney when purchasing property with others to insure that you understand your rights and obligations and have taken the steps necessary to protect your interests.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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The Facts: I have two dogs that I consider part of my family. I want to be sure they are cared for after I die. Someone suggested that I include a Pet Trust in my Will

The Question: Do you think this is a good approach?

The Answer: Yes, I do. However, in addition to the Pet Trust, which will not exist until after your Will is admitted to probate, it is important to make temporary arrangements for the care of your dogs that can be in place immediately upon your death.

When thinking about the provisions to include in the Pet Trust, you must not only consider who will care for your dogs, but also whether the appointed caregiver has the resources to cover the costs associated with pet ownership. Even if money is not an issue, you need to confirm in advance that the caregiver’s living arrangements are suitable for the dogs. As much as a potential caregiver may want to care for your pets, some apartment buildings and residential communities do not permit residents to own pets. If the caregiver of choice lives in such a community, or lives in a setting that is not large enough for the dogs, it is best to name someone else to adopt your pets after your death.

Once you have settled on a caregiver, you should consider including in your Pet Trust a description of the care you want your pets to receive. For example, if your dogs are groomed once a month, have an annual check-up by the vet and have their teeth cleaned three times a year, this schedule can be set forth in the trust. You can also name the groomer and vet that have taken care of your dogs in the past so that the caregiver can continue to use people with whom your dogs are familiar. Alternatively, you can prepare a letter to the caregiver in which you provide the caregiver with this information.

While the purpose of the Pet Trust is to insure that your dogs will be cared for after you die, it can also serve as a vehicle for providing your caregiver with instructions with respect to the handling your dogs’ remains after they die. This information is important and useful to the caregiver who will certainly want to honor your wishes.

In addition to setting forth in the Pet Trust provision of you Will the name of the caregiver and the type of care you wish your dogs to receive, both during their lives and after their deaths, you will need to allocate a certain amount of money to the trustee of the Pet Trust. The job of the trustee is to distribute the funds to the caregiver as needed to be used for the benefit of your dogs. Some people name the caregiver as the trustee but, you may have different people in those roles if you wish.

A final decision that you will have to make in connection with the Pet Trust is what happens to any of the funds left in the trust after your dogs pass away. Many people who have a Pet Trust direct that any money left in the trust after the death of the pet goes to the caregiver. Another popular arrangement is for the money to be donated to an organization that cares for abandoned and/or abused animals.

In light of the number of issues to be considered when creating a Pet Trust, and the fact that it will be part of your Will, you should discuss your ideas and concerns with an experienced estate planning attorney. That is the best way to insure that your dogs will be cared for in accordance with your wishes.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

 

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By Linda M. Toga, Esq.

The Facts: My father has decided to gift his house to me and my brother and to retain a life estate for himself. This is part of his Medicaid planning.

The Question: What are the advantages and disadvantages of making this transfer?

The Answer: The advantages of putting the house in your names now is that it starts the clock running for purposes of Medicaid benefits that will cover nursing home care. As long as five years pass between when the house is transferred and when your father applies for Medicaid, the full value of the house will have no bearing on your father’s eligibility for benefits. In addition, by retaining a life estate in the house, your father will continue to be eligible for real property tax exemptions such as Enhanced Star and veterans exemptions that he may now enjoy. It is important to note that the life estate has a value which will be taken into consideration when he applies for Medicaid. However, the life estate should not cause him to be ineligible to receive benefits.

The disadvantages of transferring the house to you and your brother outweigh the advantages. First, if the house is sold during your father’s life, he is entitled to receive the value of his life estate. While the life estate itself is not considered an available resource for Medicaid purposes, the cash that he receives from the sale of his life estate will be deemed an available resource which may make him ineligible for benefits.

Second, if you and your brother are gifted the house now, your basis in the house for capital gains tax purposes will be the same as your father’s basis. If, on the other hand, you are not gifted the house now but you inherit the house upon your father’s death, you will get a step up in basis. Assuming your father has owned the house for a long time, getting the step up in basis upon his death will likely avoid significant capital gains taxes when you and your brother sell the house.

Third, if you and your brother own the house, your creditors will be able to attach liens and/or judgments to the property. This will not necessarily decrease the value of the property but, those liens and judgments will have to be paid when the house is sold, regardless of whether that is before or after your father’s death. If your father needs to apply for Medicaid in three years, for example, your father will be ineligible for Medicaid for a period of time based upon the value of the gifted house. If you have to sell the house to cover your father’s expenses during the penalty period, the amount of money you and your brother will have to pay those expenses will be decreased by the amount of any judgments and liens that had to be paid off at the time of the sale.

Clearly, the disadvantages of gifting the house now are significant, and individual circumstances and goals may require differing approaches. There are also other options available to your father. For example, rather than transferring the house to you and your brother now, your father can transfer the property into an irrevocable trust. The trust can provide that the house passes to you and your brother when your father dies. While using a trust will not avoid the five year Medicaid look-back period, it will protect the property from your creditors and result in you and your brother getting a step up in basis upon your father’s death.

In light of the number of issues to be considered, it would be important to discuss this matter with an experienced elder law attorney and/or financial/tax advisor before deciding which option is the best one for your father.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.