Todd D. Wolfrum
Todd D. Wolfrum Attorney-at-law
For many, a home is the most or only valuable estate asset they own and estate planning can consist entirely of deciding how to title the home so it passes to heirs outside of probate court.

If you own a home and not a great deal in other property, the questions are two: 1) Who are you? and, 2) Who are your intended heirs?

The basis of the first question is whether or not you need the property. Planning on selling it all and moving to Florida? Or are you settled-in for life and set-up on a fixed income? And how healthy are you anyway?

You can always give the home outright to your heirs while you are alive, but once given, it can't be so easily taken back. And that leads us to the second question:

To whom are you leaving the property. Heirs are usually children, but are they trustworthy or sketchy? Are they likely to be sued or divorced during your life? Do they have any Grateful Dead or Phish paraphernalia (the best evidence of irresponsibility)?

To begin, married couples usually prefer to hold property in "survivorship", meaning that they both own half the property until one of them dies.

Holding property in survivorship avoids probate for spouses, but only solves the long-term problem of passing property to heirs if the heirs also hold survivorship interests. If an heir does hold a survivorship interest, they control a share of the property. Maybe of more significance, the heir's creditors and spouses control a share of their property.

Until recently, people advancing in age could transfer property into life estates and name who the property goes to after death without the pitfall of Medicaid liens (better known as nursing home fees). The process for this would be to deed the property from "X and Y" to "X and Y for their lives, remainder to A, B, and C." This transfer had the double advantage of avoiding probate and Medicaid.

Ohio now says it will attempt to recoup all property a Medicaid recipient owned the minute before death. With a life estate, an owner sill owned the whole property a minute before death. An additional problem with life estates is that it creates vested "remainder interests" in heirs, opening the gate for creditor attachment and requiring heir-approval of sales or mortgages.

A newer way in Ohio to name beneficiaries and avoid probate is the "Transfer on Death" deed. This device is similar to "Payable on Death" accounts one might hold at a bank. The big advantage here is that the owner does not immediately give anything away upon the transfer. The owner is still able to later sell or mortgage the property and terminate the beneficiary's interest without their approval, meaning heir creditors cannot get at it either, although Medicaid definitely will.

The only sure way to avoid the Medicaid dilemma is to outright give the property away or buy sufficient long-term care insurance. If five years pass before the Medicaid bill begins to run, you're good to go. Do this only if you trust your heirs entirely because it is entirely theirs once you give it to them.

You might rationalize that your heir is eventually going to get it anyway, so they might as well have it now. But if you happen upon a tie-die Jerry Garcia mural hanging over your heir's mantle, let the transfer happen after death, when you don't need a place to live anymore.