Another Morbid Question

[MSbklawyer]

I wondered that too. I didn't see anything in the Ohio law that answers the question.

More googling! This article on Avvo, written by an Ohio attorney, says that a transfer of death affidavit is revocable and that the beneficiary cannot encumber the property. http://www.avvo.com/legal-guides/ugc...ath-affidavits

I fear that is not going to help Daisysmom unless she misstated or misunderstood what her mother signed.

If you ever move to South Mississippi, you've got a paralegal job waiting on you.

[MSbklawyer]

I've never seen these kinds of affidavits before. I wonder if they're unique to Ohio? But I think they are a good idea for giving people a way around the probate process without having to make an irrevocable transfer of a remainder interest.

That raises another interesting question: Since these affidavits are freely revocable by the transferor, if a property owner who has signed one of these affidavits files for bk, would that right to revoke the transfer become property of the bk estate and therefore be exercisable by the bk trustee? My shoot-from-the-hip answer would be 'yes'.

LadyInRed, I'm sure you will have Googled the answer to this up in about 30 minutes or so. ;) Who needs Westlaw when you've got Google and LadyInRed?

I hope, for Daisysmom's sake, that this is what her mother used instead of the traditional life estate / remainder arrangement.

[tobee43]

one would think the possible solution is to re-establish the estate planning and transfer everything into a living trust. free will on the part of her mom, gives her mother the opportunity and right to change whatever she so choses dealing with her estate...even if that includes exclusions of some or additions of others. those provisions can be drawn under that trust to protect even the executor of the estate...it can actually add a clause limiting any, all or some of the distributions of the estate for 20 years, if so desired. put the deed in the trust..protect all assets anyway possible within the confides of the law . ( i'm working on a calif trust, there is one written provision applicable to one of the beneficiaries of one of the estates/trusts limiting their distribution in just that manner). if the estate is already set up in this format that they can just do a springing trust and carry it all over with all the pertinent changes, hopefully the will (which lists all the instructions of the property in question), it is simply a pour over to the trust if one exists. and, if there is none, i wonder why the estate atty didn't recommend other options.

"Under the Ohio Trust Code, a revocable trust (sometimes also known as a "living trust") is a trust that the grantor can amend (change) or revoke (cancel) during his or her lifetime. Through the terms of the revocable trust, the grantor keeps all the benefits of any property placed into it for the rest of his or her life. The grantor also can be the trustee, but the grantor's spouse or a trust company also often serves as trustee. A revocable trust can be funded with any property such as bank and brokerage accounts, stocks and bonds, a home and other real estate. Some revocable trusts may not be funded initially, but rather at a later time or at the grantor's death."

[MSbklawyer]

one would think the possible solution is to re-establish the estate planning and transfer everything into a living trust.

The problem with that is that if this is a life estate / remainer arrangement, then Daisysmom owns the remainder interest. Her mom -- i.e. Daisy's grandmother, can't transfer that remainder interest into a trust because it doesn't belong to her. If Daisysmom were to transfer it back to her, there would be a fraudulent conveyance problem.

[tobee43]

really, why not, you mean her mother has no right to change her mind? i get where you are with this, but am hard pressed to believe someone doesn't have the right to change their estate planning or possibly have the others "buy" back the interest of her share prior to a bk or some other type of resolve here.

we have seen numerous situations where there has been co-ownership of properties and at times the shares are purchased prior to the filings by the other owners, or, if it goes that far, i do know of instances where the trustee has given the family or other owners, first choice of the buy back so the entire property is not sold and then the trustee has to make the distriubtions. actually, even if the trustee sold the property a distribution must be done to those other owners prior to keeping any funds for distribution to creditors. so one would hopefully think it's something that can be worked out prior to the filings. or maybe if possible wait to file until the dust settles?

a sticky situation to say the least.

[LadyInTheRed]

If you ever move to South Mississippi, you've got a paralegal job waiting on you.

Thanks! I've never been in the South. That's a trip I want to take after I'm done with my Chap 13 and save some cash. If I love it and don't want to leave, I'll look you up! Of course, since you only post on internet forums when drunk, you probably won't remember who I am.

That raises another interesting question: Since these affidavits are freely revocable by the transferor, if a property owner who has signed one of these affidavits files for bk, would that right to revoke the transfer become property of the bk estate and therefore be exercisable by the bk trustee? My shoot-from-the-hip answer would be 'yes'.

LadyInRed, I'm sure you will have Googled the answer to this up in about 30 minutes or so. ;) Who needs Westlaw when you've got Google and LadyInRed?

LOL! Nope, I don't get up that early in the morning. It is amazing how many times I find an answer to a legal question using Google without ever having to use Lexis, except maybe to Shepardize a case I find using Google (the firm I work for dropped Westlaw a couple of years ago).

But, I don't even need Google when the Ohio law is still open in my internet browser. From ORC 530.23(B):

(4) The designation of a transfer on death beneficiary has no effect on the present ownership of real property, and a person designated as a transfer on death beneficiary has no interest in the real property until the death of the owner of the interest.

(7)(a) A transfer on death beneficiary takes only the interest that the deceased owner or owners of the interest held on the date of death, subject to all encumbrances, reservations, and exceptions.

Under division (4), The transferor/debtor in your hypothetical still has all rights to transfer the property, so those rights become part of the transferor's BK estate. Under division (7), the beneficiary only gets the interest in the property that the transferor has at death. So, I don't think it is even necessary for the trustee to exercise the right to revoke.

I somehow missed ORC 5302.23 last night. I hope you won't revoke that job offer! Division (5) is what provides that a transfer at death affidavit is fully revocable without the consent of the beneficiary.

really, why not, you mean her mother has no right to change her mind? i get where you are with this, but am hard pressed to believe someone doesn't have the right to change their estate planning or possibly have the others "buy" back the interest of her share prior to a bk or some other type of resolve here.

If the mother executed a survivorship deed, she transferred a present interest in the property to her daughter. Once you give away property by executing and recording a deed, you can't change your mind and get it back unless the other person sells or gives it back to you by executing another deed. That's what makes the transfer on death affidavit such a neat tool. With the transfer of death affidavit, you can change your mind at any time. When property his held in joint tenancy with rights of survivorship (what Ohio calls a Survivorship Tenancy), what is in the property owners' estate planning documents is irrelevant. Changing the mother's estate planning documents does not change the fact that she already gave away an interest in the property. As you know, Daisysmom can't give property to her mother to keep it out of the hands of the BK Trustee without waiting at least a year after the transfer to file the BK. Her mother could buy it from her at fair market value, but I doubt she wants to do that. Besides, that would give Daisysmom cash to exempt.

we have seen numerous situations where there has been co-ownership of properties and at times the shares are purchased prior to the filings by the other owners, or, if it goes that far, i do know of instances where the trustee has given the family or other owners, first choice of the buy back so the entire property is not sold and then the trustee has to make the distriubtions. actually, even if the trustee sold the property a distribution must be done to those other owners prior to keeping any funds for distribution to creditors. so one would hopefully think it's something that can be worked out prior to the filings. or maybe if possible wait to file until the dust settles?

a sticky situation to say the least.

A market value transaction between Daisysmom and her mother before the BK or between her mother and the trustee after BK are certainly options. And, if the Trustee sells the property, Daisysmom would get her share of the proceeds. But, I doubt Daisysmom or her mother sees those as attractive options.

Yes, the situation is sticky. One way to look at this is that Daisysmom's mother gave an interest in the property to her daughter and now has to accept the fact that that interest now has to go to Daisysmom's creditors. I wonder what kind of advice she got before signing that deed. Lots of people transfer their interest in property during their life to avoid probate without fully considering the possible consequences. Sometimes, they don't even understand that they just gave away their rights to unilaterally control the property.

[ValleYum]

I am just happy that DM *asked* before she filed about this...

[LadyInTheRed]

If you ever move to South Mississippi, you've got a paralegal job waiting on you.

I am just happy that DM *asked* before she filed about this...

Me too.

Daisysmom, have we completely confused you yet? Do you have a copy of the document your mother signed? What does it actually say? When did your mother sign it? OH law changed in the 90s and those changes may or may not be relevant to your situation if the doc was signed before those changes.

You said in another thread that you are going to file next week and that your attorney says you have an easy no asset case. I hope your attorney knows about that document and that it isn't a simple statutory survivorship deed. If not, you should call him/her first thing in the morning.

[tobee43]

originally posted by LadyIntheRed: If the mother executed a survivorship deed, she transferred a present interest in the property to her daughter. Once you give away property by executing and recording a deed, you can't change your mind and get it back unless the other person sells or gives it back to you by executing another deed. That's what makes the transfer on death affidavit such a neat tool. With the transfer of death affidavit, you can change your mind at any time. When property his held in joint tenancy with rights of survivorship (what Ohio calls a Survivorship Tenancy), what is in the property owners' estate planning documents is irrelevant. Changing the mother's estate planning documents does not change the fact that she already gave away an interest in the property. As you know, Daisysmom can't give property to her mother to keep it out of the hands of the BK Trustee without waiting at least a year after the transfer to file the BK. Her mother could buy it from her at fair market value, but I doubt she wants to do that. Besides, that would give Daisysmom cash to exempt.

ahhhhh yes, however, i have seen many take back an asset in a blink of eye. great answer, and in some states it's 2 years. even i; may hire your ROFL!!! (i love our exchanges it makes a mind work!) you are very good Lady, paralegal to paralegal i still use westlaw and some old close professors at boston u , and a very FEW good attys for some info. probate has been a sideline of mine for many a year, but now i'm really in the middle of some interesting clients in estate planning and execution, but you are the expert there in calif. so don't be surprised if pm's you for some advise so i look better to my employers LOL!

however, my suggestion would be do the transfer and wait if out if possible, if not, have those involved buy back her share. IMHO.

[DaisysMom]

TY all so much for taking the time to research this for me. I haven't filed yet and will bring this up with my attorney when I meet with him to do the filing. And of course......another question. LOL I am also listed as a survivor on the title for her vehicle and the title for her manufactured home. I wonder if those could just be transferred to my sister. Lots of things to get straight before I file, I guess. And I gotta hurry, I have a court summons for some CC debt that has to be answered by Feb.28th. Seems like everything is happening at once. Thank you all for your help...makes it easier.

DM

[tobee43]

hurry! and i hope you read through the "lines" and do what is best for you

[LadyInTheRed]

TY all so much for taking the time to research this for me. I haven't filed yet and will bring this up with my attorney when I meet with him to do the filing.

If your attorney is going to working on your BK petition before the meeting, you need to let him know about this issue right away instead of waiting until the meeting.

And of course......another question. LOL I am also listed as a survivor on the title for her vehicle and the title for her manufactured home. I wonder if those could just be transferred to my sister.

It's the same issue as with real estate. If the title to a vehicle has a transfer on death designation under ORC 2131.13, your mother can replace you with your sister. But, if you are joint owner with right of survivorship under ORC 2131.12, you have a current ownership interest in the car and transferring that to your sister would be a fraudulent transfer unless she pays you fair market value. Note that a manufactured home is a "motor vehicle" as defined in ORC 4505.01

Lots of things to get straight before I file, I guess. And I gotta hurry, I have a court summons for some CC debt that has to be answered by Feb.28th. Seems like everything is happening at once. Thank you all for your help...makes it easier.

DM

Glad to be of help. Things will hopefully calm down a bit once you get your petition filed. The urgency is more reason to bring this all to the attention of your attorney as soon as possible.

[LadyInTheRed]

ahhhhh yes, however, i have seen many take back an asset in a blink of eye. great answer, and in some states it's 2 years.

I knew there was a 2 year issue but wasn't sure where that came up. That's why I said "at least one year". The one year is the federal bankruptcy law.

even i; may hire your ROFL!!!

LOL! Sorry, I only work for attorneys. Trying to avoid prosecution for the unauthorized practice of law. Thanks for the compliment! Sometimes I think I have too much fun with this stuff.

[tobee43]

LOL! Sorry, I only work for attorneys. Trying to avoid prosecution for the unauthorized practice of law. Thanks for the compliment! Sometimes I think I have too much fun with this stuff.

well here in florida we are allowed to practice on a limited basis without one. (something i wouldn't NEVER ever do) but you should see how many do certain types of work without atty's here. would never fly in nj, that's for certain. also, i do work for some HOA's and some other types of situation on my own...very limited tho!

come on you don't want to be prosecuted for unlawful practice of the law, i wonder why? LOL!!!

it's good and stimulating to the mind to have great discussions and get opinions , when one loves the law, it really is "fun".

[DaisysMom]

OK....I went to my Mom and looked at the titles. I am listed as TOD (transfer on death) on the title with a notorized beneficiary page atttached that has my name and SS# on it. I took all to my attorney to show him and he said that it should not be a problem if my mother changes it to my sibling because she has the right to change her beneficiaries as she wants. I also found out that there are no deeds that have my name listed on them, I was mistaken about that. So that is one prob I don't have to worry about, and I'm sorry you all took so much time to help me with that when it really wasn't needed.

But anyways.....looks like I am good to go and will be filing within the week. Hope it goes as easy has my attorney has predicted it would.

Thank you all again. DM