12/11/2023 0 Comments Caption definition for kidsTo avoid that potential mess, Cohen says she would put her home in a Medicaid asset protection trust - designed to protect assets from being counted for Medicaid eligibility - and, again, name her kids as the beneficiaries of that trust. That's because when a Medicaid beneficiary dies, the value of their estate - including property, savings and retirement accounts - can be used to repay the government for the costs of nursing facility services, home and community-based services and related hospital and prescription drug services. She adds that, due to Medicaid recovery, she'd never put her home in her children's names. “You will have caused them to pay more in capital gains taxes than they would have needed to if they would have inherited that property at your death,” says Cohen. When you die and your children want to eventually sell your home, if you've signed it over to them, they'll lose the option of a step-up in basis - where the value of your property is adjusted from its initial cost basis to its current market value upon your death. There's another reason to avoid this approach. If your property has appreciated, now your property will get reassessed at that date and you may need to pay more property taxes.” She explains why in another video: “If you add your child’s name to your property at some point during your life, the first thing that may happen is a property tax reassessment. The California-based attorney says she'd never add her children’s names to the deed of her primary residence as a way to avoid probate court. Read more: Here are 7 amazing 1-week vacations you can do for around $1,000 Transfer property wisely “Trusts are for the middle class, too,” she states in the caption of her April TikTok video, which has been viewed more than two million times and racked up over 2,800 comments. One of the most common misconceptions is that you need to have a lot of money to set up a trust - but that's “simply not true,” says Cohen. You’ll have to name a “successor trustee” - which can be a family member, friend, a private fiduciary or even a bank - who can take over managing your assets in case of reduced mental faculties or death. The word “revocable” means the trust can be undone or changed. Instead, the lawyer says she'd put everything - including her life insurance and bank accounts - in a living trust, or revocable living trust, and she'd name her kids as the beneficiaries of that trust.Ī living trust allows you to manage your assets in your own name for as long as you’re able. “I would never leave anything to my kids when I die,” Cohen says in a hard hitter right off the bat. She also shares the one thing you should do to protect your heirs and set them up for success when you’re gone. The attorney - who raises awareness about money management, wills and trusts on TikTok - went viral for her video: "Six things as a money protection attorney I would never do." Here's how much the typical baby boomer has saved for retirement - how do you stack up? Here are the 2 simple techniques that made Ronald Read rich - and can do the same for youĪ 50-year-old Mom on Reddit emptied her daughter's college fund to keep her Malibu dream house - the teen is 'furious.' 4 tips to retire comfortably without raiding your kid's account This janitor in Vermont built an $8M fortune without anyone around him knowing. Instead, you can save your loved ones from serious financial (and legal) woes by creating a living trust and making them beneficiaries, suggests Brittany Cohen, an estate planning and asset protection lawyer. If you love your kids, don’t leave anything to them when you die, says one California-based attorney. This California lawyer warns you should 'never leave anything' to your kids when you die - saying it'll lead to serious financial distress.
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