People frequently want to transfer all or part of their accounts or real estate to their children relatives, or others. Generally they wish to plan for Medicaid benefits, avoid probate, or avoid taxes. Often, such transfers are mistakes. We frequently hear from people who want to reverse a transfer, only to find out it is not so easy to do
If you tell an employee of a bank that you want to add a name to an account, there are a few ways to accomplish that. If you only want the person to assist you if you need help, they should suggest that you add the person as an agent under a power of attorney. Often, the banker will add the person as a joint owner. This means the person actually owns part of the account, and that it passes to the person on your death. It also means if the person gets sued or doesn’t pay their taxes, you might lose all or part of your account. Sometimes the account will be set up as one name and the other name or “In Trust For (ITF)” the name of the person being added. Placing “and” between the names means neither owner can remove the other without the other’s consent. Adding somebody with the acronym “ITF” means that person who was added now really owns the account and the original owner is only a trustee.
Adding a person’s name to the title of real estate is much more risky. The only way to reverse such a transfer is to have the person sign a new deed returning the property.
Besides the fact that one has given something away in these circumstances, and may not be able to get it back, there are tax ramifications involved in transferring property while the original owner is alive, and if the original owner ends up in a nursing home within five years, he or she may be ineligible for Medicaid.
Be very careful in making gifts without knowing all the potential consequences.
Attorney Michael A. Pyle, of Pyle, Dellinger & Duz, PLLC, 1655 North Clyde Morris Blvd., Suite 1, Daytona Beach, Florida, 32117 Telephone: 386. 615.9007. E-mail: mikep@pylelegal. com or website: www.pylelegal.com