Use a living trust to leave real estate to minors
Attorney Tom Olsen: Libby, you're on WDBO, go ahead.
Libby: Hi, thank you so much for taking my call. I have actually recommended you to several people and they're very happy with your service -
Tom: Thank you.
Libby: - but I've never used you before, but I have a question. [chuckles]
Tom: All right.
Attorney Chris Merrill: Thank you, Libby.
Libby: Okay. I'm a widow for eight years now. I have one son. I've had my home quitclaim deed for about over two decades now, it's in my name and everything. It's a quitclaim deed. Now, my question is, I'm very interested in getting a ladybird deed to avoid probate and to transfer it to my son and my two grandchildren. Also, a two-part question, do I have to transfer it from a quitclaim deed to warranty deed in order to do the ladybird deed thing? I'm confused, if you understand the question.
Tom: How old are your grandchildren?
Libby: I knew you were going to ask that, and I think they're 14 and 12. [chuckles]
Tom: Okay. First of all, the fact that you took title via a quitclaim deed makes no difference whatsoever. Quitclaim deed, warranty deed, special deed, all of them do the same thing, and that is to place a title to the property in your name only, Libby. Don't worry. The quitclaim deed I'm sure is just fine. Number two, you can't leave real estate to young kids, and actually, let's just say minors. Anybody under the age of 18, you cannot leave them title to a piece of real estate.
Libby, either you need to get back to the basics and leave this home simply to your son with the understanding that your son is going to take care of his own kids, or if you said, "Tom, absolutely positively, I want my grandkids to share the home that I live in," we would need to be using a living trust for you Libby so that their share of this real estate will be held in this trust until they reach typically age 25. Libby, either way, we'd be pleased to assist you.
Libby: Okay, well, thank you so much, that explains a lot.
Tom: Okay, Libby, thank you for referring people to us, we appreciate it very much. We're always [crosstalk] --
Libby: Thank you, have a great day, and hello to the lady, I forgot her name.
Chrissy: It's okay, Happy New Year, Libby. It's Chrissy, and thank you so much.
Libby: Okay, Chrissy, thank you so much, and happy New Year to you, and thank you. I love the show.
Chrissy: Thank you.
Tom: Thank you.
Libby: Have a great day.
Tom: Chrissy, I had something happened to us last couple of weeks ago that's never happened to me before.
Chrissy: What's that?
Tom: Well, we're doing a probate, and of course, we're all about helping people to avoid probate, but this was a non-client that passed away that we're having to do a probate for. One of the beneficiaries of this probate estate is a minor under the age of 18. Normally, we might normally place the title in the name of the minor. Putting a real estate title in the name of a minor is easy, but remember, it's stuck there until that minor becomes an adult. That's why we don't want to do it.
Chrissy: Exactly.
Tom: If you put the title in the name of a 12-year-old, the 12-year-old cannot convey it out until the 12-year-old reaches the age of 18.
Chrissy: Exactly.
Tom: If we have to, we have to, it's not a good idea, but there was no other choice in this situation. Well, our new probate judge, she says, "Okay, you're going to do this, you're going to have to create a legal guardianship for this minor 12-year-old." Folks, creating a guardianship for somebody, whether they're 12 or 82, is a big, big, big expensive deal. If somebody says, "Oh, just go get a guardianship." Well, six months and $6,000 maybe.
Chrissy: I think more like 10 now.
Tom: Yes. Boy, what a shocker on that that the judge was going to require that. They never had before, but in this situation, they are.
Chrissy: I believe that, for whatever reason, on their end, they are going in that direction because I don't know that I shared with you that a probate that I have going on, the judge required the same thing because there are two teenage children involved, and a home, probating a home, and the judge is requiring guardianship.
Tom: Oh boy. Man, if you've got young kids or you got grandkids or minor nieces and nephews you want to include in your estate, man, that's all the more reason to get your proper estate planning done and leave it to them via a living trust,-
Chrissy: Correct.
Tom: - not a will.
Chrissy: Correct, because if you do it via the trust, then you would not have to do the guardianship, but if it's within a will, then I guess it seems like the trend that you could maybe expect that now any property, any real estate that would be leave to a minor in a last will and testament, very likely the probate judge will require a guardianship.
Tom: Yes, and again, expensive and-
Chrissy: Time consuming.
Tom: -takes a long time.
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