Estate Planning and Trusts Blog

Tax Implications of a Medicaid Personal Service Contract

personal services contract income is taxable
The money you received from that personal services contract you signed has to be reported to the IRS.

Personal services contracts are very popular in long-term care planning – especially when Medicaid benefits are sought. But they may not be the best solution.

Long-term care in a nursing home (also called a rehabilitation center) is expensive. Many people who are receiving or will be receiving long-term care have little in savings and face impending impoverishment. Medicaid rules allow certain planning measures that may preserve some of the applicant’s assets for his or her family.

One of these measures is known as a personal service or lifetime care contract. This legal contract specifies the compensation a family member will receive in return for providing lifetime personal care and oversight of professional care for the nursing home resident. The Medicaid rules and the family situation will dictate how much compensation can be paid.

In most states, the caretaker is paid in installments as the care is provided. But, in Florida, the caretaker can receive the compensation as a lump sum payment. The caretaker receives the compensation up front, but is legally obligated to provide care for as long as the nursing home resident is alive.

This lump sum payment is considered compensation by the IRS and is taxable income to the caretaker when received.

I’m going to repeat that because it’s so important:

This lump sum payment is considered compensation by the IRS and is taxable income to the caretaker when received.

The Internal Revenue Code § 61 defines gross income as “…all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items…”

Some people think that just because they don’t receive a 1099 or W-2 for certain income, they don’t have to report it on their tax return. Wrong! Just because the IRS may not be notified of the payment doesn’t mean it doesn’t have to be reported. All income – even illegal income – must be reported or you’re committing tax fraud.

If you’ll be receiving compensation due to a personal service contract, be sure to talk to your tax professional before signing the contract because the tax consequences of receiving a lump sum payment may be more detrimental to you than it is beneficial to the potential Medicaid applicant. An Elder Law attorney may be able to provide your family with other alternatives.

Other articles you may find interesting:

Hearing Aids May Save Your Brain

How Joint Tenancy Creates Problem for Seniors

To Probate or Not to Probate?

Probate
Whether you die with a Will, a trust, or neither, some sort of estate administration is almost always needed.

Everyone dies with one of three estate plans. Some die with a Last Will and Testament (Will), others die with a fully funded revocable living trust (RLT), while still others die with neither a Will nor a RLT. The purpose of this brief article is to introduce each of these three estate planning approaches – not to serve as an in-depth treatise on the benefits and drawbacks of each.

Will-Based Planning

When a loved one dies, you need to go through his or her papers as soon as possible to look for a Will. Why? This traditional estate planning legal document often contains critical instructions regarding any “final wishes” of the decedent. For example, some people include funeral and burial instructions in their Wills. Time is of the essence when it comes to those decisions.

Assuming that you’ve found the Will, the first thing you should do is read it and determine who is appointed as its executor/personal representative. If you are the executor, you need to know who the beneficiaries of the Will are, what they are to receive, and when. You also need to determine whether the Will identifies anyone else as a co-executor. For example, a parent might name her two adult children as co-executors of her Will. All co-executors must be involved in the probate process unless they formally decline the appointment. Read the Will to see if it creates any “testamentary trusts” to administer the inheritance. Parents often provide that the inheritance of a minor child shall be held in trust and distributed according to its terms, instead of being distributed outright in a lump sum.

Without delay, contact the attorney who prepared the Will. That attorney is likely the person who knows the “testamentary intent” of the decedent, along with the nature and location of all estate assets.

Proving the Will

The first responsibility of the probate court is to “prove” the Will. In other words, is the Will presented truly the “Last Will” and not the “second to the last Will”? If the judge determines that the Will presented is the “Last Will” and is otherwise legal in all technical respects, the judge will issue “letters testamentary” or “letters of administration,” giving you legal authority to act as executor on behalf of the estate. You can use this key document when dealing with the decedent’s banks, brokerage firms and insurance companies, and fulfilling the many responsibilities that come with being the executor of the estate.

Probate Administration

With a valid Will and letters of administration in hand, the duties of the executor regarding probate administration may vary from state to state, but generally the executor follows these fundamental steps:

  • Collects, protects, values and insures (if needed) the assets of the estate,
  • Files an inventory with the court listing the assets subject to probate,
  • Provides actual notice to known creditors and notice by publication to potential creditors,
  • Pays the final expenses, taxes and legitimate debts of the decedent,
  • Files appropriate state and federal tax returns for the decedent and the estate,
  • Distributes the assets according to the Will (with the approval of the judge, if needed),
  • Follows any additional specific instructions under the Will (with the approval of the judge, if needed), and
  • Closes the estate and receives formal discharge by the probate judge.
  • Note: the executor is often appointed to serve as the trustee for any “testamentary trusts” created over the inheritance. While your services as executor may end with the closing of probate, it may only be beginning, if appointed as trustee.

Revocable Trust-based Planning

If the decedent left a trust agreement, the estate will be distributed according to the terms of the trust document, with little if any involvement by the probate court. In many states, the trust agreement itself is not filed with the court unless there’s a contest or dispute. As a result, there’s no need for the court to declare whether the trust agreement is valid and appoint a trustee. This lack of probate is one of the chief advantages of a RLT-based estate plan. However, probate would still be necessary to approve of any guardian nominated to serve as the backup parent for an orphaned minor child.

In contrast to probate administration under the supervision of an impartial judge, the trustee is responsible for the complete stewardship over the trust assets and fulfilling its terms. This responsibility includes paying final expenses, taxes and legitimate debts of the decedent, managing assets, paying the debts and expenses, filing the tax returns and distributing the trust assets according to the terms of the trust agreement. As with a “testamentary trust” created under a Will, these distributions may be made in an immediate lump sum, staggered over years, or continue over multiple generations.

No Will or Trust

Every state has “intestate succession” laws governing what happens when a person dies without a valid Will or RLT. As described above, it’s even possible to have a Will declared invalid, resulting in the estate going through intestacy. One of the greatest drawbacks to “dying intestate” is the complete lack of input that the decedent has when it comes to who serves as executor and how the inheritance is distributed. For example, in many states, if the decedent was married and had minor children, then the surviving spouse doesn’t inherit the entire estate. The surviving spouse may be responsible for managing the share allotted to the children until each child reaches age 18. Upon reaching that age, the inheritance for each child must be paid over in one lump sum, even if the child has special needs or suffers from addictions.

Your life, loved ones, and estate are all unique. In turn, your estate planning should reflect your goals to protect everyone you love and everything you have.

Other articles you may find interesting:

Blended Families Need More Thoughtful Estate Plans

The Funeral Rule

Have an IRA? The CARES Act of 2020 Impacts You

CARES Act of 2020
The CARES Act of 2020 will affect nearly everyone’s retirement and estate planning.

The CARES (Coronavirus Aid, Relief, and Economic Security) Act of 2020 was signed into law by the President on March 27th. Several provisions of the legislation impact IRA and employer-retirement plans.

This is just a high-level overview of just a few of these provisions; be sure to contact your financial advisor to see if changes need to be made to your retirement-plan strategy.

If you were expecting to take Required Minimum Distributions (RMDs) from IRAs or employer retirement plans in 2020, this year’s RMDs are now waived. This is a permanent waiver, not just a deferral. This waiver also applies to beneficiaries of inherited IRAs, Roth IRAs, and employer retirement plans.

Any remaining 2019 RMDs having a required beginning date of April 1, 2020 and not withdrawn by January 1, 2020 are also waived.

Already take a RMD you don’t need? You may be able to reverse it through what is known as an indirect rollover. Distributions taken from an IRA can be returned to the same IRA if 1) the money is returned within 60 days and 2) there must not have been an IRA-to-IRA or Roth IRA-to-Roth IRA transfer within the 12 months preceding the distribution. However, beneficiaries are not able to reverse an RMD from an inherited IRA or employer retirement plan.

If you need to withdraw money from your IRA and you’re under 59 1/2, Coronavirus-related distributions (CRDs) up to $100,000 from IRA or employer plans will be exempt from the 10% early withdrawal penalty that would normally apply. Individuals who meet the requirements for being affected by the coronavirus are eligible.

These CRDs would still be taxable to the account owner, but you can pay the tax over a three-year period.

To avoid taxation, CRDs can be repaid to an eligible retirement plan or IRA and treated as having satisfied the 60-day rollover requirements if repaid during the three-year period beginning the day after the CRD was received.

The Treasury has extended the tax return filing date to July 15, 2020, from April 15, 2020, so the date for making 2019 IRA and Roth IRA contributions is also extended to the same date. Normally, IRA contributions for a prior year must be made by April 15th of the following year.

The extended contribution deadline also applies to 2019 Health Savings Account, Archer Medical Savings Account, and Coverdell Education Savings Account (ESA) contributions.

And finally, beginning with 2020 income tax returns, you’ll be able to take a $300 above-the-line charitable income tax deduction – even if you take the standard deduction.

Again, this is just a high-level view of some of the many provisions of the CARES Act. Be sure to contact your financial advisor and tax professional to find out how they may apply to your situation.

Other articles you may find interesting:

Can I Deduct Long-Term Care Expenses on My Tax Return?

How Does the IRS Know if I Gift My Grandchildren Money?

Can Multi-Generational Living Arrangements Work for Families?

Multigenerational living arrangements
Multigenerational living arrangements can be a gift for the entire family if careful planning is done.

Multi-generational living arrangements are not new, and as people are living longer it may start becoming more common. Shared households bring many benefits, including convenience. Why should a nurse daughter travel 20 miles a day to take her mom’s blood pressure, asks The Mercury’s article “Do shared living arrangements make sense?”

There’s also the benefit of increased financial security. Two households merged into one can share expenses, including mortgages, property taxes, utilities and more.

Whether this works in each case depends upon the situation and the relationships of the individuals involved. If there is flexibility and relationships are good, it can be a blessing. Imagine grandparents and grandchildren who are part of each other’s lives on a daily basis, rather than a twice-a-year visit. That’s a gift.

Multi-generational living arrangements need to start with a lot of discussions and good understanding of the wants and needs of each participant. It also needs to be based on reasonable expectations. A happy joint living arrangement can swiftly be derailed if parents assume that grandparents are willing to be 24/7 babysitters, or if grandparents consider household chores something for their children and grandchildren to do.

Joint living arrangements must also address financial considerations, estate planning, and everyone’s personal experiences and convictions. What works for one family may not work at all for another. Each family must work through their own details.

Here are some examples where a multi-generational living arrangement works.

Parents and children buy a house together. When parents and children live too far away, and the parent’s house would require too much modification for them to continue to live there, both sell their homes and buy a much bigger home that can be made handicapped accessible. The parents make most of the down payment. The house is titled in joint names. Titling is critical. One half is owned by the father and mother, the other half is owned by the spouse and adult child. Each half would be tenants by entireties (in states where that form of ownership between spouses is available) as between the spouses, but joint tenants with rights of survivorship as to the whole.

Parent moves in with adult child. A widow or widower comes to live with a son or daughter and their family. The parent makes contributions to the monthly expenses. A written agreement is very important for Medicaid rules regarding gifting. If modifications need to be made to the house—a mother-in-law suite, for example—a written agreement would detail who contributed what so that it is not considered a “gift” by Medicaid.

Adult child moves in with parent. This is a “buy-in,” where an adult child obtains a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value.

None of these strategies should be done without the help of an elder law attorney who is knowledgeable about Medicaid, estate planning, tax planning, and real estate ownership. When it works, this multi-generational living arrangement can benefit everyone in the family.

Reference: The Mercury (AuG. 28, 2019) “Do shared living arrangements make sense?”

Other articles you may find interesting: 

Medical Marijuana & Guns: Legal Advice from a Doctor?

Can I Deduct Long-Term Care Expenses on My Tax Return?

How Joint Tenancy Creates Problem for Seniors

Joint tenancy
Joint tenancy may hold hidden dangers.

Parents adding children or other family members as joint tenants (joint owners) on their assets is an example of an overly simple “solution” to a complex problem. It doesn’t work, even though it seems as if it should.

As explained in the article “Beware the joint tenancy trap” from Monterey Herald, putting another person on an account, even a trusted child or life-long friend, can create serious problems for the individual, their estate, and their heirs. Before going down that path, there are several issues to consider.

When another individual is placed as an owner on an account or on the title to real property, they have a legal ownership in that property equal to that of the original owner. This is called joint tenancy. If a child is made a joint tenant on a parent’s accounts, they would be entirely within their rights to withdraw every single asset from those accounts and do whatever they wanted with them. They would not need the original owner’s consent, counsel, or knowledge.

Giving anyone that power is a serious decision.

Making a child a joint owner of assets also exposes those assets to claims by the child’s creditors. If either owner files for bankruptcy, the other owner may have to buy back one-half of the asset at its current market value. Or, if the child goes through a divorce, his portion may end up with your ex-daughter-in-law. Another example: if the child is in an accident and a judgment is recorded against the child, you may have to buy back one-half of your joint tenant property at its current market value to settle the claims.

There are other complications. If one joint owner of the asset dies, joint tenancy usually provides for the right of survivorship. The property transfers to the surviving joint tenant without going through probate and with no reference to a Will – which is what people focus on when they use this method as an end-run around true estate planning. What they don’t realize is that if the parent dies and the asset transfers directly to the joint tenant—let’s say a daughter—but the Will says the assets are to be split between all of the children, her claim on the asset is “senior” to the rest of the children. That means she gets the joint asset and the four siblings split any remaining assets that don’t have joint owners or beneficiaries.

If there is any friction between siblings, not having equal inheritances could create a fracture in the family that can’t easily be resolved.

Income tax exposure is another risk of joint tenancy. When someone is named a joint owner, they have an equal ownership interest in those assets, at the original owner’s cost basis. When one owner dies, the remaining owner gets a step up in basis on the proportion of the assets the deceased person owned at death.

Let’s say a father adds his son as a joint owner on his home when its fair market value is $300,000. Dad’s cost basis (what he’s invested) is $250,000.When Dad dies, the fair market value is $350,000. At his death, the son gets a step up in basis on one-half of the assets—the assets that the father owned ($175,000). His half of the assets retains the original basis ($125,000). So his cost basis in the house is $300,000. If he sells it for $350,000, he’ll pay capital gains taxes on $50,000. But if the house was owned solely by the father, the son would get the full step up in basis on the father’s death ($350,000), and if it sold for that price, would have no capital gains taxes due.

Additionally, adding a joint owner to any asset will adversely affect both joint owners’ qualification for needs-based government benefits, such as Medicaid for nursing home costs.

Given the complexities that joint tenancy creates, parents need to think very carefully before putting children’s names on their assets and real property. A better plan is to make an appointment to speak with an estate planning attorney and find out how to protect the parent’s assets through other means, which may include trusts and other estate planning tools.

Reference: Monterey Herald (Sep. 11, 2019) “Beware the joint tenancy trap”

Other articles you may find interesting:

What Should I Know About Reverse Mortgages?

State Taxes on Retirees Differ by Type of Retirement Income

 

Should I Buy Mortgage Protection Life Insurance?

Mortgage protection life insurance
Mortgage protection life insurance may not be your best option.

Mortgage protection life insurance (MPI) offers are often disguised as official and formal requests from mortgage lenders, with convincing details, such as the lender’s and borrower’s names, the loan type, and the amount owed. In bold lettering, these documents lead with shocking headlines like:

IMPORTANT NOTICE! PLEASE COMPLETE AND RETURN!

FINAL NOTICE! MORTGAGE PROTECTION CARD!

NOTICE OF OFFERING! MORTGAGE FREE HOME PROTECTION!

Investopedia’s recent article entitled “Why You Don’t Need Mortgage Protection Life Insurance” explains that these declarations are then followed by scare tactic statements such as, “If you died tomorrow, would your family be able to continue paying the mortgage and maintain their quality of life?”

They then explain why their program will protect your family, after a death, by paying off the mortgage.

However, mortgage protection life insurance policies are generally not worthwhile. Here are several reasons why:

  • No flexibility: With regular term life insurance, beneficiaries may use insurance payouts as they see fit, but many MPIs send benefit payments directly to lenders and the beneficiaries never see any money.
  • Large premiums: Even if you’re a healthy person who has never smoked tobacco, MPI is usually more expensive than term life insurance.
  • No transparency: It’s hard to get a quote for MPI online—a major concern, since mortgage MPI prices can vary widely.
  • Fluctuating premiums: MPI premiums may only be fixed for the first five years, then they could spike.

There are some MPI policies that do offer policies with fixed premiums for the policy’s duration, but in many instances, the payout on these policies may decrease over time as potential payouts are lowered. This type of MPI life insurance—also called “decreasing term insurance”—is designed to pay off your mortgage balance, while each month your beneficiary pays down part of your mortgage principal.  The MPI policy’s potential payout, therefore, shrinks with every mortgage payment.

However, some newer MPI policies have a feature known as a “level death benefit.” These policies’ payouts don’t go down. Some MPI policies will also return your premiums, if you never file a claim after you pay off your mortgage. However, the returned premiums will probably be worth far less because of inflation. You will also have likely forfeited the opportunity to invest any money you would’ve saved, if you’d bought less expensive term life insurance.

An MPI policy may be a good idea for those who don’t qualify for term life insurance due to poor current health, because MPI is typically sold without underwriting.

Keep in mind that MPI is totally different from private mortgage insurance (PMI), which protects your lenders, not you. If you make a down payment of less than 20% on your home, you pay monthly premiums to a PMI policy that will pay your lender, in case you default. However, if you die, your heirs must keep making mortgage payments, and PMI only kicks in if family members default.

Reference: Investopedia  (June 25, 2019) “Why You Don’t Need Mortgage Protection Life Insurance”

Other articles you may find interesting: 

Beware of Recorded Deed Scam

What’s the Difference Between Whole Life and Universal Life Insurance?

What are Walt Disney’s Heirs Worth?

Walt Disney World
Walt Disney’s heirs may have more money than Scrooge McDuck, but it hasn’t bought them a fairy tale life.

It’s not known just how much Walt Disney’s heirs are worth. GOBankingRates estimated the company’s net worth to be roughly $130 billion. Roy O.’s grandson, Roy P., said at one point that the family owns less than 3% of the company. Even so, that would put their fortune around $3.9 billion (not counting any investments in addition to Disney holdings).

Wealth Advisor’s recent article entitled “Disney Family Feud As Heirs Battle For $400 Million Trust Fund” says that in 1925, Walt married Lillian Bounds, a studio inker. Eight years later, she gave birth to Diane, and the couple later adopted their daughter Sharon as a baby.

Walt is said to have adored his 10 grandchildren. When he died in 1966 of lung cancer, he left numerous trusts and family foundations for his family.

Walt’s younger daughter, Sharon, adopted one child, Victoria, with her first husband, Robert Brown. She then had twins, Brad and Michelle, with her second husband, Bill Lund. She died from breast cancer in 1993 at age 56. Michelle has never had a job and owns three homes, spending a lot of time in Newport Beach, CA according to Gardner.

Victoria reportedly lived an extravagant lifestyle that included $5,000-a-night suites at the Royal Palms in Las Vegas. One report notes that she once went on a Disney cruise ship and destroyed her suite to such a degree that Michael Eisner, then-CEO of the company, had to ask the trustees to pay for the damages. Her share of the family fortune was added to Brad’s and Michelle’s after she died in 2002 from health complications. However, Sharon’s twins later became embattled in a years-long feud over their $400 million trust fund. That inheritance was supposed to be distributed in annual payments and lump sums at five-year intervals at ages 35, 40, and 45. However, the trustees dispersed the payments to Michelle and withheld Brad’s.

Michelle and the trustees argued that Brad wasn’t able to take care of his share because of a “chronic cognitive disability” and that Bill, their father, was taking advantage of this to gain money, according to NBC News.

Bill said that the trustees were manipulating his daughter Michelle. Bill was previously a trustee but resigned after an allegation that he used trust money to gain more than $3 million in kickbacks from a real-estate deal. He reportedly agreed to an annual settlement of $500,000.

Moral of the story? Money can’t buy happy families. Enjoy yours while you’re alive, and protect them when you’re not.

Reference: Wealth Advisor (Feb. 11, 2020) “Disney Family Feud As Heirs Battle For $400 Million Trust Fund”

Other articles you may find interesting: 

‘Bye Bye Love’ Rocker Ric Ocasek Cuts Wife Out of Will

How Will Jeffrey Epstein’s Estate Be Settled?

Including Cryptocurrency in Your Estate Plan

Bitcoin app on phone
Cryptocurrency accounts rely on a sophisticated private key; someone you trust needs to have access to that key when you become incapacitated or die.

If you own any cryptocurrency, such as Bitcoin, you need to take some additional steps to make sure it can be accessed if you become incapacitated or die. This article explains that cryptocurrency is currently treated under probate law as an asset – like your house – and not as currency. Unlike a bank account or your house, there’s no physical record  – it’s all digital and can only be accessed via a computer. If someone doesn’t have your key (a sophisticated private passcode), your digital wallet cannot be accessed and the money is gone forever.

Be sure to mention your cryptocurrency in your Durable Power of Attorney, Will, or Revocable Living Trust. But don’t put your key in the documents – just provide instructions on where to find the document that describes in detail how to find and access your cryptocurrency.

Digital assets are a big part of our lives now, and should be included in everyone’s estate plan.

Reference: https://www.elderlawanswers.com/how-to-include-cryptocurrency-in-an-estate-plan-17604

Other articles you may find interesting:

What Is Probate and How to Prepare for It

How Caregivers Can Prepare Before the Crisis

Medical Marijuana & Guns: Legal Advice from a Doctor?

Medical marijuana doctor
Why would you rely on medical marijuana doctors for legal advice regarding gun laws?

I’m not a doctor, but I’ve watched lots of Grey’s Anatomy. Would you trust me to give you sound medical advice or write you a prescription? Probably not. But apparently some doctors think they’re qualified to give legal advice.

Maybe they binge-watched Law and Order or stayed at a Holiday Inn Express. I don’t know. But, sadly, people will rely on their bad legal advice – just because they’re doctors. And perhaps also because it’s what they want to hear.

I’ve written several articles about guns and marijuana, so my professional curiosity made me read this article. From the first sentence, I could tell it was heavily biased – marijuana is the Holy Grail, Hallelujah! That was fine – I personally don’t care about pot one way or the other. But it made me quickly scroll to the bottom to see who wrote the article… a medical marijuana doctor. Hmm.

The part of the article that made the hairs on my neck stand up was this:

Many people wanting medical marijuana avoid it because they fear they might not be able to own guns. This is not true. You can own guns and in fact have a concealed carry permit in Florida and have a medical marijuana card, no problem.

As an actual Florida lawyer who takes an avid interest in gun law, I can tell you that the last sentence is legally false.

I’ve written and presented about this over and over again, but people who have a vested interest in peddling pot keep telling the same lies to people who want to believe those lies.

I’ll break it down very simply:

  1. Federal laws trump state laws when it comes to drugs. Under federal law, marijuana of any kind is a Schedule I drug – totally illegal. Florida and some other states have chosen to look the other way within their borders, but that doesn’t change the federal law.
  2. Federal laws trump state laws when it comes to guns. Under federal law (18 U.S.C. § 922(g)(3)), you cannot possess a gun if you are a user of an illegal drug (pot, heroin, meth, crack, etc.) – or an abuser or illegal user of a legal drug (taking your spouse’s prescription meds, abusing prescription opioids, etc.). A federally-licensed gun dealer makes you swear on a form that you don’t do any of that, and even private sellers cannot legally sell to anyone they suspect may fall into any of those or other prohibited categories. States can be more restrictive, but they can’t override the federal gun laws. You must comply with all the federal gun laws first, and then comply with the state gun laws.
  3. Florida’s concealed carry licensing statute specifically states in Fla. Stat. 790.06(2)(n) that you can’t get a concealed carry license if you’re prohibited from owning guns under any federal law. Logically, that would also mean that you cannot keep your concealed carry license and carry a gun (you could carry a concealed knife) – if you use medical or recreational pot.

Bottom line? If you choose to use medical or recreational marijuana, you’re prohibited from possessing guns under federal law. And having a concealed carry license for something you’re not allowed to have makes no sense.

Will you get caught? Who knows. We weigh that risk every time we choose to break any law. But keep in mind that the penalties are steep – they’re felonies. And yes, I realize that our own Dept. of Agriculture Commissioner is flagrantly breaking state and federal laws by telling medical marijuana users that they can have a concealed carry license. But that doesn’t make it legal.

Remember…when seeking medical advice, ask a doctor. When seeking legal advice, ask a lawyer. And also remember that Google is neither.

Reference: https://www.chronicleonline.com/opinion/columnists/medical-marijuana-not-perfect-yet/article_c7eca818-57ec-11ea-9311-4b53009597de.html

Other articles you may find interesting:

Medical Marijuana and Gun Laws: One Toke Over the Line

Choose: Concealed Carry License or Medical Marijuana Card

You Can’t Have Your THC-Infused Cupcake and Eat it Too

Beware of Recorded Deed Scam

Recorded deed scamMy husband and I recently executed a deed to transfer a piece of real estate to our revocable living trust, and today we received the notice you see in the photo. We had a good laugh – this wasn’t our first rodeo, so we knew it was a scam – but then I realized many people wouldn’t recognize it as a scam.

The letter looks pretty official – it has the correct names, property address, parcel identification number, and description of the property. Even though it states that they’re not associated with any governmental agency, people tend to overlook that. I get phone calls quite frequently from clients wondering whether they should send this company (or others like it) $95 for a copy of their deed and a copy of the Property Assessment Profile Report. I assure them they should NOT send anyone any money for those things.

First, if you signed your deed in a Florida attorney’s office, he or she should have mailed you the original signed deed after it was recorded (I do). So, you likely already have the original recorded deed somewhere in your papers.

Second, if you can’t find a copy of your deed, you can go online to the appropriate county’s Official Records (sometimes called Public Records) website, type in your name, find your deed (note: very old deeds may not be viewable online), and download or print an unofficial copy which shows when it was recorded. It’s free in most Florida counties. Here’s a link to Sarasota’s Official Records search.

If your deed is too old to be viewed online, or you actually need a certified copy of your recorded deed for some reason, then jot down the Book and Page number (usually in xxxx/xx format) or Instrument Number you found in the Official Records and contact your county clerk’s recording office to find out how to get a photocopy or a certified copy – generally for under $5.00.

Third, all the other information they want you to pay for is free on your Florida county’s Property Appraiser’s website. Here’s a link to Sarasota’s.

So, don’t be fooled by these scammers. Whenever you get something you’re not expecting, READ IT CAREFULLY. If you’re still not sure, and you’re one of my clients, call me. I’ll let you know if it’s legit or not.

Other articles you may find interesting:

Why are Seniors So Vulnerable to Scammers?

IRS Scams: What You Need to Know