(Photo Illustration - MetroCreativeConnection - Legal-Ease - Gerald W. Townsend)

Several years ago I helped Mr. Allen set up an estate plan which would (a) protect his wife, Mrs. Allen, who is in failing mental health, and (b) ultimately give his assets equally to his three sons. To do this, we got all of Mr. and Mrs. Allen’s assets into Mr. Allen’s name, so that his estate plan would control what happens to them. Then we created a Supplemental Needs Trust to provide financial support to Mrs. Allen if she outlives him but requires nursing home care, so that the assets in the Supplemental Needs Trust will not make her ineligible for Medicaid’s help paying her nursing home bills, and whatever assets are in the trust when Mrs. Allen dies will go to their three sons. After that, Mr. Allen signed his Last Will and Testament leaving all the rest of his assets directly to their three sons, and signed a Transfer on Death deed giving all of Mr. Allen’s considerable real estate to his three sons.

The Allen clan are old-time West Virginians, who accumulated considerable land over the years. Considering that the land is valuable and has been in the family a long time, Mr. Allen wanted to make sure that it would stay in the family, at least through his children’s generation.

As time passed after creating his original estate plan, it became more and more apparent to Mr. Allen that one of his sons was more interested in the son’s wife’s family and relatives than in his own. On several occasions, after Mr. Allen gave land and other assets to that son, the assets soon wound up in the names of his wife or her relatives.

Mr. and Mrs. Allen’s sons are an interesting group: The eldest son, while not currently married nor likely in the future to remarry is father to one now-adult son (Mr. Allen’s grandson), who himself has two adult children.

The middle son (who favors his wife’s family) has no children. Mr. Allen’s youngest son, a confirmed bachelor, also had no children. As a result, only the oldest son’s son (Mr. Allen’s grandson) is around to carry on the family name and heritage after Mr. and Mrs. Allen and their three children are gone.

Recently, Mr. Allen shared with me his concern that the way things were set up, at his death each of his children would receive one third of the ownership in all of the Allen land, which in itself would be OK, but Mr. Allen did not want his middle son to be able to give his one third of the ownership to his wife’s family, as he wanted the land to remain in the hands of Mr. and Mrs. Allen’s descendants, particularly their only grandson. Mr. Allen was not concerned about his other two sons would do with their shares, figuring that his eldest son would give or leave his 1/3rd of the land to his own son (Mr. Allen’s grandson), and that his youngest son, having no spouse or children of his own, would do likewise.

We did two things to alleviate Mr. Allen’s concern:

1. We replaced the original Transfer on Death Deed with a new one, this time giving to each of Mr. and Mrs. Allen’s sons a “life estate” in one third of the ownership of the land, and, following the death of each son, giving that son’s share (the “remainder” interest) to Mr. Allen’s grandson. That way, Mr. Allen’s sons collectively can enjoy the family’s land while they are living, but ultimately, by Mr. Allen’s arrangement, the land ultimately will belong to his grandson.

2. While the new Transfer on Death should solve his concern, out of an abundance of caution, we added to his Will a similar disposition of the real estate, just in case for some unforeseeable reason the Transfer on Death arrangement were to fail and the land would become part of his probate estate.

Moral of Story: Sometimes things come up that warrant changing what originally looked like perfectly good plans, and, with proper help and guidance, those changes can be accomplished.

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Gerald W. Townsend is a partner in the law firm of Fluharty & Townsend, Parkersburg, West Virginia, with special emphasis upon Medicaid planning to protect assets from nursing home costs. He can be reached at jtownsend@fntlawoffices.com.