What Is the Best Way to Hold Title to Your Home?

There are three common ways in which people hold title to their property: 

1. joint tenancy with the right of survivorship, 
2. tenancy in common, 
3. and tenancy by the entirety. 

Under joint tenancy with the right of survivorship all parties have equal interest. Each has a right to possession of the whole. 

At death, the interest of the decedent passes to the surviving tenant automatically. This is the right of survivorship. This ownership must be created on purpose. There is one deed, equal interest, survivorship must be defined, and there must be four unities: time, title, possession, and interest.

Each tenant has an undivided share in the whole property; is equally responsible for expenses and is equally entitled to rent and profit. The unities are terminated by one co-tenant or more than one tenant. The new owner then becomes a tenant in common.

Under tenancy in common the owners does not necessarily have equal interests. Each unit is inheritable with no right of survivorship. Tenancy in common may accidentally happen by inheritance by more than one heir; through purchase in which shares may and may not be equal; or through failure to specify joint tenancy with right of survivorship. Each tenant has undivided share in the whole property; is equally responsible for expenses and equally entitled to rent and profits. Sale by one co-tenant does not terminate the tenancy in common. The buyer succeeds to interest. Substitution occurs.

And, under tenancy by the entirety, which is created by a deed to the husband and the wife, both have an equal interest in the property and each spouse is entitled to possession of the whole. Upon divorce, the property ownership converts to a tenancy in common. Upon death, interest of the decedent passes automatically to the surviving tenant.

This form of ownership requires the four unities plus the unity of marriage. Each is equally responsible for expenses. Also, only the principal residence can be held in the entirety. One member cannot sell his or her interest. The right of survivorship is not defeated by an attempted sale and divorce converts ownership to tenancy in common.

What is common in each one of these types of ownership is that once the deed is recorded, the names of the parties in each of these forms of ownership are available to the public. If you're concerned about your privacy, you should not consider either of these forms of ownership. Rather you should consider a land trust. Under a land trust, a trustee holds title to the property for the benefit of the beneficiary. The trustee would hold legal title to the property under a deed in trust.

Nevertheless, the beneficiaries have the right of possession of the property, the income generated from the property, the income from the sale of the property, the ease of transferability, and the protection of having the property considered as personal property rather than real property. 

The name(s) of the beneficiaries can be concealed. In my judgment this is the best way to hold title to your property. Not all states have land trusts. But, if you live in Illinois, Florida, Virginia, North Dakota, Indiana, and Hawaii, you should seriously think about it.

Medicare Annual Enrollment Started October 15

The Annual Election Period (AEP) for Medicare recipients is upon us again.

From October 15th to December 7th covered individuals can change their Medicare health plans and prescription drug coverage for the following year to better meet their needs.

During the AEP, you can: 

• change from Original Medicare to a Medicare Advantage Plan; 

• change from Medicare Advantage Plan back to Original Medicare; 

• switch from one Medicare Advantage Plan to another Medicare Advantage Plan; 

• switch from a Medicare Advantage Plan that offers drug coverage to a Medicare Advantage Plan that doesn't offer drug coverage; 

• join a Medicare Prescription Drug Plan; switch from one Medicare drug plan to another Medicare drug plan; 

• or drop your Medicare drug coverage completely.

If you don't take advantage of this Special Election Period (SEP), then you are "locked in" until the next AEP unless you qualify for a SEP which allows you to change plans between the AEP.

Among the circumstances that may qualify you for a SEP are: you move to a new location; you're eligible for Medicaid; you qualify for Extra Help with Medicare prescription costs; you're getting care in an institution (like a skilled nursing facility or long term care hospital); or, you want to switch to a plan with a 5-star overall quality rating.

If you are satisfied with your, Plan you don't have to do anything. You'll simply remain in your existing plan. If you want to change, you'll need to contact the representative for that plan and complete the necessary application forms for enrollment.

If you decide to change, you'll need to: make sure that your primary doctor and your specialists are in the plan and whether they taking new patients who have this plan; know what you will have to pay if you see a doctor outside of the network; look at the limits on your out-of-pocket expenses; and, make sure that your plan includes preventative medicine, such as wellness visits as well as services such as vision, dental, hearing, prescriptions, and transportation. 

For more information, Chicago and Cook County residents, call (773) 614-3201.

How to Protect Yourself as a Non-Profit Organization Board Member

Managing or serving on the board of a nonprofit organization(NPO) remains both a noble and necessary activity. NPOs are often involved in protecting the vulnerable; providing services to those in need; and filling educational gaps for those subject to being mislead by charlatans and thieves to name just a few activities.

Director's and Officer's Liability Risks
However, despite these noble and necessary efforts, NPOs' Directors and Officers(D&O) have liability risks and need to be clear as to what these risks are and what adequate protection consists of. In this litigious society NPOs who are sued are experiencing an average of $235,000 in legal fees even if the suit is unfounded.

Specifically, Directors and Officers (D&O) are exposed to such employment claims as wrongful termination, breach of employment contract, discriminatory hiring practices, failure to employ or promote, retaliation, negligent evaluation, sexual harassment, wrongful discipline, invasion of privacy, deprivation of career opportunity, employment related defamation, wrongful infliction of emotional distress, and mismanagement of employee benefit plans. Employment claims represent the area where more than 80% of the claims arise.

The Need for an Employee Handbook
Therefore, before even the first employee is hired an Employee Handbook should be developed based on the models currently being used in similar type of service organizations and modified later if necessary. The employee should be given one and required to sign a statement that they have received it. A workers compensation policy which covers injury, illness, and death that result from workers performing their job or being on the job is also essential.

Other Types of Claims
The other types of claims that arise are non-employment claims include misallocation of funds, breach of fiduciary responsibilities, self-dealing/conflict of interest, anti-trust or restraint of trade violations, defamation, invasion of privacy, negligent financial advice to third parties, failure to maintain insurance, interference with contract, breach of contract, failure to accredit or certify, and infringement of trademark, patent, or copyright.

Lawsuits can originate from such diverse sectors as beneficiaries who feel that they are entitled to more than they received; board members who disagree with a majority decision on the use of funds; donors who feel that their contributions have not been used to further the expressed aims of the organization; state attorney generals who institute legal proceedings against the board for issues such as mismanagement of funds and antitrust violations, and other government officials such as the IRS and the Dept. of Labor alleging violation of federal or state laws.

The Difference Between a D&O and a GL policy
It is important for NPOs to make the distinction between what a D&O liability policy covers and what a General Liability (GL)policy covers. A GL policy does not cover what a D&O liability policy is designed to cover. A GL policy is broad coverage and is designed to cover bodily injury, property damage, theft, criminal acts, deliberate fraudulent acts, pollution, nuclear reactor or radiation, and litigation pending prior to the original inception date of the policy.

To narrow this down, a GL policy then essentially covers bodily injury and property damage, whereas the D&O policy covers wrongful acts which includes "wrongful management decisions" and never includes bodily injury and property damage. Therefore, it is essential that an NPO have both policies.

To summarize, the D&O liability policy must not only cover the claims made against the organization, but also full prior acts, and defense costs. Moreover, not only should the D&Os be covered, but also the employees, volunteers, and committee members. The best D&O liability policy does all of this.



Are you a board member of a nonprofit organizations? Have you had any of these concerns? Call (773) 614-3201.

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