When it pertains to estate planning, it’s essential for both you and your attorney to know how your property is titled. Understanding how you own your property has a result on what estate planning approaches you utilize– and whether your estate plan is even efficient. Here are the standard categories of property ownership:
Joint ownership consists of property that’s held as Joint Tenants With Rights of Survivorship, and property that’s held as Occupants in Common. It is essential to know the distinction between these two types of joint property, due to the fact that they’re treated completely in a different way when it concerns estate planning and probate.
Joint Occupants with Rights of Survivorship
When you own property as Joint Tenants With Rights of Survivorship– a home, for example, or a checking account– and you die, the whole property passes to the making it through owner beyond the probate process. This is excellent news if it’s what you mean to have happen.
But state you own a house with Jane as joint occupants, and you desire the house to go to Take legal action against when you pass away? If you do not comprehend how your property is entitled, you might simply write a will that states you want your house to go to Sue. This won’t work, because your will has no effect on property that’s entitled as Joint Tenants With Rights of Survivorship. The will only controls the probate procedure, and your home passes outside of probate. So, it’s crucial that both you and your lawyer know how your property is titled.
Tenants in Common
What if you and Jane own a house together as Renters In Common? Then you each own an interest in your house, and when you die, your share of your house is treated like individual property. So, if you have a will, the will controls who gets your share of your home. If you have no will, then the state intestacy statute controls who gets your share of the house.
Title by Contract
Some types of property are owned by you, however you’ve provided your beneficiaries a right to the property through contract. Examples include life insurance coverage policies, payable on death accounts, annuities and retirement accounts. When you have actually designated a beneficiary to get this type of property, then, upon your death, the property passes to your beneficiary outside of the probate property.
Again, your will has no result on this kind of property. Especially if you’re just recently separated, it’s crucial to examine your recipient designations in addition to altering your will, to make sure you do not unintentionally leave your ex-spouse an inheritance.
Property that’s entitled entirely in your name, without a recipient designation, is your specific property. When you die, this property will go through probate and is controlled by your will, if you have one.
In order to prevent probate, you may think about moving your private property into a Revocable Living Trust.