When it pertains to estate planning, it’s necessary for both you and your attorney to understand how your property is titled. Understanding how you own your property has an impact on what estate planning methods you utilize– and whether or not your estate plan is even reliable. Here are the fundamental classifications of property ownership:
Joint ownership includes property that’s held as Joint Tenants With Rights of Survivorship, and property that’s held as Occupants in Typical. It is very important to know the distinction in between these 2 kinds of joint property, since they’re treated totally 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 house, for circumstances, or a savings account– and you pass away, the entire property passes to the surviving owner beyond the probate process. This is fantastic news if it’s what you mean to have take place.
But say you own a house with Jane as joint tenants, and you desire the home to go to Sue when you die? If you don’t comprehend how your property is entitled, you might simply write a will that says you want your home to go to Take legal action against. This will not work, due to the fact that your will has no result on property that’s titled as Joint Tenants With Rights of Survivorship. The will only manages the probate process, and your house passes outside of probate. So, it is very important that both you and your lawyer know how your property is titled.
Tenants in Common
What if you and Jane own a home together as Tenants In Common? You each own an interest in the house, and when you pass away, your share of the house is dealt with like specific property. So, if you have a will, the will controls who gets your share of your house. 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, but you’ve offered your recipients a right to the property through contract. Examples include life insurance coverage policies, payable on death accounts, annuities and pension. When you’ve designated a recipient to get this kind of property, then, upon your death, the property passes to your beneficiary beyond the probate property.
Again, your will has no impact on this kind of property. So, specifically if you’re recently divorced, it is necessary to review your recipient classifications in addition to altering your will, to make certain you do not unintentionally leave your ex-spouse an inheritance.
Property that’s entitled entirely in your name, without a beneficiary classification, is your private property. When you die, this property will undergo probate and is managed by your will, if you have one.
In order to prevent probate, you might consider transferring your individual property into a Revocable Living Trust.